While many of the so-called experts are crying, I’ve discovered that my decision to enter the stock market could not have come at a better time. The US Government has decided that inflation is out of control so they’ve started to raise interest rates to “cool off” the economy.
According to my research, every single time the Fed raises rates, stock prices take a hit as emotional investors panic and others move out of the stock market into safer investments like government bonds.
This is very good news for me, because it means that I’ll be able to buy stocks at bargain basement prices.
In order to maximize my long-term profit, I need to take advantage of this dip. The more I can invest now, the better off I’ll be in the future. That means I have to get really serious about my finances.
I picked up a copy of Your Money of Your Life in hopes of some pointers. The book is filled to the brim with helpful information, but one thing I gleaned from the text was the fact that I need to account for every single penny I spend in order to learn where I stand financially and keep track of the progress that I am making.
I tried to do this on the computer at first, using my knowledge of Excel, and I fell flat on my face. I spent more time trying to use the darned program than actually entering information. I switched around to several free finance applications, only to run into the same issue. I ended up being so frustrated that I was ready to toss my computer against the wall!
So I went back to what I know. I understand the basics of paper accounting. I used that method to keep track of my budget for years during the early days, until my budget became so low I didn’t need to bother. I invested in a ledger and got to work.
Every single penny I spend is documented accordingly. It’s a bit of a chore, but it has made me more conscious of how I spend money. For the first time in my life I’m actually documenting how much I spend on food, books, and other items. I intend to use that knowledge to target areas where I can save in order to maximize the amount I have to invest while the market is in this slump.
Once I have a few months’ of numbers available, I’ll even go into parts of my budget that I’ve never discussed before–like groceries. Perhaps that will help you learn a bit more about controlling your finances, as well as show you a bit more about how I spend my money on a daily basis.
If you’re interested, that is.
Have you ever kept track of every penny you spend? Please share your stories in the comments below.