Your parents ever talk to you about money?

[Kaido]

It's a neat idea but dangerous territory. You need to have your SO buy-in on this, or you'll be lucky to have a couch to sleep on.

Oh, absolutely. Going back to the blueprint thing, I think we all grow up with a certain blueprint of how money works in our minds, and sometimes that clashes with your S.O.'s blueprints. iirc, finances are the #1 cause of divorce (or close to it). You basically have to sit down & develop your own new blueprint together as a couple. For some people, that means having separate bank accounts & paying for things like roommates. For other people, they have enough funds that they never have to check the balance. For others, that means setting up an allowance system. I'm not making minimum wage anymore, but I still like the allowance system because it's a bulletproof way to stay out of financial trouble. It's like having a Chromebook as my primary computer...just another thing I don't have to think about :awe:

 

[pauldun170]

pics?

Pics of the retirees or of the fucking?

 

[kt]

That probably depends on one's spousal's relationship between each other with money. Here, I think that card would be perfect and very appreciated.

The irony is that we each had one of those Serve cards when they first came out, but only got them for the free $25 promo to apply for it. After using the $50 on them, I cancelled the cards. To me that was just being frugal.

Don't get me wrong, for some couples this card probably works wonder. However, for others this concept may cause more headaches than it is worth.

When my wife and I got married, we were virtually debt-free because both of us are responsible with our finances. I make significantly more than her, so I am doubly more impressed. So imagine how she would feel after all these years I drop this card in her lap telling her this is her allowance without any discussion? So for us, this card is a useless tool. However, if you have bad spending habits then this card is probably going to help curb your spending habits.

 

[zinfamous]

Pics of the retirees or of the fucking?

this isn't really an "or" type of request.

 

[Cappuccino]

What I don't understand is people driving nice cars and they don't have work. I see my friend driving a 30k car and he only works 16h week. Sad.

 

[PricklyPete]

What I don't understand is people driving nice cars and they don't have work. I see my friend driving a 30k car and he only works 16h week. Sad.

Welcome to America!

 

[ponyo]

Yeah. I think it helps to have some kind of personalized system that meets your needs & goals. Everyone does it differently too...there was another thread here discussing how people managing finances with their S.O. & it was all over the map. For me, I have a pretty basic system:

1. We have his & her AMEX Serve cards (basically really neat reloadable debit cards that act like credit cards) that get a weekly allowance. Covers going out to lunch or dinner, buying toys off Amazon or Newegg, getting nails & hair done, etc. Each card has its own app with a quick-swipe check so you can see the remaining balance; there's no risk of overdrawing a bank account or clashing with the other person's "mad money", plus I don't have to track every single purchase like I did in the past. Also nice for stuff like birthdays & Christmas because then you have a little more discretion on picking out surprises without the other person knowing what you bought!

2. We have one small credit card, which gets paid off monthly, that we use mainly for gas (usually puts a $150 temporary hold, so there's enough buffer for a couple fillups) & emergencies (ex. $400 for a flat tire); it's a different brand from AMEX so it also acts as a backup if a place doesn't take AMEX or it goes down for whatever reason. We use this & the AMEX cards to prevent card theft as well, since they're both pretty good about reimbursements (we've had three fake card readers yanked in my town already!). Basically no risk of the debit card getting lost or stolen because we simply don't use it, so the bank account stays as well-protected as possible.

3. Paychecks go into the primary bank account, where all of the recurring bills & savings are set to autopay on a schedule, managed by a simple shared Google Docs spreadsheet. This gives us a quick list to review of what our bills are & when they are due, and I don't have to manage every single bill payment throughout the month, which is nice.

I like this system a lot because it's automated & safe. Public purchases are protected by the credit card companies, I don't have to babysit it every day for tracking purchases & paying bills, and it's pretty easy to stay out of trouble because it limits what you can spend - you can't drink from the firehose, so to speak, because you're pretty much limited to your "allowance" account & the emergency card for backup. Low-maintenance & fairly hassle-free :thumbsup:

If kids were taught something like that, and then taught how to manage "good debt" (school, transportation, housing), as well as a basic budget (food, utilities, toiletries, various types of savings accounts - 401k, CHET, rainy day, etc.; don't buy what you can't afford, basically), that would keep them out of trouble 99% of the time. It's not rocket science, but if you never get a solid foundation under you, it's all too easy to magically become an adult over time & still be stuck with the same poor financial habits as when you were younger. The number of people I know who make good money but are still living paycheck to paycheck is staggering, and it's hard not to feel trapped if you're already stuck & don't know where to turn for solid financial advice, because everyone's always trying to sell you something. It gets messy!

