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  • A Penny saved is a Penny earned (The Personal Finance Thread)

    Hey guys,

    That old saying really is true. A penny saved IS a penny earned.

    If you saved 50 cents on a 12 pack of whatever, it's almost like you earned it at work.

    Money managment is work!

    When I was younger, I was horrible with my money management. I wasted money on everything. I went out to eat everyday, I spent tons of money drinking at the clubs, spent money on tons of hobbies that really went nowhere. I ran up a bunch of debt; Credit card debt in particular. If I could do it all over again, I'd have alot more money than I do now.

    Now, I no longer go out to eat everyday. I shop around for good prices. (especially on the net) And I haven't had a credit card in 5 years!

    Problem is, I'm still not that good with money.

    Don't get me wrong, I am alot better, but I could still use alot of work on my personal finances and money managment.

    I still kinda have that thing where if I want something and I have the money, I buy it. I'm impulsive like that.


    Anyway, I thought I'd start this thread so you guys could help me with some money management tips, and in turn you'd be helping everyone else that's like me (Or worse).


    Please, feel free to post any tips you think are usefull.

    And I will do my best to reward you with GIANT cp's!!!


  • #2
    Benny, this is a great idea for a thread.

    I'm shocking with my money too. I just can't save! If anyone has any tips(and not just "Save it") I'd grateful!
    President of the GPA, Head of Mainland Europe Chapter




    formerly Officially Adopted by saltybuggah
    I adopted Skywalker

    I have been adopted by Chris Wade

    Comment


    • #3
      I have a foolproof plan that has worked well for me so far:

      Deficet spending.

      It evens out somehow for me.

      I also tend to have a magic wallet. One day, I have no cash, the next, POOF! I got like a 20 and some 1s. I like that wallet. I just hope im not sleep-stealing.

      On a serious note:

      I have 3 credit cards. Yet I do not use them to go on shopping sprees (like, ohmygod!), but rather Ill spend 20 bucks here, 5 there, and I always pay it back in full at the end of the month.

      I gots good credit now! I was able to get a 16,000 dollar loan on my own! (for school).

      Like TDK said, dont go eating out every day.

      Wait, this is for TDK? Crap. I have no money management tips you wouldnt know. Poop.

      Actually, here is something: my grandma does this thing she calls mad money.

      She takes any bill over $5 and puts them somewhere safe to never be used. but she keeps her $1s and $5s.

      She saves, well, mad money!

      Comment


      • #4
        Benny, I'm pretty sure your problem with money is your DVD addiction.



        The best advice I can give is to learn to budget your money. Take the time to sit down and map out your monthly income and required expenses (DVDs not included), including non-eating-out food. Try to set aside that required money and pretend it isn't even there until you use it to pay your bills. Take what you have left over and you've got your discretionary income.

        From that money, try to allocate a percentage toward a savings account, mutual fund or the like. Then the remaining amount you can spend however you want. But try to stick to only that amount.

        The hardest part is just having the willpower to refrain from spending beyond your budget.

        I used to think that credit cards were the devil incarnate (see my avatar). But once I got my budgeting down I started to use my cards again but just made sure I stayed within my budget and paid them off every month. Now I get nice rewards from the cash-back bonus I earn on the cards but I never pay any interest because I don't carry a balance from month to month. But I would only recommend doing this once you are confident you can stick to your budget despite the open-ended nature of credit cards.

        Sorry for rambling but you asked.


        p.s. I keep track of my checking account on my computer and I use "imaginary" accounts to separate my money even though it's really in a single account. It helps me to avoid spending that money.

        p.p.s. If you start socking away money, a good way to start would be to open a Roth IRA in a reliable, low-cost mutual fund like the Vanguard 500 fund. (Dollar cost averaging is key.) Roths are nice because you can withdraw any non-interest-earned without penalty should you need it before retirement.
        "You can't take the sky from me..."
        ------
        "You can't shake the Devil's hand and say you're only kidding"

        Comment


        • #5
          first thing, a two pronged attack.


