The Amateur Financier

Every so often, I wonder if I’m on the right track financially.  It’s hard to gauge your progress sometimes, when you don’t have benchmarks.  Luckily, Kiplinger’s has put out a list of ten financial commandments for those of us in our twenties.  I like having a way to measure my progress, so this is just perfect.  (I’m the sort who works well in a structured environment.)  Let’s see how I stack up!

1. Plan Ahead – I do this to a pretty good degree (my girlfriend and I have talked about where we hope to be a year, two years, and five years from now, for example).  But, especially now that I’m in between jobs, it seems that solid, firm plans are harder to create, and I’ve been forced to be more flexible in my planning.  Let’s call this one half-done.

2. Live Within Your Means -I definitely do this.  I live on a fraction of what I’m currently getting in unemployment compensation, which in turn is less than half of what I made at my previous job.  I’m a pretty frugal guy by nature, I guess.

3. Make Saving a Habit -This one’s a big check, as well.  I put aside a nice portion of money each month, and have been adding even more now that I’m saving online and can transfer funds automatically.  Thank goodness for online savings accounts.

4. Pay Off Your Credit Cards -This is a total non-issue; I’ve never carried credit card debt, and have no intention of starting now.  No worries about this for me.

5. Start Investing -I’m on a roll; this is another one in the win column.  I maxed out my Roth IRA last year, I’m on track to do the same thing this year, and I’ve even been investing a substantial amount in my non-retirement account.  Once the market picks up again, I’ll be sitting pretty, investment-wise.  (I just hope I have a little more time to get in while stocks are so beaten down; buy low, sell high, and all that.)

6. Establish Credit – Another financial task under my belt.  I’ve been using credit cards (responsibly) since high school, and have a credit score over 780 to show for it.  Even in this poor credit environment, I should be able to get a decent rate on a mortgage or other loans if I need them.

7. Develop a Marketable Skill – I thought that I had one, with a degree in biochemistry, and now I have some quality control experience as well.  But it has not been much help lately, and I’ve been considering things like going back for a graduate degree.  We’ll call this one half-done, as well.

8. Cut the Financial Umbilical Cord – This one’s a toughie.  On one hand, I’m still living in my mother’s basement (rocking it, nerd-style!), and I did get her help on my taxes.  On the other hand, I do pay rent, albeit less than I might pay to live on my own, and I take care of most aspects of my finances (investing, saving, budgeting) on my own.  Let’s call this one another half-credit.

9. Marry Wisely -Well, I’m still unmarried.  And although my girlfriend and I have talked about marriage, certain factors of our situation mean it would be hard to do so in the next year or two.  I like to think that marrying her will be a wise decision, but only time will tell.

10. Have Some Fun – I do, I have plenty of fun.  And I’m usually a pretty cheap date; something like staying at home and watching a little TV usually keeps me happy.  This one is a big check.

So, there you have it.  By my count, I’m doing six of these already, have three partially done, and only have one that I still need to complete (and that’s marrying a financially responsible person, so I’m not too worried about that).  Not bad for someone who still has three and half years before he turns thirty to finish getting his financial house in order.

(Thanks to JLP at All Financial Matters, whose blog entry on the 10 Fiancial Commandments for your 30s pointed me toward the article that inspired this posting.)

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• Ten Commandments of Credit Cards
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