Category: Saving

The Carrie Finances: Using a Mini-Budget to Get Back on Track

This week’s blog post is dedicated to my coworker and friend, Derek Hageman. Derek passed away over the weekend after battling cancer. He was a big supporter of this blog and having him in my corner was the greatest honor. Derek was the most positive, humble and reliable person I have ever worked with. May his memory be a blessing.

The malaise and overspending of the holidays have passed, the days are getting longer (albeit wetter) and it’s time to update my budget again!

Whenever I come back to my budget, it forces me to confront every aspect of my financial standing: How much am I spending? How much am I saving? What’s the discrepancy between those numbers and the budget I have in place?


February was an expensive month. I have a lot of Pisces friends, so birthday gifts (and attending fabulous parties) were my top expense. In addition, grocery shopping has become unbearable! Not only are prices creeping up every time I go, but my favorite things can’t seem to stay in stock. Whole Foods, if you’re reading this, my fatigued body relies on your lemonade Vitamin Water dupe to survive at this point 😂.

As a result, I wasn’t able to save the right amount last month, and it made me consider lowering the percentage of my income I’m putting into savings. However, I recently found this article by Allison Baggerly on her site Inspired Budget. One of my favorite takeaways is #8, the “mini-budget.” Whenever unexpected expenses come up, or you feel like you don’t have enough money to make it to your next paycheck, Baggerly suggests writing a mini-budget to keep you on track. Going more in depth about the mini-budget, she says, “Budgeting is less about the math and more about your flexibility and willingness to stick with it even when you overspend.” Couldn’t have said it better myself!

Since we’re nearing the end of March, I already set up my full monthly budget for April 2023:


My total fixed expenses are still under 50%, and with a bit more monthly income my savings amount increased to $580. When I considered lowering the savings percentage from 20% to 15% of my income, the amount I would be saving (about $440) felt significantly less substantial. The thought of having an easier amount to save made me feel worse, like I had failed to even consider my goal. Worse still, it reminded me of something Carrie Bradshaw would do—making excuses for herself instead of taking control of her life. (Of course, Carrie wasn’t living through a period of skyrocketing inflation, so we have some leeway here.)

With Baggerly’s advice, I know it’s better to try to reach my goal every month rather than give it up or change it. Still, I thought it would be a good exercise to create a mini-budget for myself to account for the time until my next paycheck.


Baggerly says to start with my checking account balance and determine how many days until the next paycheck hits. Next, I subtracted the expenses I knew would be taken from my checking account before April 7: my monthly payment at the dentist, my rent and my internet bill.

Little did I know, I had already been running these short-term mini-budgets in my head around this time of the month. Once my last paycheck of the month hits, I break out my phone calculator app, subtract all the many things we pay for to live on this earth from my checking account balance and ask myself: Can I put the right amount in savings this month?

As of right now, I’m $95 short on my leftover amount, but the good news is that I will be able to put at least $580 in savings once I get paid again on April 7. Since I’m behind, I might transfer even more to my savings account this time in an effort to catch up. By sticking with my budget, I’m able to hold myself accountable and not give up on my savings goals—even when I’m not able to meet them!

Pros and Cons of Owning Property

The more I learn about money and the world, the more I realize that everything has a cost. You end up paying it in either time or money. When I first started working downtown at AAII, I weighed the cost of walking from the train to the office instead of taking the bus. Walking took longer but it was free. Taking the bus gave me more time to read and communicate with friends but it required spending more money than walking. Usually, my decision depended on the weather (if I was going to end up too sweaty to be in public by the time I got to the office) or if my book was really good and I needed another half hour with it.

I think of costs in the same way when it comes to owning property. When you own a piece of property, it becomes a long-term investment that takes up a lot of your time, but it keeps your monthly payments steady. When you rent where you live, it can be a short-term investment where all extraneous maintenance costs are handled by the building, but your monthly payments are usually only agreed upon for a year or two before they increase.