          Pay off all consumer debt (credirt cards, loans) starting with the smallest one first. Pay an extra you can afford on it. Pay the minimums on the rest. (we'll get back to this)

          While doing that, find a percentage of net income that you can set into an ccount, ING, or a 401k, or IRA. Something that is not instantly accessible. Build 3, 6, or 12 months of income into that account for emergencies, then place it in savings one you are there. NEVER TOUCH THIS ACCOUNT UNLESS ABSOLUTELY NECESSARY.

          With the consumer debt, once you have paid off the smallest debt, roll that payment that you have been using on the smallest one into the amount you have been paying on the next smallest one, and focus on that. Since you haven't been using that money to spend anyway, you won't miss it from your expendable cash. Continue to pay off and roll up, and by the time you get to your largest debt, it gets paid off quickly (in my case, I am down to 1 credit card and 1 student loan, and the principal drops much more quickly when you can send them $800/mo instead of $130. So, when that card is paid off, I'll take that $800, and roll it into the $130/mo for my student loan for a monthly payment of $930. On a remaining principal right now of over $14000, at $930 a month is 16 payments, rather than 106 or whatever it would be).

          Once your consumer debt is paid off, you will be amazed at how much money you have left over after paying bills and investing and saving.


          Then, you have the luxury of paying cash for everything. As long as you continue to save and invest your initial amount of net income (or more), you can pretty much do whatever you want with whta's left.

          Thsi has worked for me. I went from basically living check to check to being able to buy a house in thsi crazy real estate markte in San Diego, in 5 years.

          I have paid off 4 credit cards, 1 car, and now have...well, I have more than a year's worth of my income accessible to me, plus two college savings accounts and another ivesting account. Now, I need to save a year's worth of my wife's income. MUCH harder to do, but I enjoy the challenge.

          I am not rich, by the way. If I or my wife lost a job, we'd probably only be able to float for a year, and then we'd be broke. So, I am not wealthy by any means.
          Last edited by Jared; 08-22-2006, 06:43 AM.

          Everybody's gotta elevate from the norm...

          The greatest list of music I don't own on CD :sad:
          You should check these guys out

          Comment


          • #6
            I am the exact same way with my money. If I have it I spend it. I have never gotten a credit card to this day, other than my bank visa card, because I know how bad I am and never wanted to go in debt. The thing that got me to start saving though was just getting a second bank account and I started putting about 1/2 of the "extra" money I had every month into there. The extra money would mean anything left after bills, food, and any other essentials. Then I never touch that account, I try to just forget that I even have it. I also made sure to get a regular savings account so I would have to actually make a trip to the bank during bank hours(which I am usually working) just to make it that much harder to go get it.

            Works kinda good for me so I guess it is worth a try.

            Comment


            • #7
              Having a credit card is not a bad thing. Well, I guess if you don't have a lot of control then it could be a bad thing. So nevermind.

              Me and my wife set out a budget. We began by tracking all money in-flow and then tracking all monthly out-flow. Then we decided to set a goal. Save $1,000 a month. Anything left over was free for us to spend.

              We also figured out that cash in the wallet was as good as spent. So we now only get out a set amount of cash per week. When it is gone, we are done spending. That has helped a lot more than I expected.

              We always pay our credit card off at the end of the month. None of this paying the minimum payment. Why pay interest? If it isn't a car or a house, then it should be paid off at the end of the month is our rule. If we can't do that, then we don't buy it. We have an emergency pool to help pay off emergencies, car troubles, house troubles, etc.

              Then when you have enough saved, put that money to work. Don't just let it sit in a savings account making >1% interest. It doesn't always have to be investing in high risk ventures either. Look in to IRA's or CD's, they can get you some decent interest without risking losing it on the stockmarket.
              Last edited by LDB; 08-22-2006, 07:08 AM.
              Patriotic dissent is a luxury of those protected by better men than they.

              Comment


              • #8
                Originally posted by The Dark Knight
                Hey guys,

                That old saying really is true. A penny saved IS a penny earned.

                If you saved 50 cents on a 12 pack of whatever, it's almost like you earned it at work.

                Money managment is work!

