Financial Wisdom

[shanedman]

I have a bad reputation with if i have money available to me, it burns a whole in my pocket.. i always seem to find ways to spend money before using it for what i SHOULD use it for.

Please send your thoughts/good-vibes/prayers my way for some financial wisdom on my part. Specifically over the next 3 months or so.

I will have some money flowing in/out a few times via some vehicle sales/buys. Should be a frustrating time for me. It may not sound too serious, but i REALLY do have an issue with money stuff...
Possibly the product of growing up poor, and wanting but not being able to get due to lack of funds.
And now days since i have funds once in a while, it makes it hard to say "no" to the wants so i can get the needs.

[Gravel Guy]

Done Dusty!
590 am has a great finance guy on in the evenings...Clark Howard. Check him out!

[kurt]

I have two credit unions for my direct deposits. One is for all my bills and savings. All of the bills either auto pay on specific dates or in the case of the variable amount, I pay them manually via online banking. There is no check book and the debit card (used for repairs, etc.) is in the lock box at the branch closest to my house. The other account gets my disposable income and the debit card resides in my wallet. The important stuff always gets paid and access to the money earmarked for recurring expenses is very hard to access.

[El Fenix]

The Richest Man in Babylon. Its a classic. Read it, and live it.

[WoodButcher]

Glad to pray for you Dusty. That's an area all of us could probably use some help with. I try and keep things earmarked. So like when I sold my Transalp, the money was planned for the next bike, but it was cash. So I put it in an envelope and tucked it away for the next bike. That way it never made it to my wallet or the bank account to get spent on something else. Granted that isn't the solution for long term planning, but it is kind of like what Kurt does. Compartmentalize your money. Day to day living money goes in one pot, fun money in another. And if you are saving for the future, that goes into another pot that is harder to get to.

[jimhaleyscomet]

Have you ever heard of Dave Ramsey and Financial Peace?

His basic premise is to pay cash for everything and get debt free. It really is a path to Financial Peace. He has a radio show on talk radio, web site, and classes that are often taught through local churches.

I am no expert or psychologist but sounds like you have to get your mind straight first and then the money sector will become much easier. Ramsey's program really helps with the thinking part first so the money transactions become much easier.

A great way to start is to try for about 6 months. If you don't like it you can always go back and take on a bunch of loans buying stuff.

I used to act like you describe, then I got Debt Free and find it easier to forgo the big purchases now. Recently I considered buying a new truck, but instead decided I liked the way it felt to have the money in the bank and available. I may buy the truck later but for now it is a great feeling to know I could purchase it if I wanted, but I choose not to.

Peace

p.s. I have several bikes listed below but all (except the 83 honda purchased 30 years ago) were purchased with cash.

[BeemerlessBob]

The fact that you made this post tells me you know you have a problem with money. This knowledge will see you through and I think you will do fine now.

Also by making this post you have now made yourself accountable to the rest of us. So I expect a follow up post telling us how you wisely spent/invested your money.

[scar04]

Have you tried looking at the book Zombie Economics? It's a different take on the same theory, and is actually a very entertaining read.

[trainman]

At my age (67) I have several friends that grew up poor, all are successful today because of their spending habits. I do think that it's probably harder today to sock a little money away and times are just harder on everyone. You said at times you have extra money, that is the time to save it, I know it's hard to do because there are so many tempting thing to buy out there, but yes you can save some of it. Someone said, the longest trip starts with the first step, that's true in just about everything in life today, you have to take that first step. I think that since you can publicly state your possession in life, you can do it, it's those who can't, can't. Good Luck,


John

[SL350]

Originally Posted by BeemerBob

The fact that you made this post tells me you know you have a problem with money. This knowledge will see you through and I think you will do fine now.

This.

[kurt]

Originally Posted by BeemerBob

Also by making this post you have now made yourself accountable to the rest of us. So I expect a follow up post telling us how you wisely spent/invested your money.

I have a similar support system. Many of you have met my wife.

[wanabeguru]

Prayers sent for you to become financially independent along with some wisdom to be used when you must expend funds.

[Tourmeister]

Big purchases are not our problem. It is the nickel and dime effect, thinking that we are spending little, when in reality all those little expenses add up! Actually keeping track of all them helps you to see how they add up and makes it easier to resist them.

The earmarking/setting aside approach works well to make sure the necessary things are paid for BEFORE anything else. Amounts put aside for savings each month fall into this category for us. Getting that done puts you ahead of a LOT of people it seems.

