Wednesday, December 06, 2006

Spreading the Personal Finance Gospel

(Sorry for the post-free Tuesday; our internet connection at work was down, and I was out all evening.)

Now that I know a teeny-tiny bit about personal finance, I've been feeling compelled to talk about it. I don't mean talking about money with my friends--that's a different subject, really, and one I'd like to address. But I did have a little come-to-Jesus chat with my boyfriend last night.

My boyfriend is a freelance video editor. He works mostly in TV, and after a long stretch of doing day-here-day-there gigs, he's taking a 46-week job with one show. He'll be on payroll and everything, which is great--they'll deduct taxes, and save him the hassle of paying taxes as a self-employed person (he still has to do that this year, and it's going to be a nightmare). It also means that, for the first time in a long time, he'll have a constant and consistent cash flow. What does that mean? It means that he can make a budget!

I can't even remember how we got on the subject, but on the subway last night, I basically pulled the Gospel of Personal Finance out of my back pocket and got up on my soapbox. By the time we got off, he'd agreed to open a Roth. By the time we went to sleep, I'd helped him draft a quick monthly budget based on a conservative estimate of what his paycheck would look like after taxes.

I think he's going to join Mvelopes. He's exactly the kind of person it's designed for--hates keeping receipts, loves being able to tinker with graphs, wants to be able to enter data directly from his Treo, wants everything electronically synched up with everything else, &c. He's also going to close his low-yield savings with his brick-and-mortar bank and open an ING account (I sent him a referral). Like me, he likes the subaccount feature, and plans to open subaccounts to save for an emergency fund, new gadgetry, periodic clothing purchases, and even a gift fund.

He had what he called "an a-ha! moment" when I was explaining how I do my budgeting: I may not spend $50 on clothes every two weeks (okay, bad example), but that means that every month, $100 is available to be spent on clothes; I have the money ready, earmarked for that purpose. I think the idea of budgeting as planning ahead, as guessing about your lifestyle and prioritizing when things conflict, was new to him.

See, the thing about him is that he's often anxious about money but has had a hard time, because of both his personality and his inconsistent financial situation, getting on top of his financial situation. My hope is that if he starts learning how to manage his money during this time of consistency, he'll be interested enough and proficient enough in his finances to continue good planning and managing over periods of inconsistent pay. My hunch is that if I help him set up a system that works for him, I can help his tendency towards inertia be constructive rather than destructive, because once he gets a system set up, and it works, and it alleviates his financial anxiety, I think he'll stick with it as long as humanly possible.

I told him to stop me when I get too pushy, but he seemed to appreciate the help. I know that I'll be less anxious if he's less anxious, so I consider it time well spent.


Wanda said...

I get on the soapbox too sometimes... especially about the Roth IRA (which I love, with my whole heart!). I think it's great that you're sharing your experience with your boyfriend and hopefully inspiring him to jump on the pf bandwagon! :)

Tired of being broke said...

It is good that he is receptive to your help. Getting him prepared financially also helps you in the long run.