                When I was younger, I was horrible with my money management. I wasted money on everything. I went out to eat everyday, I spent tons of money drinking at the clubs, spent money on tons of hobbies that really went nowhere. I ran up a bunch of debt; Credit card debt in particular. If I could do it all over again, I'd have alot more money than I do now.

                Now, I no longer go out to eat everyday. I shop around for good prices. (especially on the net) And I haven't had a credit card in 5 years!

                Problem is, I'm still not that good with money.

                Don't get me wrong, I am alot better, but I could still use alot of work on my personal finances and money managment.

                I still kinda have that thing where if I want something and I have the money, I buy it. I'm impulsive like that.


                Anyway, I thought I'd start this thread so you guys could help me with some money management tips, and in turn you'd be helping everyone else that's like me (Or worse).


                Please, feel free to post any tips you think are usefull.

                And I will do my best to reward you with GIANT cp's!!!


                You need two things.

                * Rifle
                * Lumpy, old matress.

                Now, stuff your money into the matress, sit on it & whenever somebody comes near you or calls on the phone, you say "Git de hell off my land ya squatter!"
                ************************************************** *********
                Another tactic.

                * Get yourself a bunch of mason jars. Convert all your cash to change & fill those jars. Pee in those jars & then bury them. That way, you'll think twice before you want to get your money. Or maybe that's just a vodoo spell I heard of once....
                ************************************************** *********

                Let's try this again. Arrange for money to be taken out of your check each week. You can either do this through your employer, or you can arrange with your bank that your check be automatically put into your checking with a percentage of that automatically placed into your savings.

                401k?
                Roth IRA?

                Have all your bills withdrawn from your checking. Do budget billing. A lot of places offer that.

                Hell I do't know. I'm broke right now because my hubby likes to tear up his truck & fix it in a never ending vicious cycle.

                That and I can't remember where in the yard I buried those damn jars.
                COPYWRITED MATERIAL Copyright © 1975 by Dr Velcro

                Comment


                • #9
                  Originally posted by Jared
                  first thing, a two pronged attack.


                  Pay off all consumer debt (credirt cards, loans) starting with the smallest one first. Pay an extra you can afford on it. Pay the minimums on the rest. (we'll get back to this)

                  While doing that, find a percentage of net income that you can set into an ccount, ING, or a 401k, or IRA. Something that is not instantly accessible. Build 3, 6, or 12 months of income into that account for emergencies, then place it in savings one you are there. NEVER TOUCH THIS ACCOUNT UNLESS ABSOLUTELY NECESSARY.

                  With the consumer debt, once you have paid off the smallest debt, roll that payment that you have been using on the smallest one into the amount you have been paying on the next smallest one, and focus on that. Since you haven't been using that money to spend anyway, you won't miss it from your expendable cash. Continue to pay off and roll up, and by the time you get to your largest debt, it gets paid off quickly (in my case, I am down to 1 credit card and 1 student loan, and the principal drops much more quickly when you can send them $800/mo instead of $130. So, when that card is paid off, I'll take that $800, and roll it into the $130/mo for my student loan for a monthly payment of $930. On a remaining principal right now of over $14000, at $930 a month is 16 payments, rather than 106 or whatever it would be).

                  Once your consumer debt is paid off, you will be amazed at how much money you have left over after paying bills and investing and saving.


                  Then, you have the luxury of paying cash for everything. As long as you continue to save and invest your initial amount of net income (or more), you can pretty much do whatever you want with whta's left.

                  Thsi has worked for me. I went from basically living check to check to being able to buy a house in thsi crazy real estate markte in San Diego, in 5 years.

                  I have paid off 4 credit cards, 1 car, and now have...well, I have more than a year's worth of my income accessible to me, plus two college savings accounts and another ivesting account. Now, I need to save a year's worth of my wife's income. MUCH harder to do, but I enjoy the challenge.

                  I am not rich, by the way. If I or my wife lost a job, we'd probably only be able to float for a year, and then we'd be broke. So, I am not wealthy by any means.
                  Good post. IRA is great but as far as not touching it. Should be to a degree. You will not be taxed for Down Payment on house or a "higher education" so you can use for College fund as well.

                  It is ok if you invest wisely into a house becasue you are building equity and of course depending on market though.

