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Start Budgeting and Saving

The Beginning

I started to really focus on budgeting, saving and investing in 2013. We were living in England and sometimes between 2010 and 2013, our financial advisor retired. He left us with another advisor but we never bonded due to the distance (he was in Missouri) and so I decided to take over. I was very nervous about it, to have our financial futures in my hands, but I decided to give it a go.

Luckily we lived in the age of the internet, the world wide web and Google, and via a lot of time and reading, I slowly learned. In this post, I want to share with you some of the most beneficial info, especially for beginners. With so many info flying around, it can be very overwhelming and I want to help make the process easier. In the many financial groups that I am in, what often happened were people posting about feeling overwhelmed and some even wanting to quit even before they started.

Let’s get started!


Dave Ramsey

While we never followed Dave Ramsey and I must say that some of his advice is a bit 1999, many of his basic saving and budgeting tips, especially if one is in debt, are easy to digest and implement. Some of the things I recommend from Dave are:

What I don’t like above Dave is his condescending tone and how cult-like some of his followers can be. To me, finance is personal and it’s not a one system fits all thing. Another area we disagree on is that Dave doesn’t believe in credit scores and I do. It’s not because we like debt, we don’t have any and haven’t had any in a very long time, but in 2021, it just makes life so much easier when there comes a time one needs to get a loan. Also, as you advance, with no debt and healthy savings and investment accounts, owning a credit card, especially one that gives you points and bonuses, is really nice.

One last area I disagree with is baby step 2 and 4, especially if one has a 401k/403b/TSP type of employee retirement plan with matching. We’ll get to this part later but as a math person, if I have a debt with 3% interest and a 401k with employer matching that’s gaining 10% interest, I’d want to do my best to work on both. Compound interest is powerful. It’s not awesome for debt but it’s amazing for saving/investment growth.

But, if you are starting out in the budgeting and early savings stage, and more so if you have debt, do read up on Dave’s method and join the FB group above.

Menu Planning and/or Meal Prepping

You’d be surprised how much money one can save from the simple act of menu planning and/or meal prepping. Imagine going to the store with only an idea of what you’ll cook.

Without menu planning

Let’s say, tacos, chicken noodle soup, spaghetti, and livers and onions. So you bought all the ingredients needed: taco shells, meat, a bunch of coriander, a bag of celery, carrots and onions etc.

The first day you cooked the tacos, but, you didn’t use up all the coriander/cilantro, cheese and sour cream; you stuck them back in the fridge. On the second day, the chicken noodle soup. You used a bit of celery, carrots and onions but that’s it. Back in the fridge they go. On the third day, spaghetti and you still have some cheese left from the taco night. On the last day, the livers and onions. You now need to go to the store again, bought more things and never got to going back to reusing the leftover ingredients from last shopping. Garbage day comes along and they all got dumped into the bin.

With menu planning

If you were to menu plan, there would be less waste and less waste equals more money saved. Before going to the store, spend about an hour, maybe 30 minutes to plan the meals out. Let’s say tacos, Pho, spaghetti, fish pie, livers and onions, leftover night, and Chinese takeaway.

One the first day you made the tacos and the second day, you finish up the rest of the coriander on the Pho. On the third day, the cheese goes into the spaghetti and on the fourth day, you get to use the rest of the sour cream and cheese in the fish pie. Some of the onions were used to make the Pho broth, but you still have plenty for livers and onions. After this, leftover night and then takeaway night. No waste!

It may not seem like much but when I don’t menu plan, on a weekly basis, I can be wasting $10 worth of food. It may not seem like much but they do add up. Via menu planning, that $10 can go towards a bill, a need or investment. If you’re in the investment stage, that $10 + the power of compound interest can become so much more.

Dave Bach latte factor calculator. $10 weekly using 7% interest

Web sources to get you started

TheKitchn has a very detailed post on meal planning and if you need ideas on what to cook, there are a plethora of recipes to choose from. If you want more recipes, Google and Pinterest are awesome. Just type in what you want and voila. The Budget Bytes though is great if you are tight on the budget since each meal has a cost breakdown.

If you need a template to get your meal plan and grocery list organised, you can download the one I created. Just fill out the form and you’ll be taken to the download page.

