zippy478
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Post by zippy478 on May 25, 2011 14:16:52 GMT -5
So I've lurked here sporadically since the boards moved over from MSN. I need some input though. I'm trying to get back to basics - my DH and I haven't always been on the same page about money and we are slowly digging ourselves out of that hole and getting back to the same page. In the process though, I want to establish new "ground rules" such as "don't spend if you don't have it," "don't spend in anticipation of having it," etc. Can you all help me come up with some more "rules" to live by? Any help is appreciated
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swamp
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Post by swamp on May 25, 2011 14:19:05 GMT -5
Spend less than you make is the general rule, but for specific suggestions, you need to start with posting what you make, what you spend, and what you owe, and then maybe we can.
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Sum Dum Gai
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Post by Sum Dum Gai on May 25, 2011 14:24:02 GMT -5
Simple financial rules to live by huh? I'll take a shot:
Do: Make more money, spend less, pay yourself first.
Don't: Spend more than you make, not save, pay interest on anything other than appreciating assets.
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thyme4change
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Post by thyme4change on May 25, 2011 14:26:18 GMT -5
Rule 1) Make a budget which includes savings, fun money, and accounts for routine - but periodic known expenses (such as new tires)
Rule 2) Stick the budget
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zippy478
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Post by zippy478 on May 25, 2011 14:26:28 GMT -5
Thanks...right now I'm just looking for money rules to live by though - not necessarily specific help with my budget. For many years we just spent money without any sort of thought to the consequences (i.e. how cashing in a 401(k) would ultimately affect us down the line) and I want to change that but I don't know the best way to put it in terms that both of us can agree to and work within.
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zippy478
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Post by zippy478 on May 25, 2011 14:27:44 GMT -5
Rule 2) Stick the budget
Um, where should I stick the budget? LMAO....
Seriously - thank you for the suggestions so far...keep them coming!
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swamp
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Post by swamp on May 25, 2011 14:29:05 GMT -5
Thanks...right now I'm just looking for money rules to live by though - not necessarily specific help with my budget. For many years we just spent money without any sort of thought to the consequences (i.e. how cashing in a 401(k) would ultimately affect us down the line) and I want to change that but I don't know the best way to put it in terms that both of us can agree to and work within. Give him a can of cat food. ASk him is that's what he wants to eat in retirement.
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zippy478
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Post by zippy478 on May 25, 2011 14:29:31 GMT -5
When Mr. Sroo and I started to really live by our budget we chose a zero based weekly budget. Basically it means that I mapped out every penny from every paycheck for the year. We had to banish the words "I get paid on Friday" and "We can pay for X out of my paycheck" when it came to extras. I had to tell Mr Sroo that our 'Next Paychecks' don't exist. (Can you tell we were living paycheck to paycheck??) Instead, we now 'See where X fits in our current plan'. Meaning, we can allocate some of our household misc money to that... or we have $100 coming up in two weeks that was designated entertainment, but we can buy X instead. That is a new idea that I hadn't seen before...I'm going to try that for June and see how it works out. Problem is - DH's income is not as regular as mine so that complicates things as well.
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midjd
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Post by midjd on May 25, 2011 14:29:54 GMT -5
Invest with an eye toward the long-term. Pick some funds that work with your risk tolerance, set up an automatic contribution from your paycheck, and forget about it (other than rebalancing your portfolio every so often). If you think of your retirement accounts as an EF, you're much more likely to raid them.
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Post by Deleted on May 25, 2011 14:29:54 GMT -5
Thanks...right now I'm just looking for money rules to live by though - not necessarily specific help with my budget. For many years we just spent money without any sort of thought to the consequences (i.e. how cashing in a 401(k) would ultimately affect us down the line) and I want to change that but I don't know the best way to put it in terms that both of us can agree to and work within. Give him a can of cat food. ASk him is that's what he wants to eat in retirement. Make sure it is not the fancy stuff, because it is not half bad.
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NomoreDramaQ1015
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Post by NomoreDramaQ1015 on May 25, 2011 14:30:36 GMT -5
For many years we just spent money without any sort of thought to the consequences
Place to start is basically don't do the above anymore. Think before you spend.
Once you start thinking before spending you can start thinking about what you are going to do with all that money you don't mindlessly spend anymore.
Pay yourself first is also a good one, if you have $X diverted every pay day (or whenever) to savings or investments, you can't spend it. Treat savings like another bill that has to be paid every month and live off what is left.
