Financial Advice

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This thread is stemming from my last one “Need some Advice”…new topic, new thread.

Anyway, if you could place your financial tips, advice, stories anything, that would be great. DH and I are desperatly trying to pay off our loans and save money for a downpayment because we live in a hell hole (no really…we might as well live 10 stories UNDERGROUND:bigyikes: ).

Anyway, we’re pretty new to this saving/frugal business so any advice is totally and completely welcome…

Thanks in advance…
 
My advice is never to pay anyone to take care of your money.
 
1ke, I’ve looked at the Dave Ramsey site!! I loved it, but when I tried to sign up, it wouldn’t let me because I’m in Canada…it didn’t give the option of selecting your “postal code”. Do you know anyway around this? Thanks!!
 
If you do use credit cards on occasion, pay off the balance in full each month.
 
Pay your savings first–everyone recommends %10, but we’ve never been able to do a full 10%

By the way, we rented until I was 27 and my husband was 29. Even then, our down payment was a gift from his parents–they had inherited some money.

Do you have rent-to-own in Canada? I think that is a nice way to go for young couples.
 
My wife and I saved enough for a large downpayment on our house, we did so by saving my income and living off her income. It was radical, but it worked. We did a number of crazy things:
  1. Went to the library for video’s
  2. Used the internet at the library
  3. Didn’t have cable.
  4. No cell phones.
  5. Shopped at the goodwill store.
  6. Used coupons like crazy
  7. Stocked up when spaggetti was 25 cents per box.
  8. Limited the number of gagets we owned.
  9. Waited for sales when we bought big ticket items.
 
Two recent books:

“The Automatic Millionaire” by David Bach

amazon.com/gp/product/0767914104/qid=1142707227/sr=2-1/ref=pd_bbs_b_2_1/103-8133755-7495805?s=books&v=glance&n=283155

[always pay yourself first: first thing each payday is make a 10% bank deposit; never limit yourself to whatever is left over when all the bills are paid.]

“Smart and Simple Financial Strategies for Busy People” by Jane Bryant Quinn.

amazon.com/gp/product/0743269942/qid=1142707317/sr=2-1/ref=pd_bbs_b_2_1/103-8133755-7495805?s=books&v=glance&n=283155

[there are easy ways to manage your money without taking up all your time and getting discouraged; she encourages “rebalancing” your investments.]

And an older book: “How to Make A Million Dollars…” by Robert Lichello.

amazon.com/gp/product/0451204417/qid=1142707367/sr=2-1/ref=pd_bbs_b_2_1/103-8133755-7495805?s=books&v=glance&n=283155

My book review is under the name: “reader”, February 19, 2001

[The AIM system is a totally automatic system for managing investments. The AIM system is very similar to the kind of “rebalancing” recommended by Quinn. Visit www.aim-users.com ]

To save money get these books from the library.
 
JMJ Theresa:
Pay your savings first–everyone recommends %10, but we’ve never been able to do a full 10%

By the way, we rented until I was 27 and my husband was 29. Even then, our down payment was a gift from his parents–they had inherited some money.

Do you have rent-to-own in Canada? I think that is a nice way to go for young couples.
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Savings is second. Tithe should be first. God gets the first fruits.
 
My husband and I, newlyweds, are going through the same thing: organize finances, pay off debts, save cash. It’s a frustrating time, but we’ve got to buckle down!