                  Credit cards are a good thing to establish additional income (same with a vehicle loan/mortgage) As long as you mkae payments.

                  I have credit cards and use for everything and pay off every month. Also great for emergency purposes

                  Comment


                  • #10
                    Originally posted by NBudris
                    Good post. IRA is great but as far as not touching it. Should be to a degree. You will not be taxed for Down Payment on house or a "higher education" so you can use for College fund as well.

                    It is ok if you invest wisely into a house becasue you are building equity and of course depending on market though.

                    Credit cards are a good thing to establish additional income (same with a vehicle loan/mortgage) As long as you mkae payments.

                    I have credit cards and use for everything and pay off every month. Also great for emergency purposes
                    Personally, I believe credit crads serve no purpose but to make banks money.


                    There is a common myth that you need to have a credit rating to get a loan.

                    This is incorrect.

                    You need to have a GOOD credit rating. Credit ratings are bestowed to those who borrow.

                    If you have NO credit rating, then it means you have never had to borrow before. All you need to do is verify income and assets to get a loan for a home or car. In reality, most people may not need a loan for a car if you are smart and buy either pre-owned, or save like a fiend. If you have no debt, and stable income and assets, you'll actually get a better interest rate than if have a fantastic credit rating. Loan officers will tell you different, but they work for banks. Go read the credit and lending laws for yourself. http://www.fdic.gov/regulations/laws/index.html


                    The credit cards are my wife's. I personally have never had a credit card. I shudder to think what kind of debt I would have had is I DID have my own account.

                    Also, I have never had a car payment. MY wife thinks I am crazy, but I see no need for new car every 4 years. I see no reason for a new car at all. Let someone else do that. I buy one out right every 6-8 years. I have never spent more than $6,000. I feel I get GREAT value out of what I pay. I buy them with low milage, and use them until I NEED to replace them.

                    As far as IRA, I do not have one. I have 401k, 526k, a Coverdell for the college education, 3 different mutual funds, and an employee stock purchase plan that I use wisely. I sell some off as soon as I can to diversify the portfolio. Since I buy it at a discount, I ALWAYS make a profit.


                    Regardless, any account with a penalty, either a tax or otherwise, is good because I am LOATH to draw on it.

                    My goal is to not really retire (since I wish to work for myself at some point), but to not HAVE to work once I hit 50. Also, to have the house paid off, maybe own an additional property.

                    And have more money for aging health care than I will ever need.


                    Fairly modest goals, I think.

                    Everybody's gotta elevate from the norm...

                    The greatest list of music I don't own on CD :sad:
                    You should check these guys out

                    Comment


                    • #11
                      Even though I don't have very much money, I do save.

                      I don't have any credit cards or car loans. I'd rather save my money and get a loan from myself & charge myself interest! Unfortunately, I rent and that sucks, but right now we don't want to mow grass & worry about things like a roof or water heater. To think about it a little more, I'm stupid for not owning because of all the great tax breaks I hear you get when you own.

                      I think living beneath your means is the best way to go.



                      That's why I eat pickle loaf & microwave burritos every day (j/k).
                      COPYWRITED MATERIAL Copyright © 1975 by Dr Velcro

                      Comment


                      • #12
                        Originally posted by Jared
                        Personally, I believe credit crads serve no purpose but to make banks money.


                        There is a common myth that you need to have a credit rating to get a loan.

                        This is incorrect.

                        You need to have a GOOD credit rating. Credit ratings are bestowed to those who borrow.

                        If you have NO credit rating, then it means you have never had to borrow before. All you need to do is verify income and assets to get a loan for a home or car. In reality, most people may not need a loan for a car if you are smart and buy either pre-owned, or save like a fiend. If you have no debt, and stable income and assets, you'll actually get a better interest rate than if have a fantastic credit rating. Loan officers will tell you different, but they work for banks. Go read the credit and lending laws for yourself. http://www.fdic.gov/regulations/laws/index.html


                        The credit cards are my wife's. I personally have never had a credit card. I shudder to think what kind of debt I would have had is I DID have my own account.