At this point in my life, I’ve only rented apartments in Chicago. I have a high-yield savings account designated for eventually buying property, but I have no solid plans for when or where this will occur. Every time I hear about an issue with a ventilation system, a water heater or a leaky roof, it makes me recoil from the very thought of home ownership! So, I decided to actually research the pros and cons of owning property to see where I stand.

A lot of the articles I found mention that the top positive thing about buying a house is “building equity.” This has to do with increasing the market value of the property minus what is owed, so by adding more equity to your property you are increasing its value and therefore its selling price. Something about this doesn’t seem real and gives off major money laundering vibes!

The other pros of owning a house include tax deductions, a good credit mix, privacy and control over your space, stable monthly payments and fulfilling the white-picket-fence American dream.

On the negative side, the upfront costs of buying property are the biggest pain point. In addition to the down payment, which is usually 20% of the purchase price, there are closing costs that can be 3% to 6% of the price. Another cost I see often on listings is the homeowners association (HOA) fee, which can range drastically from $100 to $1,000 per month depending on where you live. The HOA fee can be higher if it’s paying for some nice amenities, like a pool in a condominium. Not every house will have an HOA, so you can find areas without them if the cost is too much.

Additional cons of buying property are the costs of maintenance and repair, as well as property taxes. (These costs aren’t usually factored into how much a house has appreciated in value but they will impact the profit a homeowner makes when they sell.) There’s also the time it takes to actually build that home equity, the interest charged on the mortgage and the wild fluctuations in the housing market to consider. Once you buy a house, you’re stuck there with much less flexibility to move compared to a renter, so it’s best to make sure you really want to invest in the area you choose to live.

In an article by The Zebra, an insurance comparison site, a 2022 survey discovered that 47% of Americans do not feel the fear of missing out (FOMO) when it comes to buying a house. Only 17% have homebuyer FOMO.

While writing this, I’ve been daydreaming about a little artist’s adobe house somewhere in New Mexico where I can live out my Georgia O’Keeffe desert fantasy. But the reality is that it could cost me even more to own and maintain a house than it does to continue renting with my maintenance handled for no extra cost in the current housing market. There’s much more detailed math involved in this decision, but for now I’ll continue renting until I’m ready to commit more time (and possibly less money) to the place I live.

If you own a house or condo, leave me a comment about how the buying process went! If you’re a long-term renter, do you feel like you made the right decision or do you have homebuyer FOMO?

PRISM Step 2: Recognizing Your Risk Tolerance and Allocation

Before we dive into the deep end of what the big words in the title represent, if you missed my blog post about the first step of the AAII PRISM Wealth-Building Process, you can read it here.

PRISM is a five-step method for aligning my investment decisions with my goals, created by AAII Journal editor Charles Rotblut. The second step of PRISM contains nine lessons and three worksheets for discovering my risk tolerance for each of my investing goals and how I need to diversify my investments to correlate with the level of risk I can handle.

Charles discusses many types of risk, but the most important seem to be financial and psychological. How much money and sanity can you handle losing on your investments? But risk isn’t just about losing money, it can also lower the purchasing power of the money you already have. This was an argument I heavily relied on when I opened two high-yield savings accounts instead of letting thousands of dollars sit pretty in my joke of a regular savings account. The interest rate on regular savings accounts is far too low to keep up with inflation, so over time that money has less value.

Though risk sounds like a bad thing, Charles says that some risk can be an opportunity if you know how to use it right. For instance, when the market is down (like it was for most of last year) that lowers the price of investments, which in turn gives individual investors more options to buy stocks and funds at a discount.

The Assessing Your Risk Tolerance worksheet can be used for each of my investing goals that I outlined in my walkthrough of PRISM Step 1. For instance, my risk tolerance for retirement is high due to the long-term timing of the goal.

Allocation is the other big word in this step; it refers to how your portfolio is divided among different classes of investments. These include stocks, bonds and cash. AAII has three asset allocation models for different goal time horizons that correspond with how to diversify your investments for each goal.

