imaznation

When you’re in college, you talk to people that make fourty to fifty thousand dollars a year and you think their life is great. You take one look at their salary and you say to yourself “Life would be so good for me if I could make as much as they do!”

You graduate. Everything changes. All of a sudden, you begin to realize the actual cost of living on your own: paying for rent and utilities, paying for gas, paying for all the food that you eat, and paying for all the shopping that you do. Fourty thousand dollars just doesn’t seem to go as far anymore.  Except… you’re making almost double that amount and it still seems like you never have enough money in that bank account.

I felt a lot like that when I first started working. I didn’t know if it was supposed to be like that, or if I just didn’t know how to manage my money right. Now I know. I didn’t know how to manage my money right. Here’s three important rules that I learned the hard way.

1. Live below your means.
2. Save regularly.
3. Never spend more than 25% of your income on fixed costs.

What does this mean? Fist of all, it means that you shouldn’t spend like you’re rich. Spend a hundred dollars like it took you a week to earn. Don’t make impulse buys. Don’t treat yourself to expensive restaurants every day. Make luxuries a treat instead of demanding luxury every day.

Second, it means that you should set aside a fixed amount of money every paycheck. That’s right, every paycheck–not every month. If you’re like me and you get paid twice a month, this usually means that one of the paychecks usually goes towards covering rent and utilities while the other one is for spending. The point of saving a fixed amount every paycheck is that you will eventually learn to budget the amount that you don’t set aside, because it’s got to last for longer than one pay cycle. It’s a way of teaching yourself financial discipline.

And finally, don’t make the stupid mistake that I did. Fresh out of college and with a nice job, I thought that I could live comfortably in a nice downtown condo. I can. I could live comfortably, but doing so prevents me from spending or saving comfortably. Live in the cheapest place you can stand. The money you save adds up almost instantly. It’s like having an extra paycheck every month.  Take that money you saved and invest it or spend it. You’ll feel happier, you’ll have more money, and when it comes time to move out, you’ll have much less to worry about when it comes to getting your deposit money back.

And that’s my spiel. This is mostly for my own personal reference, but feel free to learn from it anyways.

Everybody always talks about work-life balance at Microsoft. When you’re recruiting and interviewing and when you’re going through orientation, it’s a term that everyone talks about. Your personal time is yours, and it’s up to you to strike the right balance between your personal life and your work life.

And to that extent, it’s great. Work time is for work, and all the other time is for me. This means weekends and nights are time for play. But what about working on your own personal projects? I guess this is just my own time management skills, or the lack thereof. I can find time to work; I can find time to play; I can’t find time to work on my own personal projects.

Like redesigning this blog. I still haven’t had a chance to sit down and get it done. Maybe I should schedule a meeting with myself in Outlook and block out time for it…