Money management/personal finance discussion:

[jread]

I recently picked up "Financial Peace" by Dave Ramsey and must admit that I have learned a lot from the book. It's really simple and easy to read (if a bit too "Jesusy").

The tips in his book gave me a new way of looking at finances and debt management, though it's very broad. I'd like to learn more about actual software for money management (Quicken or Money), etc. What are some tricks you guys use? Any advice to give?

I'm trying to first pay off my debts. Going to use the "debt snowball" method from the book...sounds effective and easy: arrange debts from smallest to largest, pay extra on smallest until it's gone, add payments from smallest to next debt's payment, pay next one off, add payments from first two debts to third debt's payments, pay it off, etc. etc.

Once I'm there, though, I need to start saving and investing. I also need a good way to balance my monthly budget and pay bills. Also need to get better at bargain shopping. I'm just ready to be more financially stable. We make decent money but need to manage it better.

 

[everman]

Earnst & Young's retirement planning guide. This book covers a lot of things and still geared toward a normal person, not professionals.

It's geared toward retirement planning, very important no matter how young you are. In fact, the more you know earlier, you can be more well off by an exponential factor.

finance.cch.com has some nice things to use as well.

And learn about asset allocation, this is the key to having a great portfolio no matter the size.

Finding a good financial planner is also a great idea, make sure they're a CFP or Chfc. I'd prefer the independent type with lots of experience, clean record (they're audited by the SEC biannually), and willing to help someone just starting out.

hope that helps

 

[Yossarian]

Originally posted by: jread
I'm trying to first pay off my debts. Going to use the "debt snowball" method from the book...sounds effective and easy: arrange debts from smallest to largest, pay extra on smallest until it's gone, add payments from smallest to next debt's payment, pay next one off, add payments from first two debts to third debt's payments, pay it off, etc. etc.

not taking into account interest rates is foolish. it's generally better to pay off debts with the highest interest rate first. the exception is if you have a very small balance at a high rate, it might be better overall to pay off a lower interest rate account that has a high balance.

 

[Sluggo]

Originally posted by: Yossarian

Originally posted by: jread
I'm trying to first pay off my debts. Going to use the "debt snowball" method from the book...sounds effective and easy: arrange debts from smallest to largest, pay extra on smallest until it's gone, add payments from smallest to next debt's payment, pay next one off, add payments from first two debts to third debt's payments, pay it off, etc. etc.

not taking into account interest rates is foolish. it's generally better to pay off debts with the highest interest rate first. the exception is if you have a very small balance at a high rate, it might be better overall to pay off a lower interest rate account that has a high balance.

There is reasoning behind his theory that is explained in the book.

Once you can knock off a small debt or two, you begin to see some success, and maybe see a light at the end of the tunnel. His theory isnt rocket science by any means, just a basic simple plan that most people can follow easily.

He does advise getting interest rates lowered, or surfing your balance, but always get the small nagging stuff out of the way, and apply what you were paying on that to the next one.

 

[jread]

bump 🙂

 

[farmercal]

I use Microsoft Money 2006 (got it free with Tax software purchase). I have been using a earlier version of Money for years and it manages my mortage, bill paying, bank account and even credit cards. It helps me see what I owe and what have in savings and investments. Quicken can do the same thing, I just started with Money and like the software. Sounds like you are on the right track. I just wiped out my HELOC and am using the money I used to pay that with to wipe out my credit card balance. Then all I have is a year note on my car and a mortgage.

 

[JS80]

It doesn't take rocket science to know you should save/invest and not spend on stupid stuff on wal-mart and eat from the $1 value menu and don't get soda.

 

[kranky]

For all practical purposes, Quicken and Money do the same thing and it doesn't matter which one you use.

What you gain by using them is:

1. Tracking budget vs. actual spending. You can set up a monthly budget for each category of spending (as detailed as you wish) and then see if your actual spending is in line with your budget. Helps you see where you got off track.

2. Ways to analyze your income and spending. Customizable graphs, reports, etc.

3. Ease of keeping your records accurate and complete. You can probably download all your banking, investment, and credit card transactions directly into the software so you don't spend a lot of time typing things in. You still have to categorize them, though. You can also set up recurring transactions for your monthly/quarterly/annual bills so you remember to plan for them. It helps you reconcile your bank account against your statement to make sure everything is accounted for.

 

[SaturnX]

Quicken's great, I use to monitor my spending, and it definately keeps me in line, and it's great being able to see all my accounts right in one location. Without it I most definately spend more money, and mostly on useless things at that.

--Mark

 

[gordita]

Good thread.
I use quicken too.
but I use it a little differently.
I still do not trust quicken with my CC and my bank info.
so I created a cash account and I just list all my spending only (my wife's also).
this way, I can clearly see where my money is going.

I don't do any of the reconciliation stuff.....just manually input my salary and all the expenses.

also the fact that I mainly use cash for all my expenses helps too......I only use the CC for paying some utilities and such, nothing else. most of the time, the CC is at home, not in my wallet.
This helped me tremendously in curtailing my spending habits.

Some may argue that I'm missing out on cash backs and airline miles by not using my card but the amount of $$$ I save by using only cash far outweighs the $300 cash back per year or airline miles which are always blacked out.....
i'm talking thousands of $$$ here....

 

[GeneValgene]

Originally posted by: farmercal
I use Microsoft Money 2006 (got it free with Tax software purchase). I have been using a earlier version of Money for years and it manages my mortage, bill paying, bank account and even credit cards. It helps me see what I owe and what have in savings and investments. Quicken can do the same thing, I just started with Money and like the software. Sounds like you are on the right track. I just wiped out my HELOC and am using the money I used to pay that with to wipe out my credit card balance. Then all I have is a year note on my car and a mortgage.

i have a ms money question...i just started using it, but i don't know how to categorize credit card payments from my banking account...

for example, let's say i have Bank A and Credit Card B in my list of accounts. I pay the balance of Credit Card B from my account in Bank A. Because of that, my credit card payment shows up as an expense. But in actuality, it's not an expense, because all expenditures on Credit Card B are the true expenditures, not the credit card payment from Bank A.

how can i tell ms money not to classify credit card payments as expenditures? it's throwing off my charts, because they are showing as an uncategorized expense

 

[PhoenixOrion]

software: excel, home-made datasheet with all kinds of links and conditions.

approach: live frugal (cut coupons, buy one/get one, bargain-hunt, use generics, buy everything in cash-mentality, etc), save up (i.e. still put away $X for future car even though current car is paid off or no current payments), pay off your debts like you're doing and lastly save up 🙂