With my retirement’s long investment horizon, it lands me in the aggressive investor column. This correlates with an allocation of 10% to fixed income, or bonds, and 90% to diversified stocks. My retirement portfolio is 100% invested in stocks, but I think it’s still too early in my investing journey to add bonds to the mix. I will need to do a lot more research before I feel comfortable investing in something I currently don’t understand.

I can apply these lessons to each of my investing goals to ensure that the allocation I have in place supports the investment’s time horizon and level of risk.

Follow along with me as I venture through the PRISM Wealth-Building Process and solidify my financial plan for the future!

PRISM Step 1: Prioritizing Your Goals

Now that I have something of an investment strategy in place, it’s time to take a closer look at how my money will be allocated to my financial goals. The AAII PRISM Wealth-Building Process, created by AAII Journal editor Charles Rotblut, is a five-step method for aligning my investment decisions with my goals.

The first step of PRISM supplies seven lessons and three worksheets to help determine what my goals are, why to start with them, the key components of my goals—including the timing and wealth required to fulfill them—and the importance of prioritizing goals as a jumping off point for building wealth.

I learned that in order for a goal to have any standing, it has to be personal to me. Though it doesn’t need to be the highest priority in my life, it has to be something that I care about and am willing to achieve. Otherwise, I could spend the rest of my days in bed watching the sun go up and down (just kidding, there’s no sun now that it’s December!).

Once I define these goals, they will begin to drive the decisions I make with my money. Charles suggests starting with life stages. What do I want to do with my money at different stages of life? I have a mix of short-term and longer-term goals, but I’m not really sure about the intermediate term.

I’ll admit, some of the worksheets went a bit over my head, but the main Prioritizing Your Goals worksheet was the most helpful. Here I was able to enter my goals, the number of years away each goal is, the amount of time I will need to spend on the goals, their priority, estimated cost and any comments I have about these goals.

My goal that is most imminent is making another $2,000 lump-sum investment into my Schwab brokerage account. Since my plan is for this to occur on the first trading day of January 2023, this goal is my highest priority and will depend on me sticking to my savings schedule.

Next on my list is a little heritage tour of Europe I’ve wanted to go on for years. Germany, Hungary and a little village in what is now Poland where my great-grandfather grew up before he left for the U.S. are high on the list. It will probably also include eating my way through Italy—my true motherland even though I’m 0% Italian! I haven’t entirely planned out the trip, so my cost is super estimated here.

Buying a house or piece of property somewhere, somehow is my third goal. To be honest, I’m not even sure if I want to own property (blog post on that coming soon), but I know that I don’t necessarily want to pay an increasing amount of rent for the rest of my life either. After some very vague number crunching, I came up with an estimated cost of $35,000 for this goal—but it will depend a lot on inflation and the housing market’s status whenever this goal is realized.

My longest-term goal is also my lowest priority: retirement. The upside-down smiley emoji attached to it means that this is probably an unachievable goal, but it’s on there anyway! I did some calculations involving inflation to figure out how much I would possibly need in the year 2062 when I might retire (that’s not a real year!). Charles discusses how some of these goals will be more realistic and others more aspirational. Retirement is a fever dream at this point for millennials and younger generations, but AAII’s lessons always keep it in the back of my mind. One thing that lessened the pain of just how aspirational retirement is for me was when Charles noted that even long-term goals don’t need to be fully funded by the time they are met. Retirement is an example of a goal where I could still be in the accumulation stage of building savings but be able to retire with what I have at the time.

Follow along with me as I venture through the PRISM Wealth-Building Process and solidify my financial plan for the future!

The Carrie Finances: Dragging My Savings Habits

Last time I reviewed my budget, my rent had just gone up and summer was in full swing. I had started contributing to my retirement account and was already looking forward to fall—and the fall in price of my energy bill!

Though I’ve been using the percentage budget for most of this year, I certainly haven’t been following it as closely as I would like. I haven’t been saving enough, so right before sitting down to write this I forced myself to transfer 20% of my monthly income, $560, from my checking account to my regular savings account.

