imaudigger, post: 330739, member: 7286 wrote: Pay yourself first. That is what I have been told.
If only I could get my self to send my self a bill every month. Hoping mint dot com will help.
Here is my take on it...
I think the basic idea is to take some money off the top, what is left is money that can be given to others (bills).
Most people typically do the exact opposite.
Many of us tend to live at or near our financial ability. You start making more money, yet your still always short on cash. You make less and you still get by.
You need to take advantage of this ability to self adjust to a changing income by regularly paying yourself first.
Lets say you don't have a savings plan. You purchased a vehicle on credit with say for example a $400 dollar monthly payment. You would adjust your spending accordingly and would get by with very little left over at the end of the month. This could go on for years and you would still be getting by. This is paying yourself last (if at all). After the loan was paid, you would again adjust your spending habits and would still have very little left over at the end of the month.
Now lets say you go into your bank and set up a small automatic monthly payment to a saving account...you would be paying yourself first and you would quickly adjust to the remainder of your available income. Set it and forget it.
Once the vehicle is paid off, up the monthly payment to yourself.
The money saved does not have to sit untouched. Use it for whatever you need to, just pay yourself first so it's there when you need it. More successful people take that money and put it into other forms that actually grow (in contrast to a savings account with nearly zero % interest), but a savings is better than nothing at all.
It will make working a little more enjoyable when YOU get some benefit rather than it going to everyone else.
I think being good with money is similar to being a father or husband. You need to surround yourself with exceptionally good examples (successful people). It will rub off on you.
Realistically, you are probably feeling the effects of inflation. I know I am.
imaudigger, post: 330790, member: 7286 wrote: Here is my take on it...
I think the basic idea is to take some money off the top, what is left is money that can be given to others (bills).
Most people typically do the exact opposite.Many of us tend to live at or near our financial ability. You start making more money, yet your still always short on cash. You make less and you still get by.
You need to take advantage of this ability to self adjust to a changing income by regularly paying yourself first.
Lets say you don't have a savings plan. You purchased a vehicle on credit with say for example a $400 dollar monthly payment. You would adjust your spending accordingly and would get by with very little left over at the end of the month. This could go on for years and you would still be getting by. This is paying yourself last (if at all). After the loan was paid, you would again adjust your spending habits and would still have very little left over at the end of the month.
Now lets say you go into your bank and set up a small automatic monthly payment to a saving account...you would be paying yourself first and you would quickly adjust to the remainder of your available income. Set it and forget it.
Once the vehicle is paid off, up the monthly payment to yourself.The money saved does not have to sit untouched. Use it for whatever you need to, just pay yourself first so it's there when you need it. More successful people take that money and put it into other forms that actually grow (in contrast to a savings account with nearly zero % interest), but a savings is better than nothing at all.
It will make working a little more enjoyable when YOU get some benefit rather than it going to everyone else.I think being good with money is similar to being a father or husband. You need to surround yourself with exceptionally good examples (successful people). It will rub off on you.
Realistically, you are probably feeling the effects of inflation. I know I am.
A~MEN A~MEN A~MEN.... thank you so much! Exactly what I needed. I will try to do this better...
James Fleming, post: 330564, member: 136 wrote:
You would think cutting your income in half would have the opposite affect. Reality is sometimes quite different.
imaudigger, post: 330790, member: 7286 wrote: Here is my take on it...
I think the basic idea is to take some money off the top, what is left is money that can be given to others (bills).
I take 10% off everything I get straight into long term savings - that's my retirement fund.
I just wish I'd done it right from when I started earning with a paper round when I was at school.
I've got my kids doing it too 🙂
Jim that's good! See - the kids are surrounded by a good example and it rubbed off on them.
I'd advise the bulk of the savings should be located somewhere invisible so it cannot be touched by...well lets just say "others".
Long term, you never know what the future will bring. Sam may look at your savings and say you don't qualify to receive your social security payment. Even worse, there may be a day when you are punished because you "Have" while there are so many that "Have Not".
EDIT: You mattress stuffers out there, keep a record of where you obtained the money. If you cannot prove it's yours, it can be confiscated legally!
I believe $10,000 is the limit without documentation. Also if you are wanting to move money from a long term savings account elsewhere (say to buy gold), beware of removing amounts near but below $10,000. This is considered illegal and your entire savings account may be confiscated by the Feds. Weird but true.
Remember it wasn't that long ago that it was deemed illegal for a US Citizen to even possess gold.
Bizarre things can happen.
The more liquid an asset is, the easier it is to disappear. Tie up money in ways that are more challenging to convert back to cash.
Holy Cow, post: 330809, member: 50 wrote: The more liquid an asset is, the easier it is to disappear. Tie up money in ways that are more challenging to convert back to cash.
Yes. Like my savings account, rather than my checking account(s) that have debit cards. Roger that good tip.
imaudigger, post: 330790, member: 7286 wrote: Here is my take on it...
I think the basic idea is to take some money off the top, what is left is money that can be given to others (bills).
Most people typically do the exact opposite.....
https://en.wikipedia.org/wiki/The_Richest_Man_in_Babylon_(book)&apos ;">The Richest Man in Babylon
An old classic. Available as a free pdf these days, or for a nominal amount at your local B&N. If you haven't already it is worth the read.
Sounds about right...
"I found the road to wealth," he said, "When I decided that a part of all I earned was mine to keep. And so will you."
