Fiscal Starter Pack

 

 

I need to issue a disclaimer right up front. This does not include anything about debt. This grew out of a conversation that I had with one of my friends who had recently paid of $60K of student loans in less than 2 years. They did it without diligently sticking to a budget too!

They’re ballers, I know.

This was written to them as far as what I thought they might want to do next. So read on.


Budgeting

Mint.com

Pros

  • Tracks all of your accounts for Free
  • Lets you go back see how much you’re spending on each category
  • Let’s you export all transactions stored on their servers. (Multiple years worth) You can then drop it into excel and build a good historical summary of what you’ve done.
  • Really nice website and app available.

Cons

  • Can be a pain to get set up
  • Not that great at keeping you on budget. You don’t have to enter the transactions as you go so you don’t really see where the money is going until the end of the month
  • It only syncs when you log in to either the app or website.
  • While it does keep all of your transactions stored, it doesn’t have a great way to go back and look at your historic spending.
  • If you’re a security worrier, having all of your accounts in the same place could be troubling. They use the same encryption as banks, but banks get hacked too.

 

Excel

Pros

  • Can be tailored to exactly how you want it.
  • Can display historic info excellently.

Cons

  • tedious, and really hard to keep up with when there are two people doing it.
  • No good way to track it while you’re out and about.

Everydollar

Pros

  • Great free tool for tacking every expense as you go. Brionna likes it.
  • Does a good job of showing you where you’re at in spending during the month.
  • Nice app and website

Cons

  • Not good at displaying data from last month.
  • No way to export data.
  • The paid version will import transactions for you and let you categorize them, but I doubt their imports are as robust as Mints. (Also I hate monthly subscriptions)
  • It’s less than a year old I think so there may be a lot more features coming still.

Honorable Mention

YNAB

I have never used it because you have to pay like $5 a month for it, but from what I’ve read it’s a hybrid between Mint and Everydollar. It pulls in every transaction for you and then you categorize them. This takes the hassle out of typing them in but still lets you see where your money is going as you spend it.

We use a combination of Mint, Everydollar, and Excel. Brionna, enters her transactions in everydollar, and I categorize them in Mint, then at the end of the month I pull the totals into Excel and we talk about what’s coming next month.

Personal Capital

I have an account on here. I would sum it up saying it’s an investment focused Mint. It’s really good at dissecting your investments, but not so much on your day to day expenses. It also has a lot of helpful retirement graphs and stuff like that.

Savings

We’re currently using MangoMoney.com for our savings.

Pros

  • 6% Interest up to $5000. After that it’s 0.1%

Cons

  • You have to have $500/month transferred into the account every month.
  • Then you have to log in to a dated website and move the money from your checking to savings
  • If you’re not careful they may charge you a $3 fee on the account. (Only happened once and they refunded it, but it shook my confidence in them. I’m a little leery to recommend them)
  • Capped at $15,000, which is why I may move our emergency fund to that WIF savings account.

 

Wesleyan Investment Foundation

Pros

  • Up to 2.26% APY (Annual Percentage Yield) (a term that applies to deposit accounts. APY is a percentage rate reflecting the total amount of interest paid on an account, based on the interest rate and the frequency of compounding for a 365-day period.)
  • No hoops to jump through.

Cons

  • I don’t know how easily you could set up Automatic deposits.(I would assume it would be easier than Mango though.

Qapital

Pros

  • Slick app. It’s compatible with ITTT (If This Then That) so if you wanted to save $10 everytime you rode your bike it could do that for you. Or every time you
  • It keeps your savings account separated.

Cons

  • It’s yet another thing to fidget with. If you really have trouble saving then I could recommend it. But outside of that it’s mostly gimmick.

 

Whatever you wind up doing here, just make sure it’s an automatic deposit happening every month without you having to think about it.

Retirement

You both have 403(b) I think, which to my knowledge we can just treat as a 401(k)

403(b) plan is a U.S. tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only Internal Revenue Code 501(c)(3) organizations), cooperative hospital service organizations, and self-employed ministers in the United States. It has tax treatment similar to a 401(k) plan, especially after the Economic Growth and Tax Relief Reconciliation Act of 2001.

Employee salary deferrals into a 403(b) plan are made before income tax is paid and allowed to grow tax-deferred until the money is taxed as income when withdrawn from the plan.

403(b) plans are also referred to as a tax-sheltered annuity although since 1974 they no longer are restricted to an annuity form and participants can also invest in mutual funds.[1]

The max you can contribute is $18K per year right now (2016), ($1500/Month) it goes up sometimes, but that’s mostly at the whims of politicians. This money is taxed when you withdraw it, so ideally you guys will be retired then and in a low tax bracket so you won’t have to pay much in taxes.

Your 403b’s will probably have a few funds that you can choose from. You want to choose Vanguard ETF’s if available. If they’re not available choose something that follows the S&P 500, or a total stock market fund with low expense ratios. You’ll have to click on the funds, they usually don’t display the expense ratios in the list.

Dave Ramsey says to do the 401K (Or in your case 403b) enough to get the maximum match (because that’s like a 100% return) and then open a Roth IRA and throw your $5500 in there.(I think I told you wrong last night though. Contributions to a Roth are not tax deductible, just a regular IRA.)

If you want to invest past the Roth or 401k you can always up the 401k%.

Those are retirement accounts which means you can’t touch them until your 59 1/2.

If you want to have a more medium term investment account you could open a taxable account. Which is basically an investment account you pay taxes on when you put it in and then pay taxes on the gains you make, but you can pull it out whenever you want.

Investing

For the Roth or taxable account I’d recommend setting one up directly with Vanguard, or through Wealthfront, or Betterment.

Vanguard is a more traditional investment house. Meaning they build the funds, and sell them to others, could be to other guys like Betterment, or individuals.

Pros

  • Cheapest way to invest in good ETF’s.
  • Long track record
  • Reliable

Cons

  • You will pay more in taxes over the life of the investment
  • Not as pretty as Betterment or Wealthfront.

Betterment and Wealthfront are a newer type of investment option.  They’re called robo-advisors. They basically took the person out of the equation and focus on keeping the fee’s as low as possible.

Pros

  • Tax loss harvesting
    • Tax loss harvesting is the practice of selling a security that has experienced a loss. By realizing, or “harvesting” a loss, investors are able to offset taxes on both gains and income. The sold security is replaced by a similar one, maintaining the optimal asset allocation and expected returns.
  • *Smart Deposit (Only Betterment)
    • Betterment has something that will automatically invest extra cash for you. I haven’t used it but it seems pretty cool from what I’ve read. I could see it causing problems for a budget though.
  • Potentially higher returns
    • This isn’t guaranteed though. Typically you don’t beat the market average consistently. Managed funds almost never do. (Another perk of ETF’s)

Cons

  • Relatively new. They might not be as awesome as they sound in 10 years.
  • They charge an extra (albeit minimal) fee on top of Vanguards fees. Wealthfront is free up to $10K, and then 0.25% after that. Betterment is 0.35% up to $10K, then 0.25% up to $100K, after that it’s 0.15%.

I’m thinking about opening a betterment taxable account now. I just haven’t gotten around to doing it. I’ll probably do it this month though.

That’s a lot of info, but hopefully it’s helpful. (I was typing a lot of it out for me too for future use haha)

 

 

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