Recently I got a question on my Ask page (ask.fm/benprunty) about financial advice.: “Hey Ben, I remember you mentioning that you use a budget. Any tips for someone looking to be more in control of their saving/spending?” My answer turned out to be so long and sprawling that it couldn’t fit in ask.fm’s answer field. So here is the full answer for everyone. Be sure to check out my Ask page if you haven’t already. There’s a ton of great questions on there. 

So a lot of my good financial situation comes from luck and privilege; I don’t have any student loan debt because I only went to a modest, 2-year program at a local college. I don’t have any debilitating, costly illness, and I have no children. Most recently, I was part of a team that made a best-selling PC game.

A particularly important advantage/privilege/luck thing happened in 2010, when, while I was working part-time and struggling to make ends meet, I inherited about $10,000. This I used to

1. pay off all my credit card debt
2. make my very first financial investment, in index funds
3. buy a modern laptop and Native Instruments Komplete 6, which put me on track to make digital music in a much more versatile way than I had been doing before.

These decisions helped put me in a more comfortable, less stressful position that also allowed me to focus on my music more, which led to me making music for Gravity Ghost and FTL.

Why am I telling you about this? So that you can understand my privilege. It would feel disingenuous to give you financial advice *without* mentioning these advantages.

So what can I tell you that could actually be useful to you? First, credit cards. Ever since I paid mine off in full, I have never used a credit card. The only one I had expired years ago. I don’t think I will ever use one again. This is not to say that you can’t use a credit card, but you should strongly consider not using one. The only way I was able to use a credit card without spiraling into debt was by setting a pretty hard limit on how much the balance could be. I tried to keep the balance no higher than around $3000. Read up on credit cards, how they work, and what financial experts have to say about using them, if you haven’t already.

I use YNAB (ynab.com) to track my money and budget. This has had the extraordinary effect of easing my anxiety about my finances in a way that I didn’t think possible. I strongly recommend using the service. You absolutely must read all their literature describing the philosophy behind it before you start though, or you will not be able to use it effectively. It takes some effort and upkeep to use it continuously, but I’ll take that over crippling anxiety any day. Also, if you are currently using Mint.com, I say ditch it and use YNAB instead. It might actually change your life and make you happier.

Every month I make a contribution to one of my investment accounts. I have a US index fund and a global index fund that I invest in through Vanguard (vanguard.com). The problem with these is that you generally need a sizable amount of money just to start one ($3000 I think). I was only able to start one in 2010 because of that inheritance. These days when I get a large amount of money all at once (Steam sales, large game contract) a significant portion of it goes into one of the funds. Even when I don’t make much in a given month (this happens a lot when you’re self-employed), I’ll at least invest a little bit of money.

Why do I invest in index funds specifically? When I inherited that money, I bought and read this book, The Elements of Investing. It’s short and straightforward and will teach you how to invest sensibly. Index funds hold stock in a broad range of different companies across the entire economy. When buying, say, US index funds, you are essentially investing in the American economy itself, which historically has been a fantastic bet.

Being more in control of your spending is tricky. Budgeting and using YNAB definitely helps. Budgeting doesn’t necessarily mean you have to live like a monk, though. The simple act of keeping track of everything you spend will naturally lead to you making better decisions, without necessarily needing to arbitrarily limit yourself.

So maybe focus on tracking your money first with some kind of budgeting system. When I was making very little money I would write out a little mini-budget every week, letting myself know what expenses or bills were coming up compared with how much money was in my checking account at the beginning of the week, and then estimating how much money would be there by the end of the week. This helped keep me on track and less stressed when I was living paycheck-to-paycheck.

Overall, wrangling your finances is a skill that takes time to develop, just like any other skill. I hope this can help in some way. If I think of anything else I’ll write more about it on this blog.