                        Also, I have never had a car payment. MY wife thinks I am crazy, but I see no need for new car every 4 years. I see no reason for a new car at all. Let someone else do that. I buy one out right every 6-8 years. I have never spent more than $6,000. I feel I get GREAT value out of what I pay. I buy them with low milage, and use them until I NEED to replace them.

                        As far as IRA, I do not have one. I have 401k, 526k, a Coverdell for the college education, 3 different mutual funds, and an employee stock purchase plan that I use wisely. I sell some off as soon as I can to diversify the portfolio. Since I buy it at a discount, I ALWAYS make a profit.


                        Regardless, any account with a penalty, either a tax or otherwise, is good because I am LOATH to draw on it.

                        My goal is to not really retire (since I wish to work for myself at some point), but to not HAVE to work once I hit 50. Also, to have the house paid off, maybe own an additional property.

                        And have more money for aging health care than I will ever need.


                        Fairly modest goals, I think.
                        I only have a 401K in two sepperate areas. As far as credit cars go you can take avantage of them if you pay off in full every month (you wont pay interest). Cash back or airline miles etc., Citi bank and Discover offers some good cash back and B of A got some great airline miles.

                        Same here I am not focusing on retirement but live comfortably and not work by around 50 (i am 26) I put 6 percent in 401k and will up that to 9 because have a child do in Dec.

                        I ahve not payed attention to my mutual funds yet. Kind of just have it in there and have not switched (will be putting more time into it... in near future)

                        **Also I take all the change from cash and left over cash and put it in a piggy bank when it is full i cash it in and put back in piggy bank. I could be putting it in places like stocks, bonds, cds but I think it is more of the feeling of keeping it in one area.

                        Comment


                        • #13
                          Don't spend more than you earn. (That's possible.) Try to use you cash or check card. Rarely if at all use credit cards to run huge balances.

                          I use my credit cards to book hotels and make purchases online that I will pay off on the billing month.


                          Oh yeah, write down your check card transactions. When we get use to pulling out our check card we don't visually see the money depleting. So write down the transactions because it is easy to use the check card......just remember it is same as cash.
                          Last edited by Emancipator; 08-22-2006, 09:41 AM.
                          Emancipate your mind!
                          The People's Poster

                          Comment


                          • #14
                            If you are renting or have a mortgage, the rule of thumb is to only pay rent or mortgage at no more than 35-38% of your gross monthly earnings. (I'd wish they just make that your net monthly earnings. Seems more realistic.)
                            Emancipate your mind!
                            The People's Poster

                            Comment


                            • #15
                              benny...

                              i to suffer from one would call "impolsive ratardanus syndrome"...

                              :brick:

                              now that may not be a real symptom...

                              but heck.. im young...

                              and i sorta suck at saving...

                              cos im always the first to lend someone money when they dont have any...

                              i tend be the first to shout everybody first...

                              and the first to pay for someone who has no money...

                              and my mates infulece on me..

                              cos he is rich... and his papa pays for all...

                              and i live like him...

                              but with my own money...

                              which is working out ok... but not the best....

                              but i NEVER BORROW MONEY FOR I AM A PROUD AND INDEPENDANT INDIVIDUAL!!!

                              but dissregarding everything that you have ever done...

                              like buying takeaway food and such (which i do on a daily basis)...

                              try this....

                              cos its really simple and it works for me...

                              cos after a few months...

                              i know ill have money...



                              get you pay check every week...

                              and look at it...

                              hold it...

                              stroke it....

                              admire it...

                              and make passioanate eye love with it...

                              but once thats done...

                              put 1/4 of it away!!!

                              simply because most people could be ok with a reduction in the salary...

                              i for one get like $250 a week...

                              and i put away...

                              $50 to a $100 away every week into a beer holder under my bed...

                              and soon enough you look into it.. and BAM!!

                              the cinny-walletitis is upon you!!!

                              you have a lump sum!!!

                              but in reality...

                              i dont and i dont think you should ever regret spending money....

                              there is being stupid with it...

                              but if spending a few buck here and there to enjoy life....

                              well why the hell not???

                              life is short...

                              LIVE IT!!!

                              save a little and spend the rest!!!


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