HoneyBBQ
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Post by HoneyBBQ on Mar 4, 2015 13:25:09 GMT -5
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Lizard Queen
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Post by Lizard Queen on Mar 4, 2015 13:40:58 GMT -5
Yeah, that pay yourself first saying never made much sense to me. Of course, I come from a place of wanting to keep as much of my money as I can.
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Deleted
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Post by Deleted on Mar 4, 2015 14:18:15 GMT -5
I always took the pay yourself first with a grain of salt, what I think it really means is pay your bills, then save before you spend on entertainment items.
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Deleted
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Post by Deleted on Mar 4, 2015 14:37:33 GMT -5
I always took it as savings is your FIRST priority, even before bills. You need to figure out a way to pay your bills and live off of what is left.
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buystoys
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Post by buystoys on Mar 4, 2015 14:43:04 GMT -5
I always took it as savings is your FIRST priority, even before bills. You need to figure out a way to pay your bills and live off of what is left.
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alinal
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Post by alinal on Mar 4, 2015 14:58:52 GMT -5
I always took the pay yourself first with a grain of salt, what I think it really means is pay your bills, then save before you spend on entertainment items. Nope. You save first. Then buy a lifestyle that fits into what's left. If done right, that's how you avoid lifestyle creep and happily live below your means. I've never had a budget in the traditional sense. My budgeting has always been for my savings, and then my spending has fallen out of that.
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yogiii
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Post by yogiii on Mar 4, 2015 15:02:39 GMT -5
I always took the pay yourself first with a grain of salt, what I think it really means is pay your bills, then save before you spend on entertainment items. Nope. You save first. Then buy a lifestyle that fits into what's left. If done right, that's how you avoid lifestyle creep and happily live below your means. I've never had a budget in the traditional sense. My budgeting has always been for my savings, and then my spending has fallen out of that. I just don't think about it that way. I don't have a traditional budget either, but my costs vary month to month. In my mode I just save as much as I can. I have some savings that comes direct out of my check but if there is extra in my checking account, I don't sit there and think "great, what can I buy?", I think "time to transfer to x savings".
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alinal
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Post by alinal on Mar 4, 2015 15:09:14 GMT -5
Neither do I. If I have extra left over, I transfer to savings, too. Bonus savings!
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Deleted
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Post by Deleted on Mar 4, 2015 15:32:16 GMT -5
Neither do I. If I have extra left over, I transfer to savings, too. Bonus savings! Exactly! What's left over doesn't need to be spent. The idea is to skim enough off the top first to cover your long-term goals (for me it has always been retirement and the kids college savings that is before anything else). After that, bills and necessities (like food!), then if there's anything left, move onto the wants. That can be immediate spending or saving for a bigger want, or whatever.
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Lizard Queen
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Post by Lizard Queen on Mar 4, 2015 15:34:43 GMT -5
I always took the pay yourself first with a grain of salt, what I think it really means is pay your bills, then save before you spend on entertainment items. Nope. You save first. Then buy a lifestyle that fits into what's left. If done right, that's how you avoid lifestyle creep and happily live below your means. I've never had a budget in the traditional sense. My budgeting has always been for my savings, and then my spending has fallen out of that. Oh, okay. That makes more sense to me. My spending style can be best explained by something that happened when I was making around $6/hr or so in my 20's. Suddenly, I realized I had $7000 or $10,000 in my bank account. There was no effort expended to do this--I just didn't spend very much and it added up. (These days, it's not nearly as easy.) Dumbass me mentioned how much I managed to save to BF at the time. Yeah, she tried to borrow $$ from me not long thereafter. In other words, I was so used to living like a poor college student that I didn't even realize I had money that I could spend. I still have certain levels of spending that feels wrong to exceed, and these are based on 1990's prices.
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HoneyBBQ
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Post by HoneyBBQ on Mar 6, 2015 10:58:55 GMT -5
The idea is the money never reaches your bank account so it never tempts you to spend it. You have auto withdraw from your paycheck into retirement, etc. so it's never even there to consider (or spend).
I think many of us do this principle naturally.
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Deleted
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Post by Deleted on Mar 6, 2015 11:44:23 GMT -5
I wholeheartedly disagree with the pay yourself before your bills. What you have already committed needs paid, I equate it to congress running up the tab then pitching a fit to raise the debt ceiling (both parties have used it so not going political). Savings should come before you accrue new debt but after you have paid old.
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Deleted
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Post by Deleted on Mar 6, 2015 12:08:31 GMT -5
The scenario I am thinking of is someone I knew jacked up their 401k contributions and bought a bunch of sports tickets/nights out drinking a year before filing bankruptcy. They cited "pay yourself first" as a rubber stamp to do it. Extreme I know.
