One of the most important things to successfully manage your money is to understand where it’s all going. A budget is a traditional tool but a money map is all the rage right now. Here’s The Lady’s first stab at a money map.
Lessons Learned By Mapping My Money
Before I even begin, I’ll have to say that creating a money map was a VERY eye-opening exercise. A handful of things really jumped out at me as I created it.
- Since I am a single-income with 98% of my finances automated through bill pay and automatic deposits, I really didn’t think mapping my money would be a very valuable exercise for me. I was wrong. I learned quite a bit.
- In crunching the percentages for the map, I realized my budget categories never add up to 100% (of my income.) There are two reasons for this; one, as a freelance writer, my income is variable. My budget contains a relatively big buffer (that I call “wiggle“). This wiggle room helps protect my automated system when my income dips lower than average. Second, I don’t budget everything down to the dime. I know myself well enough to know that that detailed level of tracking would never work for me. So beyond a purposeful “wiggle” there is also some significant slop. (I’m fine with it since it’s working for me.)
- I was a bit reluctant to share my calculations. You see, I’m part a community of personal finance bloggers with far more financial knowledge (and net worth) than me. My emotional default is to assume I’ll be judged. This is a residual effect of struggling financially for decades and feeling shame long-term for it. But one of primary reasons I started this blog was to hold myself accountable. Full transparency has helped me progress in short order so no holding back now.
- Despite my inner critic scolding me on a few things, I’m enormously proud of my financial accomplishments. I designed my money map to reflect my current attitude toward money. My attitude and my financial status have done a 180-degree about-face in the last 18 months. Back when I started this journey, I had no job, no car, no home, and certainly no money. Now I have this…my money map.
The Lady in the Black’s Money Map
My Money Map Explained
What can I say? The Lady wanted something non-traditional, something that reflected my attitude about my personal finances. (And since someone already took a rainbow unicorn, I went with a different colorful metaphor.)
Isn’t it so purdy?
I think the graphic is fairly self-explanatory but there are a few points that should be elaborated on.
The Watering Can
I’m self employed with a variable income. The percentages included are based on an average monthly income from my primary freelance gig.
The Ground/The Stem
The backbone of my automated system stems from my credit union. It’s a tiny community credit union and I take full advantage of their online bill payment system. My “salary” is direct deposited into my checking account. What payments that are not “pushed” out (bill payment) are “pulled” out to pay fixed monthly bills.
The green leaves represent ordinary living expenses; rent, utilities, etc.
You’ll see that my rent is high at 25% but I live in southern California. It’s the cost of entry.
I do pay my ex-husband child support even though I have 50/50 custody of our child. (I’ll save that discussion for another day but just know ladies that the courts are pretty gender neutral these days. If you make more than your man and you divorce, you may end up paying alimony or child support.)
The only leaf not on automatic payments is my one secured credit card. I use it regularly to supplement my debit card usage in an effort to rebuild my credit score. I run the card up to its $200 limit and then pay it off, often more than once in a month.
The bottom leaves are browning and withered. They are my debt. Right now, I’m paying toward tax debt and a car loan. The car loan is being paid manually right now but need to graft it onto the stem ASAP. The goal is for these dying leaves to dry up and blow away–and soon.
The blooms represent all the things I’m doing to make my future beautiful.
They are savings, investments, and insurances. (They correspond to the “green light” items on my Traffic Light model.)
The insurances are paid directly to the various vendors. Being self-employed, I pay my own medical and dental for myself and my daughter. I have an HSA and two life insurance policies. I also have car and renter’s insurance. This is the most prepared I’ve ever been for a worst-case scenario. Big flower, big pat on the back.
The online banking #1 is big flower. It’s where my automated deposits for my kid’s college fund and estimated tax savings go. Until recently, I was depositing into multiple savings accounts designated for vacation, dream house, dream boat, etc but needed to streamline my funds in an effort to prioritize my tax debt.
There is one account for investment funding and is attached to my brokerage account. I purposely did NOT attach it to my credit union because, well, I went a little “investment crazy” for a while. There was a risk that I’d throw too much money in and wrecked my plans.
My investment app is different. I do auto-invest $35/week into my STASH portfolio. That little flower makes me smile. Such cute yet hearty little ETFs.
Another popular online bank (#2) holds my emergency fund. Currently, I’m only auto-depositing a token amount each month. I plan to water the hell out of that bloom as soon as I feel confident my estimated taxes for 2017 are in decent shape.
My little lonely Tip Yourself bud is one of the very few things that isn’t automated in my financial garden. I use Tip Yourself to pay myself for each blog post. It’s a reward system that is nice but since it’s manual, it’s just a tiny bud of a flower. Eventually (when my 6-month experiment with the app is concluded), I’ll likely dump that savings into my emergency fund…or maybe buy myself a sweet little stock.
When it comes to staring at the clouds and daydreaming about my retirement, I’m currently looking at one little, tiny wisp of a cloud. It’s a 401K from a previous employer. I’m not contributing into that account, or into any retirement account at the moment.
My garden definitely needs more clouds. I plan to address this deficiency ASAP.
As my little bloomin’ money garden proves, money maps don’t need to be complex or unruly. Either do your finances.
It’s simple really. If you want something to grow, you need to tend and nurture it. Sure, sometimes you need to pull some weeds. Other times you try to plant something and it doesn’t take.
If you invest the proper care, you’ll be staring at a most wondrous creation.
My little blooms aren’t very lush right now but they are some of most beautiful things I’ve ever seen–and I’ll do whatever I can to make my garden grow.
Join The Fun
Join us and create your own Money Map!
- Write a post in which you create your own map, explain how you did it, and talk about anything you discovered about your finances using the map
- At the bottom of your post link back to the other bloggers before you in The Chain
- When you tweet out your post tag all the other bloggers who came before you. This list is getting huge, so you will have to tweet a handful of replies to credit everyone
- Try your best to keep your list of chain members up to date. This helps encourage others to keep their back-links up to date and it also helps you.
THE OFFICIAL MONEY MAP CHAIN GANG:
- Anchors: Apathy Ends, Budget on a Stick
- Link 1:The Luxe Strategist
- Link 2:Adventure Rich
- Link 3:MinaFi
- Link 4:Othalafehu
- Link 5:The Frugal Gene
- Link 6:The Working Optional Money Map
- Link 7:Our Financial Path
- Link 8:Atypical Life
- Link 9:Eccentric Rich Uncle
- Link 10:Cantankerous Life
- Link 11:The Retirement Manifesto
- Link 12:Debts to Riches
- Link 13:Need2Save
- Link 14:Money Metagame
- Link 15:CYinnovations
- Link 16:I Dream of FIRE
- Link 17:Stupid Debt
- Link 18:Spills Spot
- Link 19:Making Your Money Matter
- Link 20: Her Money Moves
- Link 21: The Lady in the Black
- Link 23: Smile & Conquer
- Link 24: Her Money Moves
- Link 25: Full Time Finance
- Link 26: Abandoned Cubicle
- Link 27: Freedom is Groovy
- Link 28: Millennial Money Diaries
- Link 29: A Journey to FI
- Link 30: Trail to FI
- Link 31: All About Balance