Dave Ramsey’s website doesn’t offer many tips because he makes money off his program, but Clark Howard’s website offers much. Also, listen to their radio programs if you get them. Dave Ramsey has a great phrase: “Are you willing to live now like nobody else so that you can live later like nobody else?” That means, are you willing to live now like nobody else (don’t buy what you can’t pay cash for, pay off debt) so that in a few decades, you can live like nobody else (debt free, comfortable, truly owning your material possessions).
  1. No more eating out. We have found a couple of super cheap restaurants where we get to eat out twice a month. Example: a nearby pizza joint sells a one-topping large for $5.
  2. Slash your grocery bill. Buy all generic. Buy at a warehouse store (e.g., Sam’s Club, Costco) if you have the storage space. If you do not have the storage space, you could share a membership with a friend. A $45 yearly membership will save you at least that much per month in groceries.
  3. Buy a FoodSaver or similar product so that you can take advantage of buying bulk. You can buy the super low priced meat at a warehouse store, then FoodSave, freeze it, and avoid going back to the grocery store.
  4. Avoid quick trips to the grocery store because every time you go, you’ll see something you “have” to have ("Oh, Wheat Thins, I really like those, I’ll get a box.). Make a list, go once per week or less, and buy only what is on the list. Clip coupons. Base your meals on what meat is discounted, not what recipes you feel like making.
  5. When the seasons at all permit it, turn off your heater and air conditioning. Wear sweaters and be chilly or wear skimpy clothes (indoors!), use oscillating fans, and be warm. Especially since you don’t yet have kids, you two can suffer discomfort and live to tell about it. 😉
  6. I seem to recall you already get by on one car? My hubby and I are currently selling one car to get rid of the payment and we are going to try to get by with one car for a while.
  7. Cheap entertainment! Play cards, games, puzzles; watch TV (cheaper than going to movies, or cancel cable altogether); rent movies instead of going to movies (Netflix is $16/month for unlimited rentals); take walks; read books; go to museums on their once-monthly free days. Volunteer at a soup kitchen: not only will you pass an evening with your hubby for free (“entertainment”), but you’ll experience a serious dose of feeling grateful for whatever you do have.
  8. Remove all credit cards from your wallets and carry only cash and debit cards.
  9. Never make late payments. Late fees are money down the toilet.
  10. Call all your credit cards on which you owe and ask if they are willing to lower your interest rates. Very often, they will do so. We just lowered our rate from 12% to 4.5% fixed on a card carying tens of thousands of dollars just by asking nicely!
  11. Consider making two half-payments per month instead of one full payment. Paying $10 twice instead of $20 once actually does save on accumulating interest.
  12. Buy clothing at thrift and consignment stores and places like Wal-Mart (just bought some really cute tee-shirts for $5 apiece). Buy only simple, classic clothing so that you will not feel pressured each year to buy new clothing because your last year’s fads are out of style.
Something I remind myself of often when I am feeling down or crying is that it is better to do the right thing than let embarrassment or shame cause me to do the wrong thing (e.g., try to keep up with the neighbors, so overspend again). Sometimes it feels humiliating to live in an affluent neighborhood as we do and only be able to buy one $5 pizza every two weeks, because I feel like a fraud. But we got ourselves into this mess and now–as a team–we are going to get ourselves out of it! You keep up the good work. 👍
 
We didn’t have any credit cards for years… got cash advances at work for business travel. The company had a deal with a travel agency, so all the tickets were taken care of.

It wasn’t until years later when I changed companies did I get a credit card (and only used it for business). Paying by check and by cash was inconvenient, but it saved us from a lot of impulse buying. We had to REALLY want or need something for us to buy it.

Minimal consumer electronics. Had a stereo, but went without a TV until I got married.

Did a lot of reading, usually from the library (I travelled so much, and moved around so much, that buying books was impractical… had some, but it wasn’t until we bought a (tiny) house that we had room for books.)

I was accused of having the first dollar I ever earned; that wasn’t true. But by economizing on everyday stuff (el cheapo cars that we kept for 20+ years, changing the oil myself, etc), we were able to afford a few really super things such as a pilot’s license, grad school, return to college, art club participation, musical instruments, having a family, etc. Travelled so much for business, that I was “cured” of wanting to travel for fun.

Had to fill out a financial questionnaire and the guy didn’t believe me when I said we had NO debt.
 
I think that, safe housing aside, you have to make a decision that generally, stuff clogs your soul and your life. You have to rethink your money, your time, your energy, your priorities. A lot of people postpone spending because they want to spend more in the future. What you should aim for is a detachment from material goods. If you feel that you are living a deprived life, if the cup is half full because you can’t afford to fill it all the way, you will fight feelings of self-pity and bitterness. If you feel that you are doing God’s will, then you will have His grace to make it through each day with peace.

The first thing to do is to ask God to form your heart and mind according to His will for your life in a material world. What does He want you to own? Where does he want you to live? You want to be a success in God’s eyes, not the world’s eyes, so pray hard to see the truth. I was surprised on your other thread when you mentioned that your DH owns 13 guns/rifles. Why does he need thirteen? Can’t you sell a few of those and use that money to move into a better living situation?

Tithing is also important. If you feel that you cannot tithe a full 10%, then perhaps you can find other ways to give back to the Lord. Pray about this and ask your priest for guidance in this area.

I’ve read the book “Your Money Or Your Life” and “Rich Dad Poor Dad” and these books try to get you to understand that the doo-dads we fill our lives with are generally a waste of money. Your Money or Your Life shows you that you trade your limited time and energy for the stuff you own, and asks that you make certain that your life is worth it. Now, I’m not saying that a college education, orthodontics, music lessons or a safe neighborhood or a pretty new crib for a precious new baby are indulgent, but these books help me realign my own thinking on this matter. Thinking for the long run is crucial to accumulating money.

In fact, I would appreciate a good Catholic book on finances if anyone can recommend something that goes beyond “cut the credit cards” and “use coupons” because I think that those are baby steps. The whole picture is much larger and it includes analyzing where your income comes from and if you are working in the best way to earn money that can help you achieve financial independence, which we all must strive for because at some point, we won’t be able to work and will have to rely on what we saved during the more productive years of our lives.