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TheHaitian
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Post by TheHaitian on Mar 6, 2015 12:15:53 GMT -5
The scenario I am thinking of is someone I knew jacked up their 401k contributions and bought a bunch of sports tickets/nights out drinking a year before filing bankruptcy. They cited "pay yourself first" as a rubber stamp to do it. Extreme I know. Just because someone took an expression and distorted it to fit their own agenda doesn't mean the expression is wrong or doesn't work I can say "love thyself" means indulging in my house all day long and pleasuring myself. Or be an extreme ass/jerk because I am selfish by "loving thyself" . Paying yourself first always meant to me at least that before you get caught up in bills and spending you put money aside for yourself for tomorrow. So you are paying your "future self" first for when you no longer have a job so somewhat you are providing yourself with an income/paycheck (unemployment, sick, retired, etc.)
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jarrett1
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Post by jarrett1 on Mar 6, 2015 12:21:32 GMT -5
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Deleted
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Post by Deleted on Mar 6, 2015 12:29:21 GMT -5
I wholeheartedly disagree with the pay yourself before your bills. What you have already committed needs paid, I equate it to congress running up the tab then pitching a fit to raise the debt ceiling (both parties have used it so not going political). Savings should come before you accrue new debt but after you have paid old. Once you've already dug yourself in a hole of course you need to work on getting out. The pay yourself first mantra is meant as a BEFORE you go out and start living beyond your means. Of course, I still think you should set aside at minimum suitable retirement money first. If you haven't got enough left over to pay your bills then start selling things or get another job.
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Deleted
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Post by Deleted on Mar 6, 2015 12:37:21 GMT -5
I can say "love thyself" means indulging in my house all day long and pleasuring myself. LOL, post of the day.
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Deleted
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Post by Deleted on Mar 6, 2015 13:03:17 GMT -5
Also, you can continue to pay yourself first even with heavy debt obligations. I have never dropped below 15% contribution to retirement or missed a month of the 529 contributions despite making a $1600/month house payment and having $600/month in childcare expenses on a 35K income. There were some months it REALLY sucked, but you find the motivation when the alternative is losing your house.
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gs11rmb
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Post by gs11rmb on Mar 6, 2015 13:23:45 GMT -5
Also, you can continue to pay yourself first even with heavy debt obligations. I have never dropped below 15% contribution to retirement or missed a month of the 529 contributions despite making a $1600/month house payment and having $600/month in childcare expenses on a 35K income. There were some months it REALLY sucked, but you find the motivation when the alternative is losing your house. How is that even possible? I don't usually dig into numbers but 15% of $35K is $5,250 plus $19,200 for the house and $7,200 for daycare equals $31,650, which leaves only $3,350 for everything else (including taxes). Not trying to be snarky, I just don't get how you manage.
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HoneyBBQ
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Post by HoneyBBQ on Mar 6, 2015 13:24:28 GMT -5
The idea is if you ALWAYS pay yourself first (from day 1 in-utero) your expenses will never be larger than your income (theoretically) because you won't be able to AFFORD the fancy cell phone plan or the expensive car or... etc.
It's a fixing yourself to a pre-set budget with two categories: save and spend. Or course there are always ways to destroy one's budget and screw yourself. But it is a simple way to 'save' if you aren't financially savvy.
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Deleted
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Post by Deleted on Mar 6, 2015 13:28:07 GMT -5
Also, you can continue to pay yourself first even with heavy debt obligations. I have never dropped below 15% contribution to retirement or missed a month of the 529 contributions despite making a $1600/month house payment and having $600/month in childcare expenses on a 35K income. There were some months it REALLY sucked, but you find the motivation when the alternative is losing your house. How is that even possible? I don't usually dig into numbers but 15% of $35K is $5,250 plus $19,200 for the house and $7,200 for daycare equals $31,650, which leaves only $3,350 for everything else (including taxes). Not trying to be snarky, I just don't get how you manage. Sorry. Forgot to include the 12K child support, and I don't have a tax obligation. My point was it's easier to figure out ways to pay the bills then it is to have money left over at the end of the month to save.
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Deleted
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Post by Deleted on Mar 6, 2015 13:43:34 GMT -5
The idea is if you ALWAYS pay yourself first (from day 1 in-utero) your expenses will never be larger than your income (theoretically) because you won't be able to AFFORD the fancy cell phone plan or the expensive car or... etc. It's a fixing yourself to a pre-set budget with two categories: save and spend. Or course there are always ways to destroy one's budget and screw yourself. But it is a simple way to 'save' if you aren't financially savvy. Agree with you there, if you start that from day 1 it's a good mantra, but a lot of people I know are in the hole pretty good before they wake up. When I woke up and was in debt the only pay yourself first item I couldn't let go of was contributing enough for the 401k match, otherwise it all went to debt. It's how I live now though, maxing all possible tax deferred savings, living off the rest, and saving anything left over in taxable.
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gs11rmb
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Post by gs11rmb on Mar 6, 2015 14:05:10 GMT -5
Sorry. Forgot to include the 12K child support, and I don't have a tax obligation. My point was it's easier to figure out ways to pay the bills then it is to have money left over at the end of the month to save. That makes much more sense!
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