I promise I haven’t been spending exorbitant amounts of money on fancy shoes in the traditional Carrie Bradshaw fashion. My main struggle with saving has been waiting until the end of the month to make the transfer, and after my rent went up it got even harder to pull the trigger. Unlike Carrie, I’m calling myself out on my bullshit because no one else will! (Feel free to bully me into saving better, every bit of encouragement helps!)

I’m hoping that transferring my savings at the beginning of the month (right after the first paycheck hits) will hold me more accountable to stick to the budget outlined below:

Another way I’m tricking my brain into wanting to save more is by setting more aggressive goals for my high-yield savings accounts. I’m more motivated to save and meet those goals now that I put them in writing. In order to meet my goal of investing another $2,000 in the new year, I have to stick to saving no less than $560 every month and make more regular transfers to my high-yield savings accounts when my emergency savings are in excess of $10,000.

Most of my recent behavioral block from saving can also be attributed to my general misunderstanding of numbers (the letters of math!) and a fear of not having enough money. But I know that with the budget I’ve created, it’s possible for my money to do all of the things I want it to. I just have to face that reality and allow the numbers to mean little else than their value. As AAII has taught me, having these rules in place means that there’s no room for my emotions in these decisions.

My goal is to get to the point with my budget where I don’t have to think about it. Since I only started budgeting at the beginning of this year, I’ve given myself some wiggle room to start. But now we’re getting serious 😎 so stay tuned to see if I can stay true to my word!

Setting High-Yield Savings Goals

Last time I updated you on my high-yield savings accounts, interest rates were going up and so were my savings. Since then, my LendingClub account has increased the interest rate on my savings three more times!

Back in June, LendingClub raised my rate to a 1.05% annual percentage yield (APY). By the end of June, it was 1.26%, and at the start of August it went up to 2.07%. A few days ago on September 21, it went up to 2.25%. According to LendingClub, this is 13 times the national average savings account yield. When the interest rate was 2.07% at the beginning of August, I decided to transfer more money into the account. Through the end of August (September’s interest doesn’t hit until the end of the month), I had made almost $30 on my savings since I opened the account in March 2022!

My LendingClub account is designated for a future down payment on a house, so it’s a longer-term goal that I have more funds allocated to. My other high-yield savings account with SmartyPig is for saving money before it is invested.

Though I haven’t been contacted about the interest rate going up on my SmartyPig account, it has increased from 0.75% in June to 2.05% in September. Not too shabby! When I signed up for SmartyPig, one of its offerings was the ability to set savings goals. What I didn’t realize is that the interest rate is higher when I designate funds for a specific goal—2.25% (same as my LendingClub account)!

So, I set up my first official savings goal with SmartyPig, which is to have $2,000 ready to invest by the start of 2023. When I began investing in March 2022, that was my Schwab account’s starting balance. At that point, it was all I was willing to part with; I knew I should only be investing money I was comfortable losing. Since then, my threshold for losing money has increased (since the market has been down for most of this year). However, I also know that I’m in my investments for the long term, so the short-term ups and downs aren’t crucial to my end goal. Maybe 2023 will be a better year if people stop saying the world “recession”—don’t let the market hear you!

I’ll keep you updated on how this savings goal goes and when I solidify a better plan for transferring my savings to all of their different homes on a more regular basis. Half the battle is just figuring out what works for me and my money, the rest should be relatively easy (fingers crossed!).

The Carrie Finances: A Budget to Battle Inflation

I’ll be honest, me and my budget have not been friends recently. We’ve been struggling to communicate, and when we do it always ends in confusion and despair! Some months I save the right amount according to my budget, and other months I fear I will never save a penny again.

Inflation is affecting everything I touch recently, including my apartment. My rent is going up in September, and over the summer I spend about double on electricity with the luxury of air conditioning, so it’s time to revisit my budget.

Last time we talked budgeting, I was using the percentage budget outlined in Erin Lowry’s “Broke Millennial.” I’m going to stick with it for now so that I can make sense of how much I really have to spend after these changes take effect. The percentage budget allocates 50% of monthly income to fixed expenses, 20% to savings or financial goals and 30% to wants and flexible spending. My rent went up from $1,085 to $1,200 (yes, I tried to negotiate with my landlord, but he said they were already eating part of the cost with that increase—oof!), and with double the electricity my utilities are $110.