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swamp
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Post by swamp on May 25, 2011 14:31:17 GMT -5
Give him a can of cat food. ASk him is that's what he wants to eat in retirement. Make sure it is not the fancy stuff, because it is not half bad. Archie licks his butt.
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zippy478
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Post by zippy478 on May 25, 2011 14:31:29 GMT -5
Thanks...right now I'm just looking for money rules to live by though - not necessarily specific help with my budget. For many years we just spent money without any sort of thought to the consequences (i.e. how cashing in a 401(k) would ultimately affect us down the line) and I want to change that but I don't know the best way to put it in terms that both of us can agree to and work within. Give him a can of cat food. ASk him is that's what he wants to eat in retirement. That would make things very visual for him for sure - he's a more visual learner than I am and it might help! It's hard to see the end of the tunnel (i.e. retirement) when we are still digging out of the hole we've dug ourselves but maybe we collect one can of cat food for each year's worth of retirement expenses we ultimately save! (not literally but figuratively as by the time I saved enough the cat food would have gone bad and not be able to donate it to an animal shelter...)
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thyme4change
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Post by thyme4change on May 25, 2011 14:32:25 GMT -5
ROFL - sometimes such a little word is so important.
TO
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maraqxa
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Post by maraqxa on May 25, 2011 14:33:59 GMT -5
I say pay yourself first. We only budget our savings, retirement, investments and do not touch that money. Everything else is fair game but we don't feel guilty about expenditures because we know we are not touching savings. You still have to plan so that you don't overspend but if I want to buy some clothes then I won't spend money going out to eat.
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shanendoah
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Post by shanendoah on May 25, 2011 14:34:55 GMT -5
Do: 1) Communicate with your spouse- set a weekly/monthly (what ever works for you) meeting time that is dedicated to discussing your current financial state. This is a team effort. 2) Track your spending- know where every single penny is coming from and going to (this includes credit card expenditures) 3) Have a plan- know what your goals for your money are and how quickly you can realistically get there 4) Create an Emergency Fund- It may slow down other goals, but slowing down is a lot better than having a major setback and falling off the wagon entirely 5) Give yourself some wiggle room- Being too strict for too long just results in misery. Allow some "fun" money
Don't: 1) Enter in to new credit agreements if you're having problems meeting your current obligations 2) Buy anything on impulse- research is your friend and a money saver 3) Stop contributing to retirement savings
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zippy478
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Post by zippy478 on May 25, 2011 14:34:56 GMT -5
So how did you all save up enough for big expenses while living paycheck to paycheck? I mean really big expenses like a new roof.
I'm paying myself first - I have a percent of my pay going to a 401(k) and also deposit to a savings account that is at a different bank. Granted, it's not much every month but it is something and I plan on slightly increasing it every six months. (By slightly I mean $5-10 right now as things really are tight)
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Post by Deleted on May 25, 2011 14:35:38 GMT -5
I would make the budget based on the lowest version on his income and your income.
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maraqxa
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Post by maraqxa on May 25, 2011 14:38:13 GMT -5
Post your income/expenses. You might be surprised by some items that you can see you can make some changes on.
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shanendoah
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Post by shanendoah on May 25, 2011 14:40:45 GMT -5
...:::So how did you all save up enough for big expenses while living paycheck to paycheck? I mean really big expenses like a new roof.:::...
I get paid every 2 weeks, that means I get 26 paychecks a year, but since most months I only have 2 paychecks to work with, that is what I base my budget on. That means the two times a year I get a 3rd paycheck in a month, that money can go directly toward other goals, like savings or paying down debt.
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whoisjohngalt
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Post by whoisjohngalt on May 25, 2011 14:41:09 GMT -5
I tend to look at the big picture. I budget annually. I like the idea of increasing income much more than idea of cutting expenses, bc at some point there just won't be anything left to cut.
Lena
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NomoreDramaQ1015
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Post by NomoreDramaQ1015 on May 25, 2011 14:42:30 GMT -5
So how did you all save up enough for big expenses while living paycheck to paycheck? I mean really big expenses like a new roof
Pretty much one dollar at a time. Our Savings/EF isn't near where I want it to be right now due to having to actually use it, but we are slowly building it back up.
Odds are pretty low that certain things are going to happen to us in the very near future so I try not to dream up all the big things that can go wrong because it isn't worth getting anxiety attacks over.
Still need to save for those things, but I am not panicking about not having the money right this very minute at my finger tips.