Sarcophagus, I would strongly encourage you or your DH to get another job, perhaps working in retail or in the service industry after your regular job hours. You sound like you need a greater amount than you’ll ever get trying to squeeze more mileage out of the few dollars you have. I would also urge you to slow down your student loan repayment if the interest rate is fairly low. You might do better to save money for a down payment, which would ultimately put you into a house, then pay off those loans more aggressively. Perhaps you should talk to a mortgage lender about two or three different financial scenarios where the impact of your outstanding student loans is weighed against a heftier downpayment, which means you can move into a house that is in a more stable neighborhood as far away from the criminal elements as possible. Also, watch the housing market even though you aren’t buying right now. Try to get an understanding of neighborhoods, interest rates and housing prices, so that when you see a deal you can move quickly on it. God will take care of you.
 
Stop using credit cards!

Nearly everyone I know that has financial problems can trace them back to overuse of credit cards. It’s good to have one of course, it helps build your credit rating and is necessary for things like airline reservations. For other stuff, pay cash, check, or with a debit card. I think DH and I have only charged $10 on a credit card since the new year. It makes us spend our money more wisely, as we can only spend what we have.

Also, we’ve started keeping track of everything that we spend in a month, so we can figure out where the money goes. It helps us budget what is needed to pay bills and helps us identify areas where we could do better.

The last thing: at the beginning of the month, we each get “mad money”, like an allowance for grown-ups (this is worked into the monthly budget). This is our cash to save or spend on whatever. I saved some up for a salon haircut, and DH saved his up for a while and bought a new computer monitor. This keeps us from feeling like we’re being too restrictive.
PS- Someone mentioned avoiding quick trips to the grocery store. Actually, I’ve found that if I go two or three times per week, we waste less money because I’m buying fresher food and will be less likely to have it spoil before we can use it. I do however make a list before I go and am **very **strict about sticking to it. That helps a lot. But if you’re an impulse buyer, you’re probably better off going once a week to give yourself fewer opportunities.
 
Find a non-profit Credit Counselling Agency. Do not go to anyone who wants you to pay them…big time scam!!!

Not sure what province you live in, but here in Alberta we have one called Credit Counselling services of Alberta, or something. They can give you basic advice, make deals with your creditors, get you on a workable budget etc. It’s definitely worth a try.
Now, for personal tips. What works best for us is the “envelope” system. I can’t believe nobody has mentioned this yet. It’s great! It can take a few months to tweak, but once you have a good budget going it really helps keep the finances on track.
**What we do is have a budget for each pay day (twice a month). All expenses are accounted for. We have seperate envelopes for **
1) Groceries (includes any eating out)
2) Misc. household (cleaners, personal care products etc)
3) Car gas
4)Pet food/needs
5)Entertainment (renting movies etc)
6)my personal money
7)hubby’s personal money
Up until very recently we could not afford to give ourselves any spending money. But, if you can work it in from the beginning (ours is $20 each) it will really help you not get to depressed about being broke.
Anyways, put the allotted amount in the envelope and only spend what’s there. It won’t take you long to get it to work for you. In the beginning you may run out of grocery money a week before payday due to poor choices, but then you make do with what’s in the house and are less likely to overspend the next time, lol.
We do not make enough money on one income to put any money aside right now for savings, or a clothing budget or anything else. If unexpected expenses come up we buy it with our Line of Credit (much lower interest that a credit card) and pay it off slowly. It’s not the best thing to do, but it works for us right now. Especially with maternity clothes, baby items etc that aren’t “regular” expenses.
I see i am babbling on and on, lol, so I will stop now. Good luck.
Malia
 
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SeekerJen:
The last thing: at the beginning of the month, we each get “mad money”, like an allowance for grown-ups (this is worked into the monthly budget). This is our cash to save or spend on whatever. I saved some up for a salon haircut, and DH saved his up for a while and bought a new computer monitor. This keeps us from feeling like we’re being too restrictive.

Exactly!!! DH spends his as soon as he gets it (video games etc) while I am a saver. I too just saved up for a salon hair color (what a treat!) Since it is ours to do with as we please there is no arguing over purchases either.

PS- Someone mentioned avoiding quick trips to the grocery store. Actually, I’ve found that if I go two or three times per week, we waste less money because I’m buying fresher food and will be less likely to have it spoil before we can use it. I do however make a list before I go and am **very **strict about sticking to it.

That works best for us as well.🙂 Although DH sometimes feels deprived when the food budget doesn’t allow for Reese Puffs cereal:rolleyes: , lol.