I’m relieved that my total fixed expenses are still under 50%, though just barely! I decided to break down my leftover money (after savings are accounted for) on a weekly basis to see how much I can really spend per week. This encompasses groceries, going out to dinner with friends, etc. Though I probably won’t track everything down to the cent, I will keep in mind what I can actually spend instead of just guessing and hoping I’ll have enough along the way.

Now that I’m contributing to my retirement account, just a reminder that the monthly savings percentage doesn’t include retirement savings. This is because the percentage budget should be performed using your aftertax income and retirement contributions will come from pretax income—unless you’re fancy and have a Roth 401(k) or similar account.

We’ll see how this budget works out, and I’ll check in with you all when the leaves start falling and everything starts dying around us—my favorite time of year!.

How Much Should I Contribute to My Retirement Account?

I know, a millennial talking about retirement—in this economy? I must be a fool to think I could ever retire at some point in the future. Will there even be a world when I retire? If there is, will there be enough Social Security left for me and the other elder millennials when our bodies are falling apart? (Who am I kidding? My body is already falling apart!)

Let’s talk logistics here: If you work at a company with an employer-sponsored retirement plan in place, you probably have either a 401(k), a 403(b) or a 457(b). Apparently, whoever came up with the numbers for these things thought they would be easily distinguishable, but let’s be honest, they all look like the same thing. Thankfully, that’s because they are similar vessels for your retirement savings with different labels on them.

If we think of the 401(k) as the generic version of an employer-sponsored retirement plan, the 403(b) is the version for nonprofit employers, charities and other public education organizations, and the 457(b) is for local government employees.

At AAII, we have a Vanguard 403(b) plan account that is eligible for employer-matched contributions after two years. When my two-year anniversary at AAII came around, I was faced with the decision of which Vanguard mutual funds to invest my future in. I recall reading very helpful commentary from our editor Charles Rotblut about his own Vanguard retirement account, and I looked for similar funds that would give me the proper diversification. (Remember the lessons Daniel Crosby and Michele Cagan shared on diversification?)

My 403(b) is currently invested in five mutual funds: the Vanguard 500 Index Admiral fund (VFIAX), the Vanguard FTSE All-World ex-US Small-Cap Index Admiral fund (VFSAX), the Vanguard Growth and Income Admiral fund (VGIAX), the Vanguard Mid-Cap Index Admiral fund (VIMAX) and the Vanguard Real Estate Index Admiral fund (VGSLX). But picking the funds was just the first piece of the puzzle.

Next, I had to determine the weight I wanted to give each of these funds. Following guidance from AAII, I chose to allocate 30% of my retirement plan to the large-capitalization asset class (this just means big stocks) via the Vanguard 500 Index Admiral fund, 20% to mid caps (medium-size stocks), 20% to small caps (the little guys), 20% to growth investments (they’re supposed to grow I guess!) and 10% to real estate (just for fun).

Here’s a breakdown of the funds and their weights:

Though there is money in my retirement account, I haven’t properly set up my pretax paycheck contributions. Up until now, I wasn’t able to afford the contributions. Everyone and their mother have told me I need to “max them out,” but this might not be possible for some young people just starting their retirement contributions.

So how much should I be contributing to my retirement account?

AAII matches up to 3% of my retirement contributions, so let’s start with 3% and see how that will affect my monthly income. Three percent of my biweekly paycheck comes out to $43.33, leaving me with about $1,400 per paycheck. This seems like a reasonable place to start. And when inflation takes a break, I can increase this percentage to make the most of my future money.

There’s so much more about retirement accounts that I have to learn, including how the taxes work, so stay tuned for more of my investing discoveries!

High-Yield Savings Accounts: Where Are They Now?

While I may not be making money in my investments right now, my high-yield savings accounts are making me more than I’ve made in years on my savings!