We have rental insurance, housing insurance, medical/dental insurance, car insurance, an umbrella policy that would all cover really major potentially bankrupting emergencies.
For everything else we keep plowing ahead one dollar at a time.
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zippy478
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Post by zippy478 on May 25, 2011 14:45:39 GMT -5
Okay...here goes nuttin.....
Income: $5,000
Expenses: Housing: 1350 Daycare: 960 Car: 470 Insurance: 116 Life Ins: 53 House Ins: 78 CC pmts: 409 Cell phone: 150 Cable (inc. internet): 125 Electric: 80 Misc: 100 Groceries: 400 Personal Expenses: 50 Car Maintenance: 50 Dining out: 100 Gifts: 100 Medical: 40 Gas: 300 Savings: 50
Income is disposable income after 401(k) and savings deposits.
ETA: All numbers are the average that we have spent since Jan. 1. I did an analysis the other day of our income and expenses to see how it broke down to start having these discussions with DH.
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midjd
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Post by midjd on May 25, 2011 14:48:05 GMT -5
Are those minimum payments? My first thoughts are to cut the dining out and gifts in half (so $50/month each). Divert $50 to your CCs and another $50 to savings. Also check out the coupon threads on WIR to get some ideas for reducing your food budget - I cut mine by about 25% just by starting to combine coupons + sales.
The cell bill seems a little high. Any way to switch providers or reduce your package?
Also the car. That's your payment, I assume? What's the interest rate? How much longer is the term?
The good news is that some of those payments (car, daycare) will eventually reduce themselves.
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swamp
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Post by swamp on May 25, 2011 14:48:31 GMT -5
You need to sell your car and buy that elusive reliable beater for $2k, pull the kids from daycare and have your parents watch teh kids for free, drop the cell phone, eat rice and beans, stop eating out, and stop giving gifts. Seriously, your budget needs a little trimming, but not too bad..........
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zippy478
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Post by zippy478 on May 25, 2011 14:50:55 GMT -5
Are those minimum payments? My first thoughts are to cut the dining out and gifts in half (so $50/month each). Divert $50 to your CCs and another $50 to savings. Also check out the coupon threads on WIR to get some ideas for reducing your food budget - I cut mine by about 25% just by starting to combine coupons + sales. The cell bill seems a little high. Any way to switch providers or reduce your package? The CC amount has a $50 snowball built in already. We switched providers last year on the cell bill which saved us the $50 that started the CC snowball. Oh I guess I should add that groceries is everything - diapers, wipes, household cleaners, etc. and we have a family of five with one still in diapers. Sorry for not putting that out there sooner.
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zippy478
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Post by zippy478 on May 25, 2011 14:51:45 GMT -5
You need to sell your car and buy that elusive reliable beater for $2k, pull the kids from daycare and have your parents watch teh kids for free, drop the cell phone, eat rice and beans, stop eating out, and stop giving gifts. Seriously, your budget needs a little trimming, but not too bad.......... I started reading that and I was like Wait a second! I've done some of those things already! Haha
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Sum Dum Gai
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Post by Sum Dum Gai on May 25, 2011 14:51:49 GMT -5
Daycare: 960 Car: 470 CC pmts: 409 Ouch. Poor bastards. Keep plugging away at the debt, tell the kid to grow faster, and keep the car for as long as you can after it's paid off.
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midjd
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Post by midjd on May 25, 2011 14:52:57 GMT -5
That's pretty good, then... and I have no room to talk, DH and I spend at least $400/month in groceries for the two of us
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zippy478
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Post by zippy478 on May 25, 2011 14:56:18 GMT -5
Also the car. That's your payment, I assume? What's the interest rate? How much longer is the term? The good news is that some of those payments (car, daycare) will eventually reduce themselves. The car was one of those ill-timed purchases in 2007 and I had bad credit, a fully paid for car that would have worked for at least another year with my family size. Signed the papers on the car and a week later, my DH got laid off (wouldn't have needed his truck anymore so we COULD have traded it in after all) and we needed every penny from selling the car to make ends meet. Looking back I would have waited to buy the car...especially since I just saw it on the road last week! Ouch. So needless to say, I am stuck with the car payment at least another year (maybe 2 but I'm working on paying that as fast as possible) and I'm not sure offhand what the interest rate is. I've tried to re-finance it, sell it, etc but nothing has panned out that would put me into a better position in the end than I'm at right now. Does that make sense? You're right - some of these expenses are temporary and that helps ease the pain a bit...
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