As for saving in general... Well, in our current financial environment, trying to save in a bank account is hard to do. Inflation/taxes/fees will eat up any gain you might get if you happen to have an interest bearing account. At this point, you'd be just as well off to literally stuff money in a mattress (although I prefer a home safe ). I try to keep at least three months of bills worth of cash on hand. I did not get there overnight though... Also, silver is only around $32/oz right now. Buying at least 3-5 oz/month is a good way to save and it puts the savings in a form that you can't just run down to the store and spend. IF the banks fail/close for an extended period without warning, you won't be one of the many people with NO ACCESS to your money. You'll at least have your cash stash and worst case can use the silver as money with anyone willing to take it. Given what is going on right now, I am a BIG fan of what you have in hand versus what you THINK you will have access to when you need it, which includes money you may have sitting in an account somewhere.

Lastly, and this will sound counter intuitive, I try to help folks where I can. When I see someone that has a financial need that I might be able to meet, I do it. I don't advertise it and I try very hard to keep it anonymous. It might be something small or maybe big (relatively speaking) depending on my situation at the time. I even do it when things are "tight". I find this REALLY helps me keep things in perspective.

[TwoSmokeDS]

Buying stuff makes you feel good. It might be that you feel bad about something, and spending lots of money takes your mind off of it. Or maybe you are just so bored that you need that high. It must be a gene inherited from our cavemen anchestors who hunted and gathered stuff to survive.

[BeemerlessBob]

Originally Posted by TwoSmokeDS

Buying stuff makes you feel good. It might be that you feel bad about something, and spending lots of money takes your mind off of it. Or maybe you are just so bored that you need that high. It must be a gene inherited from our cavemen anchestors who hunted and gathered stuff to survive.

Buying motorcycles makes me feel good. That is until my wife finds out and then she makes sure I feel bad.

[budzrex]

Trade or Pay cash for all toys is my policy. Keeps family harmony and I dont think I
should ever go into debt for a toy

Keeps me off of new bikes most of the time though.

[prhaussies]

I have always heard that you should treat savings like it is a monthly bill, also called paying yourself first. Pick an amount that won't lead to hardship, that way it is easier to stick with the program. Some funds will help you by doing an auto withdraw from your bank account.
From your picture, I would guess your retirement age is a ways off. If you were to set up a Roth IRA, pay into it every month, you could have a very nice "Nest Egg" when old fartdom settles in.
Clark Howard has a lot of good sugestions, listen on the radio or check his web site. I know he has recommended the Vanguard Star fund as it has a low starting amount and is very diversified. Good luck! RH

[vc_slim]

The best rate of return these days is to be debt free. Using a credit card wisely means paying it off every month. Rebate programs are a nice bonus.

Learn good spending habits now and they'll definitely pay off over the long run.

[shanedman]

Originally Posted by kurt

I have two credit unions for my direct deposits. One is for all my bills and savings. All of the bills either auto pay on specific dates or in the case of the variable amount, I pay them manually via online banking. There is no check book and the debit card (used for repairs, etc.) is in the lock box at the branch closest to my house. The other account gets my disposable income and the debit card resides in my wallet. The important stuff always gets paid and access to the money earmarked for recurring expenses is very hard to access.

Very disciplined approach. One of my flaws in this area is the lack of self discipline, which is a big thing i am trying to work on.
I recently went from having ONE bank, to now having 3 banks. 1 is my main, used for bills etc, and is easy access, short drive down the road.
2nd was setup as a savings. Found myself dipping into this a couple times, but am trying to get my girlfriend to help slap my wrist on this.
3rd bank i just setup this past week, and is an online bank, Ally bank, perhaps you all have heard of it. Seems like a good deal, and i dont have a devit card to access it. only access is to do a wire transfer which takes a total of about 5 days to get the money due to each bank having hold/processing times.

Originally Posted by El Fenix

The Richest Man in Babylon. Its a classic. Read it, and live it.

Ill look it up. Im not a big reader, but perhaps i can find it and put it on my toilet back. lol

Originally Posted by WoodButcher

Glad to pray for you Dusty. That's an area all of us could probably use some help with. I try and keep things earmarked. So like when I sold my Transalp, the money was planned for the next bike, but it was cash. So I put it in an envelope and tucked it away for the next bike. That way it never made it to my wallet or the bank account to get spent on something else. Granted that isn't the solution for long term planning, but it is kind of like what Kurt does. Compartmentalize your money. Day to day living money goes in one pot, fun money in another. And if you are saving for the future, that goes into another pot that is harder to get to.

Me havign cash on hand, readily available, stored in an envelope in my house is DANGEROUS for me. as bad as in my pocket.

Originally Posted by BeemerBob

The fact that you made this post tells me you know you have a problem with money. This knowledge will see you through and I think you will do fine now.