**Malia **
Click to expand...
 
the Catholic Exchange website has a Catholic financial planning advisor who has a book and kit I have given to all 3 of my daughters.

when we got married we were still in college and both had student loans. also had 3 kids by the time we both graduated. made last student loan payment the month oldest daughter started college.
we had $26 in our pockets the day after our honeymoon (spent stuck in a snowstorm on the Ohio turnpike, muy romantico). we limped home in that 12 yr old car, which died in front of our apartment, and was towed in the morning. My brother-in-law had loaned it to us because he was in the navy going on tour, and it actually got repossessed. Thanks, bro. that’s how we first learned about credit.

get rid of credit cards. put one in a locked place for emergencies

live on one income

live cheap. we lived in an a series of east side Cleveland neighborhood (did you ever see the movie Welcome to Collinwood with william Macy and a band of bumbling burglars? that’s where we lived for 17 years). even when we started making better money we stayed there and saved by putting everything into hubby’s co. stock plan. of course that was after he left teaching (no stock plan). we lucked out when his company transferred him. we had to cash in the stock to buy a new house, since we sold the old one at a loss. a year later his company got merged/bought out and stock dropped over 80 points. that house we sold after 3 years at a 33% profit, moved again, lucked out on a house, which we also sold at a profit. at that point kids all moved out to college, marriage etc so we bought a mobile. our kids are still nostalgic about “the old neighborhood”. we payed a huge tax bite that year, the next year IRS changed to rules and if we had waited a year we would have saved thousands. that’s how we learned about mortgages and taxes.

keep good records, if you spend any money on prof financial services pay it for a good tax guy. pay your taxes, don’t ever play games with the IRS. they have no sense of humor and will not cut you any slack

don’t let the IRS keep your money, a big refund means you just lost out on interest you could have made investing. IRS doesn’t pay interest on refunds. recalculate your withholding each year so you come out almost even.

pay yourself first. have savings taken out at work. max out your 401k and get all the company matching contributions. have your paycheck direct deposited if possible and money put right into savings or mutual fund.

if you have a health care savings account use it. the best way to save money on health care is to take care of your health today so you don’t end up a mess in middle age. eat right, keep a normal weight, get rid of destructive habits and risk-taking behaviors.

pay bills online or by direct draft to avoid late charges.

what kills budgets is late charges and finance charges.

DO THE MATH - if a deal sounds too good to be true, it is a lie. a low monthly payment or interest rate that sounds like a no-brainer has all kinds of hidden costs. figure everything out both ways so you find out the total cost of the loan over the life of the loan.

never borrow money to pay for something that will be long gone by the time you pay it off - like restaurant meals on a credit card.

An education will last you for life, but don’t waste it. don’t spend money on college if you don’t know why you are there. don’t goof off. manage your time well. study, commit, don’t drop courses, make sure you are taking the courses required for your major and fulfilling graduation requirements. get academic advising so you don’t end up having to pay for another semester or another year. If 18 credits cost the same as 12, take 18. do your homework-- do not pay for failing grades.

tithe - give to God of your first fruits. don’t every consider yourself too poor to give. always have something to give others. make hospitality a priority, even if it is only a cool glass of water and a comfortable place to sit. every guest in your home is Jesus Christ.

be poor in spirit, downsize what you think you need. learn the difference between wants and needs. teach this to your children. don’t spend money on that which does not satisfy. don’t pay for junk food and garbage drink that supplies no nutrition and depletes health.

take care of what you buy, maintain appliances, car, house properly, you will save thousands of dollars.

never buy a new car, it is used the minute you drive it off the lot.
 
The last thing: at the beginning of the month, we each get “mad money”, like an allowance for grown-ups (this is worked into the monthly budget). This is our cash to save or spend on whatever. I saved some up for a salon haircut, and DH saved his up for a while and bought a new computer monitor. This keeps us from feeling like we’re being too restrictive.
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I am so glad to hear your advice. My husband and I save alot, and we work hard to put money aside, but I never feel like I have “my own money”. My husband manages the finances. When I ask for clothes or other items I want or need, he tells me I don’t need them. We end up arguing about it when I do actually buy these things on limited occassions. Today I mentioned that we each have an allowance that we do whatever we want with-- even if it is $60/month or whatever amount we decide on. Then, he can’t critisize me for buying sneakers because I have saved for it under my allowance and it is what I want with my money. It is really turning into a source of frustation for me to never feel like I have my own cash! And I DO understand the difference between needs and wants, but once in a while I do feel like I entitled to buy what I want or add to my work clothes (because I am starting to feel like I wear the same shirt every week) and not have to ask him for everything like he is my dad. Does anyone else have this issue and how did you resolve it?
 
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