Money Infant was started to provide clear and simple advice about money. How to save it, invest it, make more of it and keep more of what you make. The name came from two things; first the belief that when it comes to money many of us are like infants or at the very least children. We don’t really understand it. Secondly I had infants on my mind when choosing the domain because my wife (Golf) and I are expecting.
My name is Steve and I admit that for a very long time I was a money infant. Through the same process as an infant, real personal finance experiences (sometimes painful), I learned more about how money works, how to be safe with my money and how to develop a healthy relationship with money. I don’t claim to be a money adult yet (I still throw tantrums occasionally), but I hope that through this blog I can further my own understanding of money and help others to do the same.

As a money infant I have fallen many times while learning to walk. Most of my physical adult life has been spent in debt and living from paycheck to paycheck. Back in 1999 I was over $40,000 in debt (excluding mortgage debt). Because of a divorce I was forced to file bankruptcy. That left me with a clean slate and you would have thought that I had learned my lesson, but sometimes we need a bit of repetition for the lesson to sink in; fast forward to 2006 where I now found myself with over $60,000 in non-mortgage debt.

Obviously something needed to change. I began learning everything I could about personal finance and how to get myself out of the credit card debt loop. I created (and stuck to) a budget and began slowly paying down those debts. As I write this I am not debt free, I still have about $7000 in credit card debt and $9400 in student loan debt. I do now know how to manage my debt and it no longer scares me like a shadowy boogeyman.

That being said, I have paid off close to $60,000 in credit card debt over the past 3 years, increased my 401(k) contributions to 13% 20% of my salary, created a $5500 cash cushion for emergency use, my non-salary income is in excess of $1500 a month and most importantly I have begun to learn about how to manage my own money without relying on financial guru’s, banks or the government. I have learned to stand on my own.

While I may be a money adult in some areas (budgeting, debt reduction) I know that I am still an infant in others (investing, frugality) and that’s fine. I am still growing and I hope you’ll join me here at Money Infant and grow with me.

Currently my core ideals about money and life boil down to the following 7 things. I may not personally be where I feel I should be with any of them, but they form the core of my philosophy towards dealing with my own money and I feel that many of you can probably take something away from them as well.

Never Ever Ever Spend More Than You Make – It seems common sense and should be part of all of our lives, but for some reason here in America spending beyond our means seems to be the rule rather than the exception. Trust me, if you cut your spending below your earnings you will almost always feel more in control of your financial destiny. And as time goes on this one rule can make you rich because you will always have an abundance of cash as compared to your standard of living.

Always Have Emergency Savings – If you’re following rule #1 then this will come easily. Even if you can only put aside $500 or $1000 right now do it! You never know what life might throw at you and this little bit of emergency savings can turn out to be a blessing. My own goal is to eventually have 12 months of living expenses in reserve. This may be extreme, but considering my other goals (freedom from my JOB and expatriating to Thailand) it really isn’t. For most people I feel that 4-6 months of living expenses is sufficient to provide both a sense of security as well as protection from unexpected circumstances.

Save For Your Retirement – With life expectancies on the rise this becomes more and more important. You certainly don’t want to work for the rest of your life. Plus, many of the retirement plans (401k, 403b and IRA’s) provide significant tax advantages. You could literally save $1000’s of dollars a year from your tax bill by properly utilizing retirement plans. And the money grows tax free. I wish I had REALLY understood all this when I was younger. At 43 with hardly any retirement savings I am now playing catch up frantically. If I had only had the foresight to put a meager $100 a month in an IRA since I started working 27 years ago I would now have $95710.63 (compounding at 7%). Not too shabby! And by continuing in that fashion until I would be 67 years old I would have $585430.49! And all for parting with just $100 a month which is less than my cell phone bill.

Minimize Your Taxes – There are numerous ways to reduce your tax bill and if you don’t understand them all (and who does!) get yourself to an accountant or CFP who does. Starting your own business, saving for retirement and buying a home are all good ways to reduce what you give to dear old Uncle Sam. I will be reducing my own taxes in 2010 by roughly $3000 just by increasing my 401k contribution. And as my online income grows I am learning just how powerful having a personal business can be in terms of tax savings.

Stay Out Of Debt – Another no brainer that far too many of us do not follow. I have been guilty of breaking this rule ever since I got my first credit card back in college over 20 years ago. Finally I have seen the light and if things go well I will have gotten out of the credit card trap very soon ($6900 to go!). Next up is the student loans and car payments and I will be debt free! Honestly, debt is a huge drain on your ability to save and a source of stress to both the individuals and relationships. While it’s true that some credit can be good, in most cases you are far better off simply waiting and saving for your purchases. In 2010 debt is ruining this country and for no good reason. Someone should run a “Say No To Debt” campaign and get us out of this terrible addiction.

Make A Budget And Stick To It – This rule has been the #1 reason I have been able to stay on track and pay off so much debt in such a short period of time. Seeing where your money goes on a weekly (or better yet daily) basis is eye opening and really helps to keep you accountable to your goals of paying off debt and saving. While goals are great things to have, you also need a plan in order to reach your goals and a budget provides the framework for the plan to be debt free and financially self sufficient. You don’t need to go all out and track every penny (I don’t), but you should at the very least know your broad income and expenditures. Oh and your budget should be realistic too, otherwise you’ll go way off track and end up giving up on it. Budget realistically and trim the unnecessary expenditures from your budget and you’ll be much more likely to succeed.

Dream Big – This one may not be entirely financial in nature, but it can help with your finances. My own dreams include paying off all my debt, creating a 12 month cash cushion, quitting my JOB and moving to Thailand with my family. These things together pushed me outside what I would normally think of as typical (trading time for money) and allowed me to dream bigger (create my own income stream). As I began to realize I could do that on a small scale my dreams have escalated and I am finding that we can often do much more on a larger time frame (think 1-3 years) than we typically believe we can. Pushing myself to dream bigger has made me more successful in meeting my goals than I would have ever believed was possible 3 years ago.