Also by making this post you have now made yourself accountable to the rest of us. So I expect a follow up post telling us how you wisely spent/invested your money.

KNOWING i have the problem is nothign new. I have always known that i sucked with money, just a matter of discipline, and possibly as some fo you mentioned, compartmentalizing my money.

Originally Posted by scar04

Have you tried looking at the book Zombie Economics? It's a different take on the same theory, and is actually a very entertaining read.

I will check into it, even though as i said, i am not a big reader. May be a good "investment" for me to check out these books you guys mention.

Originally Posted by trainman

At my age (67) I have several friends that grew up poor, all are successful today because of their spending habits. I do think that it's probably harder today to sock a little money away and times are just harder on everyone. You said at times you have extra money, that is the time to save it, I know it's hard to do because there are so many tempting thing to buy out there, but yes you can save some of it. Someone said, the longest trip starts with the first step, that's true in just about everything in life today, you have to take that first step. I think that since you can publicly state your possession in life, you can do it, it's those who can't, can't. Good Luck,


John

I get quarterly bonuses at work, hence the extra funds at times. I have always heard that you should "pay yourself first", but it seems that i almost always have some expenditure come up right at bonus time, (a "need", not a "want") that takes my ability to pay myself out of the picture. Example: 2 quarters ago, i had to drop $1500 into my vehicle because it was in the shop.

Originally Posted by TwoSmokeDS

Buying stuff makes you feel good. It might be that you feel bad about something, and spending lots of money takes your mind off of it. Or maybe you are just so bored that you need that high. It must be a gene inherited from our cavemen anchestors who hunted and gathered stuff to survive.

Other than financial issues, i am pretty darned stable in my life. Nothign really to be feelign bad about. I have a nice place, great girlfriend, great job, good friends, etc. Perhaps you have something there with the boredom idea.

Originally Posted by Tourmeister

Big purchases are not our problem. It is the nickel and dime effect, thinking that we are spending little, when in reality all those little expenses add up! Actually keeping track of all them helps you to see how they add up and makes it easier to resist them.

The earmarking/setting aside approach works well to make sure the necessary things are paid for BEFORE anything else. Amounts put aside for savings each month fall into this category for us. Getting that done puts you ahead of a LOT of people it seems.

As for saving in general... Well, in our current financial environment, trying to save in a bank account is hard to do. Inflation/taxes/fees will eat up any gain you might get if you happen to have an interest bearing account. At this point, you'd be just as well off to literally stuff money in a mattress (although I prefer a home safe ). I try to keep at least three months of bills worth of cash on hand. I did not get there overnight though... Also, silver is only around $32/oz right now. Buying at least 3-5 oz/month is a good way to save and it puts the savings in a form that you can't just run down to the store and spend. IF the banks fail/close for an extended period without warning, you won't be one of the many people with NO ACCESS to your money. You'll at least have your cash stash and worst case can use the silver as money with anyone willing to take it. Given what is going on right now, I am a BIG fan of what you have in hand versus what you THINK you will have access to when you need it, which includes money you may have sitting in an account somewhere.

Lastly, and this will sound counter intuitive, I try to help folks where I can. When I see someone that has a financial need that I might be able to meet, I do it. I don't advertise it and I try very hard to keep it anonymous. It might be something small or maybe big (relatively speaking) depending on my situation at the time. I even do it when things are "tight". I find this REALLY helps me keep things in perspective.

The having 3+ months of bills is a great idea IMHO. i have yet to do that, but i do have the goal of eventually having about 6 months of bills saved up.

This upcoming year, as long as i am wise with my money should be a good year for me financially. car will be paid off, giving me $300/month back in my pocket. Getting rid of another $300/month debt i was paying for this year. Plus i am hopign for a Raise at work, but thats not guaranteed.. so we'll see.

[shanedman]

Originally Posted by prhaussies

I have always heard that you should treat savings like it is a monthly bill, also called paying yourself first. Pick an amount that won't lead to hardship, that way it is easier to stick with the program. Some funds will help you by doing an auto withdraw from your bank account.
From your picture, I would guess your retirement age is a ways off. If you were to set up a Roth IRA, pay into it every month, you could have a very nice "Nest Egg" when old fartdom settles in.
Clark Howard has a lot of good sugestions, listen on the radio or check his web site. I know he has recommended the Vanguard Star fund as it has a low starting amount and is very diversified. Good luck! RH

Good point, but that is ONE thing i do have going for me. My employer has a 401k that i am invested in. both reg and roth. So far is making me an almost constant 10% quarterly. Plus my employer matches a certain % of what i put in, so you darn tootin i took advantage of that. It currently has the most amount of $$$ i have ever "saved" in my life.