That sounds complicated and like lot of work. If it works for you, great but that's just busy work. I rather spend my energy trying to increase income rather than micromanage expenses and spending.

My simple rule is charge everything I can on my various credit cards. I never use a debit card and rarely use cash. Since I use credit cards, I know how much I'm spending since the credit card companies track my spending for me.

 

[kt]

That sounds complicated and like lot of work. If it works for you, great but that's just busy work. I rather spend my energy trying to increase income rather than micromanage expenses and spending.

My simple rule is charge everything I can on my various credit cards. I never use a debit card and rarely use cash. Since I use credit cards, I know how much I'm spending since the credit card companies track my spending for me.

What he described isn't something new. For some folks, it's just another day of being a financially responsible adult. What his method does offer though is a safety net preventing you to stray from the path. If you don't trust yourself to be responsible with your money then all that work may be worthwhile. But if you know and trust yourself then yes it is a lot work for nothing.

 

[Kaido]

That sounds complicated and like lot of work. If it works for you, great but that's just busy work. I rather spend my energy trying to increase income rather than micromanage expenses and spending.

My simple rule is charge everything I can on my various credit cards. I never use a debit card and rarely use cash. Since I use credit cards, I know how much I'm spending since the credit card companies track my spending for me.

What he described isn't something new. For some folks, it's just another day of being a financially responsible adult. What his method does offer though is a safety net preventing you to stray from the path. If you don't trust yourself to be responsible with your money then all that work may be worthwhile. But if you know and trust yourself then yes it is a lot work for nothing.

I'm trying to figure out what the "a lot of work" thing means. Bills & savings are auto-paid through the bank account, his & her spending cards are auto-filled weekly with set amounts, and those cards are used for daily spending, along with a backup credit card for gas & emergencies. It's the lowest-maintenance system I've ever used. You never really do much of anything other than a monthly review to make sure everything is still on track, or add/remove an auto billpay as things change.

It's partly about putting in a safety net, but it's also great because you don't have to micro-manage everything - you have budget "buckets" to work with at your discretion. Yes, it's also useful for people who struggle with spending money too freely, but the wealthy people I know who get rich & stay rich do so by auditing everything they spend (or having their account do it for them), right down to their gas receipts. You'd be surprised at the number of millionaires who track daily expenses & even use coupons. I do IT work for some well-off people & was surprised at how many of them manage their finances down to that level...I always thought it'd be the opposite, that you were free to spend at will if you were loaded, as long as you didn't go bananas & blow all of your money, but that's rarely the case, in my experience.

To your point of increasing income, I suppose that works for some people, but I kind of like having a day job & then being able to enjoy the rest of my free time. Managing finances lets me work with what I have, rather than constantly chasing more money (which is totally fine if that's what you're into, nothing wrong with focusing on increasing your income). I'm of the mindset that most people don't actually struggle with not making enough money, it's that they don't manage what they have very well.

The simple rule is don't spend more than you earn, and there are a variety of ways to do that. I definitely like a hands-off, safety-net approach because it's easy. For example, I've been saving up for some VR gear since it was announced back in January or so. Super easy to setup a Smartypig online savings account & have it auto-withdraw a portion of the required funds from my bank account every week. Just another expense in the spreadsheet list, which also makes it easy to see if you can responsibly afford a new expense based on what you're already paying into savings & for regular fixed expenses.

Short of paying someone else to manage your finances, I can't think of an easier way to do it. And it's so simple, I don't think I'd even want it farmed out, because then I'd actually have to talk to someone

 

[Sonikku]

Mother tried but she doesn't know much of anything about money. She's always been destitute. I remember her telling me when I was a kid that you need to be afraid of making one dollar too much or they'll be dropped in a whole other tax bracket and end up significantly poorer.

 

[pauldun170]

this isn't really an "or" type of request.