Norman Oklahoma, post: 331160, member: 9981 wrote: https://en.wikipedia.org/wiki/The_Richest_Man_in_Babylon_(book)&apos ;">The Richest Man in Babylon
An old classic. Available as a free pdf these days, or for a nominal amount at your local B&N. If you haven't already it is worth the read.
Thank you Mark very much, this book is exactly what I needed.
I am now trying to put away the FIRST 10 to 20% of every check that comes in, right off the top.
Norman Oklahoma, post: 331160, member: 9981 wrote: https://en.wikipedia.org/wiki/The_Richest_Man_in_Babylon_(book)&apos ;">The Richest Man in Babylon
An old classic. Available as a free pdf these days, or for a nominal amount at your local B&N. If you haven't already it is worth the read.
Many thanks. I received a copy of this book about three weeks ago. Awesome read. I get excited when I think about the fact that a part of what I earn is mine to keep. Jingle jangle sounds good to the ears.
VA LS 2867, post: 330608, member: 1444 wrote: The debit card has the same protections as a credit card.
My understanding is that if you don't report debit card fraud within 2 business days, federal law allows the bank to decline to restore up to $500 of the fraudulent amount. Wait more than 60 days and the bank doesn't have to make good on any of it. With a credit card, the most you're out is $50 under federal law.
We use mvelopes. It's an online budget tool by crown financial ministries. Works well for us. I've also heard positive stuff about Every dollar budget -a Dave Ramsey tool/app that is supposed to have a free and subscription side.
jim.cox, post: 330796, member: 93 wrote: I take 10% off everything I get straight into long term savings - that's my retirement fund.
I just wish I'd done it right from when I started earning with a paper round when I was at school.
I've got my kids doing it too 🙂
I'm saving 7%. I like the sounds of 10 percent though.
When you want to buy something, ask yourself, "Can I wait until next Wednesday to buy that?" If you can wait, maybe you don't need it. Maybe you'll forget you wanted it by next Wednesday. I've cut my spending to almost zero and still run out of money. You have to resign yourself to being "Joe Pinchpenny."
mattharnett, post: 354859, member: 6458 wrote: I'm saving 7%. I like the sounds of 10 percent though.
When you want to buy something, ask yourself, "Can I wait until next Wednesday to buy that?" If you can wait, maybe you don't need it. Maybe you'll forget you wanted it by next Wednesday. I've cut my spending to almost zero and still run out of money. You have to resign yourself to being "Joe Pinchpenny."
10% MIGHT cover your medical expenses... 15% might allow you to eat also...
Your health has a TREMENDOUS effect when your in your "Golden Years". I have a friend who is almost exactly the same age as I am, and her medical costs are 9 times higher than mine. She has been investigating Medicare and says she as not at all thrilled about what she is discovering...
Stay healthy!!!
Jim in AZ, post: 354871, member: 249 wrote: 10% MIGHT cover your medical expenses... 15% might allow you to eat also...
7% put away when you are in your 20's will go further that 70% put away in your 60's.
Norman Oklahoma, post: 331160, member: 9981 wrote: https://en.wikipedia.org/wiki/The_Richest_Man_in_Babylon_(book)&apos ;">The Richest Man in Babylon
An old classic. Available as a free pdf these days, or for a nominal amount at your local B&N. If you haven't already it is worth the read.
In 1982 I moved back to Ft.Worth to work for Metropolitan Aerial Surveys on the Richland-Chambers Creek Reservoir job. Around Christmas time, the other employees that had been there awhile started talking about the annual Christmas party and bonuses, both of which were new concepts to me, so I was kind of excited. During the course of the conversation, one of the old hands was laughing and asking the others if they remembered the time that the owner, Bill Gunn had brought in a box full of books called "The Richest Man in Babylon" and passed them out to everyone after the bonuses were handed out. He told them that if they would read the book and take it's teachings and principles to heart, that they would gain much more wealth in their lives than the bonuses that were being passed out. Naturally, most of the survey hands thought the book was about religion (which it isn't) and tossed it aside and never read it. They all had a good laugh remembering the incident. Except one man, he wasn't laughing about it and he allowed them to have a good time on Bill's account. I asked him about the book and he told me that he had read the book and he had adjusted his way of thinking and spending and was beginning to see quite a bit of wealth being built up in his savings account. He said the savings account being built up was great, but the best thing about reading the book was in the way that it changed his outlook on saving and spending.
So I bought a copy of the book and read it in a night or two and was impressed with the simplicity of what it was telling me. There are no secret formulas given for saving money or outlandish plans for getting rich, only common sense approaches to accumulating wealth regardless of how much or how little you earn. From that point on, I begin to accumulate money in my savings account and was not tempted to spend it. Several years later, I had my wife read the book and although she didn't think much of it, she agreed to my approach on saving and spending and 3 years later we had enough money for a down payment on a house. Once we spent the money and it was gone, it was amazing how fast it built back up in savings because we had gotten into the habit of wise spending and saving.
The only bad thing about the book, was that I had to constantly be buying another copy because the copy I loaned out to my friends never seemed to get returned. When my sons got old enough, I gave them both copies of their own and told them the same thing - that if you read the book and take the principles that it teaches to heart, you will be a much richer person than if I just give you money. Time will tell if they learned anything from the book, but I think I can already see the evidence in both of them that they did.
Budgets work wonders. For example I give the crews each $100 cash a week for gasoline and miscellaneous expenses. They turn in receipts and change.
And if they're realistic they not only work, sometimes there is surplus cash. What you do with the surplus can make a world of difference in your bottom line.
Cash is a perishable commodity. Invest in a good deep freeze.