The market is down. Even if you’re not in the market, I’m sure you heard. But I’ve been trained well by AAII; I’m not scared by the red numbers on my Schwab account. In fact, I’ve made friends with them! We’re getting brunch on Sunday since the market is closed.

You might also be hearing about interest rates lately, and the possibility of them being raised. One of my savings accounts just raised my interest rate! It was an email I actually wanted to see from an institution I keep my money with. My high-yield savings account with LendingClub is now yielding 1.05% per year, up from 0.65% when I opened my account. LendingClub also noted that there is no minimum balance for my account (before it was $2,500). This makes me excited to see what this account can do for me; it’s already made a whopping $6.44 since the end of March (compared to $0.13 a month on my regular savings account, we’re living like kings).

I recall Erin Lowry saying 1.05% is the best rate on the market in “Broke Millennial,” so I feel like I lucked out with LendingClub. But Lowry also says, “Online banks will routinely fiddle around with the APY on savings accounts. One month it’s 1.05 percent APY, and two months later it drops to 0.75 percent. It’s actually within the bank’s right to do this—but that doesn’t mean you should hang tight at your measly 0.01 percent rate with your current bank because another bank might change from 1.00 percent APY to something a little bit lower. Because 0.75 percent still crushes 0.01 percent.” It’s good to know that my interest rate might not stay at 1.05% forever, especially since interest rates are fluctuating in other areas of the economy.

So with this higher interest rate, I should probably add more money to my LendingClub savings account to take advantage of it! My other high-yield savings account with SmartyPig is also doing well, and I’ll be adding more money to it soon to make the most of the 0.75% yield.

If you want to know more about interest rates, AAII’s financial writers and guest writers all have much smarter things to say than I do—I’m still recovering from high school trigonometry.

Opening High-Yield Savings Accounts

Last time I wrote about savings accounts, I asked my Instagram followers if they knew the interest rate on their savings accounts. I gave them four options: 1) Yes, but it sucks; 2) Yes, it’s actually making me money!; 3) No; and 4) I don’t have a savings account.

I got 15 responses: Three of my friends said they know their interest rate, but it sucks; six said they don’t know the interest rate; and six don’t have a savings account. I would say most of my followers fall between the ages of 20 and 40, and some of those without savings accounts are either younger than me or not working full-time yet.

However, no one selected, “Yes, it’s actually making me money!” This didn’t surprise me, but it motivated me to continue my research and finally open some high-yield savings accounts.

First, I revisited SmartyPig, which still offers a 0.70% annual percentage yield (APY), or interest rate, on my savings. This account will let me save up to $10,000 at this high interest rate, but once I have more than that the APY drops to 0.45%. I decided to call this my “grower not shower” savings account, where I’ll put money before investing it so that I can make the most of it before its intended purpose.

Signing up for a SmartyPig account was easy, it just required my name, address, Social Security number and creating some security questions. At some point I was asked if I had lived at my current address for more than two years. When I said no, I was asked to also enter my previous address. Once I read the disclaimers, I was able to manually connect my current bank savings account to make a transfer.

Then I wanted to look at some high-yield options that gave me more flexibility with my savings. LendingClub now offers a 0.65% APY, higher than it was when I last looked into it! The only restriction is that I must have at least $2,500 in the account. I’m calling this one my “movin’ on up” savings account where I’ll be putting funds to save up for buying a place in the future!

Opening an account with LendingClub was slightly different than SmartyPig. I was asked to create a security phrase, and I was able to connect my bank automatically using Plaid. From there, I could designate which account I wanted to connect and choose the amount I wanted to transfer. There were many disclosures to read, but most didn’t apply to the high-yield savings account I was opening and were instead about LendingClub’s other banking and card offers.

I decided to open two different high-yield savings accounts so that I can maximize the yields across both, and because I want to keep my savings goals separate as Bola Sokunbi explained in “Clever Girl Finance.” For now I’m keeping my regular savings account with my bank, designating it for emergency savings.

I’ll keep you updated on how my plan goes, and as it changes along the way!