Very good point

 

[Uppsala9496]

Parents never really talked about it with me.
I do talk about it with my daughter (8) though.
Her 2nd grade class just learned about debit cards versus credit cards and how you shouldn't use credit cards. Very simplified but at least they are learning at that age not to borrow money.


I was then explaining how we used "free" money to pay off our 0% interest furniture loan. They allow me to pay their credit with a credit card. So I use my United card to get miles and the cycle works where I get an additional 20 days of not having to pay off the United card. So it's 50 days per bill where I am not shifting money out of the checking account to pay the bill.

I also explained how the only debt we have is the mortgage and that furniture credit and use our money to make money.

Still kicking myself in the ass for not using credit cards to pay for the 2 cars we recently bought. Wrote a check and didn't even think about earning miles or hotel nights. Doh!

 

[Kaido]

For some folks, it's just another day of being a financially responsible adult.

I think that's the key: find a way to make yourself be financially responsible, whatever that system may be. There's a million ways to do that, and even more ways to not be responsible with your money. I think a lot of people would benefit from the Dave Ramsey stuff, even if I don't agree with his methods 100%. I mean, in a nutshell:

1. Don't spend more than you earn

2. Setup a system (habits, cards, spreadsheets, whatever) that ensures that you stay financially responsible...could be mental, could be software like Mint or Quicken, could be a paper notebook, anything that works for you

3. Setup a bunch of savings accounts so you don't screw yourself over in the future:

a. At least a grand in quick-access cash for emergencies
b. A 401k or IRA for retirement, even if it's just something like Betterment
c. Sub-accounts or something like SmartyPig for various savings projects (vacations, toys, holiday gifts, etc.)

It's not hard, but it is a new thing for a lot of people. Last statistic I read was that the average American credit card debt was just over $15,000. Now, that can happen for a lot of reasons - unexpected medical expense, car repair, etc. - but the fact that the $15k number is the average across the board for people who have credit card debt is pretty telling.

And of course, from there, you can dig deeper into making it more complicated...start doing investing, buy up assets, make more money, become a landlord outside of your main job by buying a rental, get a tax guy, get an accountant, etc. But for 99% of the people, KISS is the way to go.

 

[Mai72]

Well, it gets difficult because some debt is "good" debt:

1. Education
2. Car
3. House

That doesn't mean you need an Ivy League education or a $45,000 BMW or a mansion, but you do need to get trained to do your job, a way to get to work, and a roof over your head. You can skip the debt if you just jump into the workforce directly & skip school, buy a used car in cash, and rent, but that doesn't always equate to strong earning power, so if you want to get married, have kids, settle down into a place of your own, you usually have to amass some kind of debt up front, unless you have rich parents or get lucky with an awesome-paying job that covers the full amount of school, a car, and a home.

I know this is going to be unpopular with people here, but IMO a home can be bad debt. The same with an education. Especially in today's climate where many college graduates owe tens of thousands of student loan debt.

But, back to the house. Anything that takes money out of your bank account is not good. Anything that is not making you money is not a good investment. Even in the best economy, the housing market has only given a 1% back. I'd rather put my money into family rentals. You want your money free. You want money making money. If you look at the facts, we are becoming a renters nation. Many baby boomers are downsizing and many millennials are unable to buy due to their student loan debt.

Plus, I would rather be nible so I can move around. I can move to Asia or Europe if I want too. Plus, if I have checks that are coming in from my rentals I won't even have to worry about my finances.

That's me though. I know many people don't share my opinion. That's fine. To me, a home is nothing more than a place that has a roof that I can sleep at night. I'm not talking about a sh*t hole either.

 

[PricklyPete]

That sounds complicated and like lot of work. If it works for you, great but that's just busy work. I rather spend my energy trying to increase income rather than micromanage expenses and spending.[\b]



My simple rule is charge everything I can on my various credit cards. I never use a debit card and rarely use cash. Since I use credit cards, I know how much I'm spending since the credit card companies track my spending for me.

I agree with your statement to extent. income is a very important part of wealth building, but expense control is just as important and requires different levels of attention depending on the number and habits of the people involved.

