Ah, money.

Last night I read a book on budgeting and saving. Its gross bourgeois assumptions aside, I really enjoyed reading it. (This, of course, has much to do with the fact that it had lots of pictures…I love books with lots of pictures.)

Growing up in a modest household, saving money became a habit, then a perverted kind of love. That love served me well, though, when at 23 I had saved up enough money so that I could quit my day job and work at my beloved retail job instead. (So what if it didn’t let me pay for much aside from my $1,125/mo studio in the Mission? It was for less than a year, until I started grad school…though it’s funny to think that “grad school” presented a more stable financial option for me back then.)

The problematic* nature of this post (and the book) will be addressed later; for now, as a single woman pushing middle age, I want to review the things that I know are good financial planning practice, even if I don’t always do them. (*Stuff like living off of a TA salary, having kids in grad school, etc.? That’ll be included in the “problematic” post to come.)

1. Review your spending. Where does all your money go? Does it leave your wallet for good causes, or does it just gush out into a big money hole? Track it for a month and be pleasantly surprised (or not).
2. Budget. No no, don’t budget like UC Regents does—because that’ll make you shrink the size of your library and pay too much to administrators and sports coaches instead. But do figure out what percentage of your income should be going to what. For Ph.D. students aspiring to be middle class, that starts with 25% for rent, 10% for utilities (Internet and phone included), 20% for savings, etc. (Um…right.)* Once you have a (realistic) budget, actually try to stick to it.
3. Build up an emergency fund. I’m not talking about emergencies like the Next Great California Earthquake; I mean the “3-to-6-months” worth of living expenses that’s often suggested by folks who apparently know better, including things like monthly loan payments. This is why Steps 1 and 2 are important. 
4. Plan five years ahead. Moving? Getting married? Spawning another human being? Account for that in addition to your earthqu…I mean, emergency fund, and set aside. (Or at the least, start a separate "fund" or two.)
5. Invest. What? You have money leftover?! Holy cow, it’s time to visit a site like ShareBuilder and start reaping the benefits of the capitalist market! (No, I'm not advertising for ShareBuilder...though it isn't a bad idea to invest even if you haven't totally prepped for Babies #1, #2, and #3.)

I also figured out last night that, to send a kid to UCSD for four years of undergrad, I would have had to have saved $580 every month for the last 18 years. I wonder how much I’d have to start saving if I were to send my kid to UCSD in 20 years. ::shudder::