Saving & Investing

I think once you get a hang of budgeting and also, if any, managing your debt, the saving part of reaching financial independence/FI can be quite fun. Yes, I am not going to lie, if it’s new to you, it can be a bit frustrating and possibly pointless, but once you get a hang of it, it can be really fun.

There are many ways to save money and also to raise the amount you save. You can save via a basic savings account or (which I highly recommend) get into investing and save via index/mutual funds. You can save a percentage of your earning or, you can also think of ways to earn extra via side gigs.

Some people can be really intimidated by investing. But once you know the basics, at least the basics in order for you to reach FI, the process is really a piece of cake. The one thing you need to remember is that the journey towards FI is a marathon, not a sprint.

Some Basic Saving Tips

  • For your emergency fund, aim to reach $1000 initially and once you get your debt under control, aim to reach 3 – 6 months of your salary.
  • Put your emergency fund in high-interest rate savings or money market account. A note: rates go up and down. At the time of writing, high-interest savings rates are around 0.40%-0.60%. You can research this via a few websites:
  • Once you get your emergency fund in place, work on investing money your money for retirement. You can do this in many different ways.
    • If your job has a 401k/403B/TSP/or any type of retirement account, sign up! If your work has a matching program, take advantage of it. The max you can contribute is $19,500/yr.
    • If your job doesn’t have a retirement account, open an IRA account. The max you can contribute to an IRA is $6,000. Two companies that I have personally used are:
    • There are two types of retirement accounts available:
      • Roth IRA: Money is after tax and when you withdraw at retirement, you will not be taxed
      • Traditional IRA: Money is before tax. You get tax benefits now but withdrawals will be taxed
      • Which is better? Consult a tax specialist since each individual is different
    • If your work has a retirement account, and you are one of the lucky ones to earn more than you need, you can have that AND an IRA account for a combined retirement investment of $25,500/yr.

What Should I Invest In?

Great question and there a plethora of information out there on this. But for starters, you need to know your risk tolerance and when you will need to be withdrawing from your account. If you are young and have 30 years, you can be completely fine going the aggressive route. But, if you will be retiring in a few years, then maybe you want to be a bit more conservative.

I am 46-years-old and if I follow the 100 years rule then I would be investing in 55% stocks and 45% bonds. While that seems safe, I feel like I can risk another 10 years of investment roller coaster. So, even now, our asset allocation is still 90% stocks. When the market goes down I don’t worry too much since I have many years still; I would just use the time to buy more funds.

Below are some resources to help you understand asset allocation and risk tolerance.

Index Funds

After you understand your risk tolerance and know a sweet spot for your allocation – at least sweet enough for you to be able to sleep well at night – you buy your funds. But which ones? There are soooooo many!!

Just a reminder, we’re doing a marathon, not a sprint. Due to this, we’re going to invest for the long term and not short term Game Stop kind of deal.

For long terms investments, many, or maybe all, financial consultants and long terms investors will tell you to start with index funds. Great suggestion but still, there are many index funds out there. To help you with this, please take the time to read this classic three funds suggestion by Mr. Bogle.

So, if you have, for example, $10k to invest, and your risk tolerance is 90/10 (90% stocks and 10% bonds), then you want to put $9k to VTSAX + VTIAX and $1k into VBTLX. How much into US/VTSAX and international/VTIAX stocks? That is up to you and it’s something you need to either research on your own or seek the advice of a professional.

A few years ago, when I was rebalancing my portfolio, I spent a bit of time researching the international market. I felt like it wasn’t going to do as well and I sold all my international funds and bought more FSKAX (the Fidelity version of VTSAX – my account is with Fidelity and my husband is with Vanguard). Maybe I got lucky or maybe I had solid info and it was a good move since the international market hasn’t been as good as the US market. There is no rule that you need to have international in your portfolio but if you want to have a well rounded one, then go for it. At this time I want to grow with the US market.


Create a budget, make a plan to pay off debt if any, build up your emergency fund and if you haven’t started, look into your work’s retirement plan and/or IRA account via companies like Fidelity/Vanguard.

And oh, buy or see if your library carries this book: The Simple Path to Wealth. After reading this, you may never need to come back to my wee blog for any other info. It’s that good.

Take care!

Clara Signature




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