Are you married? I ask because your comment doesn't allude to you being married. I certainly could be wrong on your situation, but for me, having a healthy relationship has always involved a lot of communication on finances. A simple budget is a great (fairly passive) method of communicating. Our budget doesn't even involve spending buckets, but rather a goal, pre-loaded expenses, trends, and rates.

I make good money, but I have a number of friends who make significantly more. With the exception of one of them (he and his wife live like they are one step from being homeless), I am in a way better financial state then all of them. I also have another friend who makes significantly less than I do, but is thinking of early retirement in the next few years (at 32 ... some good investments and extreme expense control).

So while a few minutes a day may sound like a waste of time to you, I would argue that it is equally important to the income effort.

 

[Kaido]

I make good money, but I have a number of friends who make significantly more. With the exception of one of them (he and his wife live like they are one step from being homeless), I am in a way better financial state then all of them. I also have another friend who makes significantly less than I do, but is thinking of early retirement in the next few years (some good investments and extreme expense control).

Yup same. I work with a lot of engineers who make 2x what I do, but I'm in a financially better state of affairs than they are. Not that I'm living like a king, but paying attention to your financial stuff definitely allows you to have more control over it. It's hard to answer questions without concrete data, so if you don't track things, you'll only ever have a general idea of how much is available, what you typically spend on food, gas, etc., which is fine if your pool of cash is large enough to accommodate that kind of lifestyle, but having learned finances the hard way growing up & not really digging into it myself until I was well in my 20's, I would never go back to doing it that way. Plus, my current system literally only requires minutes a week...a quick glance across accounts to make sure everything is in order pretty much does the trick. It's not hard to do, but you do have to spend some time settings things up initially & adopting the habits; after that, it's a cakewalk!

 

[zinfamous]

I know this is going to be unpopular with people here, but IMO a home can be bad debt. The same with an education. Especially in today's climate where many college graduates owe tens of thousands of student loan debt.

But, back to the house. Anything that takes money out of your bank account is not good. Anything that is not making you money is not a good investment. Even in the best economy, the housing market has only given a 1% back. I'd rather put my money into family rentals. You want your money free. You want money making money. If you look at the facts, we are becoming a renters nation. Many baby boomers are downsizing and many millennials are unable to buy due to their student loan debt.

Plus, I would rather be nible so I can move around. I can move to Asia or Europe if I want too. Plus, if I have checks that are coming in from my rentals I won't even have to worry about my finances.

That's me though. I know many people don't share my opinion. That's fine. To me, a home is nothing more than a place that has a roof that I can sleep at night. I'm not talking about a sh*t hole either.

fwiw, I think Kaido agreed with you and mentions this in an earlier post. It is why he uses "good" instead of good. Most people like to call things "good debt." No debt really is good.

especially cars...that shit is awful in every way, though I know for his purposes it works for him and he needs one, and because he shaves off spending in other areas.

I think when people call cars "good debt," they are convinced that taking out a loan to purchase one is somehow a good idea.

lol--it is never a good idea. If you can't buy a car outright in cash, then you can't afford a car. period. And I've been guilty of this and I got better. At least my plan was to take a small loan, pay off quickly, run that car until it turns into rust. I think a lease is a better option than a loan because you aren't saddled with an inherently valueless object the moment you purchase it, and if you work in an industry where a car's status is somehow valued towards your position/status (something that will never concern me...but I understand that this exists).

 

[dank69]

fwiw, I think Kaido agreed with you and mentions this in an earlier post. It is why he uses "good" instead of good. Most people like to call things "good debt." No debt really is good.

especially cars...that shit is awful in every way, though I know for his purposes it works for him and he needs one, and because he shaves off spending in other areas.

I think when people call cars "good debt," they are convinced that taking out a loan to purchase one is somehow a good idea.

lol--it is never a good idea. If you can't buy a car outright in cash, then you can't afford a car. period. And I've been guilty of this and I got better. At least my plan was to take a small loan, pay off quickly, run that car until it turns into rust. I think a lease is a better option than a loan because you aren't saddled with an inherently valueless object the moment you purchase it, and if you work in an industry where a car's status is somehow valued towards your position/status (something that will never concern me...but I understand that this exists).

There absolutely is such a thing as good debt. Take a loan at 3% interest to invest and make 10% interest? GOOD debt.

