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[hapless_peasant]

Alright. Bad news. I have an overdraft around $100 and this is the first time in my life I have seen overdraft!! I was wrong in estimating the cash flow. I charged the registration fees for my conference on my credit card. The mistake I made is that I paid off my credit card way too early.  It is my fault.

I max out my contribution to 403(b) and max out my Roth IRA. As a result, my each paycheck is less than $1000. My disposable income is around $17,000 per year. Based on that income, I contribute $100 per month to my mutual fund account. My husband helps to pay some of my bills and that's a big help.

Tell me, how can I do better?

[clean]

One school of thought is that YOU dont have an income and HE doesnt have an income. When you got married there was something to the extent "richer or poorer"... You became one household. That household has one income.  Are you budgetting that income together? 

You are married.  Why do you need to operate as if you were only room mates? 

My advice, for what it is worth, is to sit down with your hubby, tell him that you want to share all aspects of your life together, especially the financial parts, and go about doing a budget together.

Start with the income you both bring in and then spend the money.
(Food, house/rent, car, utilities, savings, entertainment, 'blow money - small time spending money'...)

One place to start for help with the budget (there are forms in the back to get you started) is Dave Ramsey's total money makeover

Good luck

[dismalist]

Overspending $100 because a credit card was paid off too soon is no reason to buy a book. You don't have a problem if you don't do it again. The only real issue is those pesky high interest rates on overdrafts.

[pedanterast]

http://www.thesimpledollar.com/2006/12/09/review-the-total-money-makeover/

This is a fairly recent, reasonably balanced review of Ramsey's book.  Might help you decide whether it would be a good purchase for you.

[womanofproperty]

OP, you seem to have clear financial goals that are important to you.  You also seem to have a great deal of self-control, and frugal habits, so I think you will be okay financially.  It's not like overdrafts are a chronic problem for you.

However, from this and other posts, it does seem that some of your actions may end up making your life more stressful than it needs to be.  For instance, as clean notes:

You are married.  Why do you need to operate as if you were only room mates?

From this and other posts you have made, it seems like your husband is on your side.  So while you may have sound reasons for handling your finances separately in your marriage, you may not need to do this.  Working with your husband on a financial plan that works for both of you may allow you to reach your financial goals and reduce your stress.

[nada_cum_laude]

If you carry multiple accounts with a bank, they will usually allow you to set up some kind of overdraft protection account (overdrafts are covered either from a linked savings account or a line of credit).  If it's a simple mistake in estimating the timing of cash inflow/outflow, then you're covered and it's no big deal.  The main thing is that you must always immediately pay the amount back to your protection account as soon as your balance permits it.  You must be disciplined enough to avoid draining your backup savings account or running a balance on your line of credit.  OP, given how distressed you seem to be about this, I have no doubt that you would be dilligent in this regard.

We've had this feature for probably a decade now, and it's a life saver. 

[dismalist]

http://www.thesimpledollar.com/2006/12/09/review-the-total-money-makeover/

This is a fairly recent, reasonably balanced review of Ramsey's book.  Might help you decide whether it would be a good purchase for you.

Possible issues of self control aside, which the OP does not seem to have, this book is downright misleading. Debt is healthy when you're young and your income is low; you pay down when you're older and have a higher income. Should I live in a cave for years and years to save up to buy a house with cash, or should I borrow to buy a slightly smaller house now, and live in it for many, many years, instead of in a cave? Debt is also healthy to smooth over periods of bad luck or adversity.

[biologist_]

If you're saving that much money, why not keep an extra $1000 dollars in your checking account so you don't have to worry about overdrafts and timing of payments.  Just skip one or two months of retirement contributions, put the amount into checking and then restart the retirement savings.  Just think of $1000 as the baseline amount for the account rather than $0.

If you're worried that you'll spend the money if you leave it in checking, open a savings account with the same bank and link it to the checking account as overdraft protection.

[pedanterast]

Possible issues of self control aside, which the OP does not seem to have, this book is downright misleading. Debt is healthy when you're young and your income is low; you pay down when you're older and have a higher income. Should I live in a cave for years and years to save up to buy a house with cash, or should I borrow to buy a slightly smaller house now, and live in it for many, many years, instead of in a cave? Debt is also healthy to smooth over periods of bad luck or adversity.

I've been studying about this book and this author and one thing that really bothers me is that Ramsey assumes a "12% return" on equities ("the stock market") over any given period, no matter how short.  That's very disturbing, especially when he uses that assumption for the relatively short time period for "529" college savings accounts.  He also doesn't seem to grasp the effect of inflation on saving for retirement.

[dismalist]

Possible issues of self control aside, which the OP does not seem to have, this book is downright misleading. Debt is healthy when you're young and your income is low; you pay down when you're older and have a higher income. Should I live in a cave for years and years to save up to buy a house with cash, or should I borrow to buy a slightly smaller house now, and live in it for many, many years, instead of in a cave? Debt is also healthy to smooth over periods of bad luck or adversity.

I've been studying about this book and this author and one thing that really bothers me is that Ramsey assumes a "12% return" on equities ("the stock market") over any given period, no matter how short.  That's very disturbing, especially when he uses that assumption for the relatively short time period for "529" college savings accounts.  He also doesn't seem to grasp the effect of inflation on saving for retirement.

Christ, man, 12%? Would that life were so easy (for savers)! The real (inflation adjusted) rate of return in the long run is not more than 5%, probably less. [Sorry, I forget the exact numbers.] Part of that will be compensation for bearing stock market risk. This book is clearly misleading.

I just wish to add to my previous post that the amount of debt you get into when you are young should of course be dependent on the interest rate. The sky is not the limit.

[hapless_peasant]

Thanks for all of your suggestions!

Actually, it is easy to save money when you don't see money sitting in your bank. If I have money in my checking account, I will buy CDs to resist the temptation of spending! Else, I will buy mutual funds or something like that. Auto deduction works like a charm. Each month, I just deduct the $$ from my paycheck and move it to my retirement account.

Spouse and I had a talk. Basically, he is doing the heavy lifting in paying off the bills. Most of the bills including eat out and other luxuries. He pays for my tuition fees in my doctoral program, which costs me around 5K per year (state funded college is godsend!). I am careless. That is all and I will be more careful and patient watching the cash flow. I will read more books about money management.

Another thing is that I am way too busy. Not an excuse I know. Doing Ph.D full time and working full time can get quite overwhelming. Tomorrow, I'll travel to a big city to present my paper (for the first time!) in a pretty good conference and meanwhile I'm working on a new paper.....

The thing is I have to watch every penny I spend when my disposable income is so less but I am careless...and not to mention, I am under lots of stress.

[pedanterast]

It sounds to me like you have no formal, written budget.  If that's true, that is the first thing to address.

[clean]

It sounds to me like you have no formal, written budget.  If that's true, that is the first thing to address.

One place to start for help with the budget (there are forms in the back to get you started) is Dave Ramsey's total money makeover