 

[zinfamous]

There absolutely is such a thing as good debt. Take a loan at 3% interest to invest and make 10% interest? GOOD debt.

Right--now please advise me to that guaranteed 10% return and a place where this is legal?

(no, not China. I can't breathe there)

 

[PricklyPete]

There absolutely is such a thing as good debt. Take a loan at 3% interest to invest and make 10% interest? GOOD debt.

That's called "potentially good debt". It is also known as "potentially disastrous debt". The "goodness" of that type of debt is completely based on the individual/situation.

 

[dank69]

Right--now please advise me to that guaranteed 10% return and a place where this is legal?

(no, not China. I can't breathe there)

I'm just throwing numbers out there. However, people and corporations do this shit all the time. Take rental real estate for example. 3% fixed rate for a rental property? Yes please. Find a few good tenants and you're as close to guaranteed as you can get these days.

 

[kt]

I'm trying to figure out what the "a lot of work" thing means. Bills & savings are auto-paid through the bank account, his & her spending cards are auto-filled weekly with set amounts, and those cards are used for daily spending, along with a backup credit card for gas & emergencies. It's the lowest-maintenance system I've ever used. You never really do much of anything other than a monthly review to make sure everything is still on track, or add/remove an auto billpay as things change.

It's partly about putting in a safety net, but it's also great because you don't have to micro-manage everything - you have budget "buckets" to work with at your discretion. Yes, it's also useful for people who struggle with spending money too freely, but the wealthy people I know who get rich & stay rich do so by auditing everything they spend (or having their account do it for them), right down to their gas receipts. You'd be surprised at the number of millionaires who track daily expenses & even use coupons. I do IT work for some well-off people & was surprised at how many of them manage their finances down to that level...I always thought it'd be the opposite, that you were free to spend at will if you were loaded, as long as you didn't go bananas & blow all of your money, but that's rarely the case, in my experience.

To your point of increasing income, I suppose that works for some people, but I kind of like having a day job & then being able to enjoy the rest of my free time. Managing finances lets me work with what I have, rather than constantly chasing more money (which is totally fine if that's what you're into, nothing wrong with focusing on increasing your income). I'm of the mindset that most people don't actually struggle with not making enough money, it's that they don't manage what they have very well.

The simple rule is don't spend more than you earn, and there are a variety of ways to do that. I definitely like a hands-off, safety-net approach because it's easy. For example, I've been saving up for some VR gear since it was announced back in January or so. Super easy to setup a Smartypig online savings account & have it auto-withdraw a portion of the required funds from my bank account every week. Just another expense in the spreadsheet list, which also makes it easy to see if you can responsibly afford a new expense based on what you're already paying into savings & for regular fixed expenses.

Short of paying someone else to manage your finances, I can't think of an easier way to do it. And it's so simple, I don't think I'd even want it farmed out, because then I'd actually have to talk to someone

Let me explain what "a lot of work" means to me. It's having to micro-manage myself to do what I am already trained to do for more than half of my life. For instance, you are talking about giving yourself a budget on the reloadable prepaid AMEX cards. Not only do I have to constantly reload the prepaid cards but I am screwing myself over on cash back rewards by not using my credit cards.

Besides that, I am pretty much in agreement with you on everything else.

 

[brianmanahan]

I never knew money was such a taboo subject. Never had any problems discussing money with my folks.

same here, i don't know why people don't want to talk to their kids about it. maybe they don't trust their kids not to tell everyone.

i too was told that college was mine to pay for, unless i got scholarships. so i did.

and now i do taxes for my parents and grandparents.

 

[Kaido]

Let me explain what "a lot of work" means to me. It's having to micro-manage myself to do what I am already trained to do for more than half of my life. For instance, you are talking about giving yourself a budget on the reloadable prepaid AMEX cards. Not only do I have to constantly reload the prepaid cards but I am screwing myself over on cash back rewards by not using my credit cards.

Besides that, I am pretty much in agreement with you on everything else.

Yeah, and everyone has a different system, which is great as long as it all gets to the same end goal - being financially responsible. I know people who use actual envelopes for managing cash & that works for them. Also fwiw, the AMEX cards can auto-reload. But if you're doing cashback stuff, even better!

 

[KMFJD]

Don't go into debt for stupid frivolous crappie was the basic msg