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michaelskis

Money Matters in GR

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Do you have a personal budget process that you do every month? What about retirement goals? Out of debt (other than you house?) Would you say that your money management skills are good?

Personally, I am working on Dave Ramsey

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Contribute as much to your 401k or IRA as you can. My company matches some funds, so always at least contribute enough to get the maximum benefit there. In my case I see an immediate 50% return on my money up to a certain level of contribution.

Live cheaply. My house payment is about $900 after taxes and insurance, but I have roommates that bring in $750/month. I include utilities in their rent, so I'm probably only paying $300 out of pocket on housing, and my roommates are building equity in my home for me.

Save a lot. With low living expenses I'm able to put away a decent amount of money for a rainy day. I'm still working on getting about 6 months salary saved up in case of an emergency. That's in a money market account yielding 5% right now. Once I reach that goal I'll be investing more aggressively. I also save for large purcahes rather than using credit, and while I save that money earns interest as well.

I have also been investing in prosper.com. It's sort of a peer to peer loan system. I lend small amounts of money to people, and when combined with other users' money it funds loans ranging from $1,000, to $25,000. It's not a totally proven concept yet, but it really interested me so I gave it a go with $2,500. I'm earning about 14% there, but it does involve risk. The good thing is that the level of risk you're willing to accept is up to you, and you can invest in low risk loans for a lower return, or high risk loans for a potentially higher return.

I used to own individual stocks, but I sold my porfolio to cover the down payment on my house. I want to get back into that eventually.

I also drive a cheap car with just basic insurance. I'll buy a nicer car when I'm in a better position to afford it. I'll probably drive this one into the ground.

And no, I don't keep a budget other than an Excel spreadsheet with estimated cash flow so I have an idea about what sorts of things I can afford. I don't alot specific amounts of money to specific things.

-nb

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...Do you have any money management tips?

No car payments! Buy a used whatever and keep it running. (Don't car-shop when you're hungry for a fancy-dancy rich Corinthian leather ride.)

Of my last several vehicles, none has cost more than $3k up front. Get the wheel bearing or oil pan leak fixed, and keep that car payment in your pocket. My penultimate four-wheeler had 250k miles on it when I unloaded it (donated to a charity, who now gratefully supplies me with calendars and return address labels).

Cycling to work several times a week saves on fill-ups. I bought gas on Sunday because I drove to Lansing, and that was the first time in two weeks that I'd needed to fill the tank. (Michael, this might be a little tough given your commute.)

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Dave Ramsey is awesome. Bottom line is: Live on less than you make. Avoid credit cards like the plague, and don't borrow to "invest" in anything that depreciates.

I agree with APK about having NO car payments. If you need a car, go for an older classic car, pay cash for it (or pay it off quickly) drive it forever, and invest the $500/month that everyone else is throwing away in a car payment or lease. When something does go wrong and you're stuck paying a $500 repair bill once or twice a year, you're still $5,000 ahead.

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Dave Ramsey is awesome.

.. and a really nice guy.

Carefully watch your spending habits. Resist 'impulse purchases'. Always watch for sales on things you need, but resist buying something just because its a 'great deal' ; If you don't really need it or won't use it, its not a good buy.

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I did the Dave Ramsey plan and got out of debt. I was in a pretty big hole prior to my marriage and using his plan i dug my way out. I can tell you it works, and don't give up. Re-read the book when you get discouraged and listen to his radio show (you can get it online). I went from being in collections with more than one company to debt free besides a student loan and my house (payment + tax + insurance = less than 18% of take home pay). It definately takes most of the financial burden away (I say most becuase we could always make more money :D).

We fell off the budget band-wagon pretty bad in the last 3 months. The new house and new marriage/wedding brought up a lot of unforseen expenses. Add to that the 2 other weddings I'm in this summer. It's funny you would start this topic today. My wife just got her first paycheck for her new, salaried, position. That was what we were waiting for to start our new budget because we weren't entirely sure how much it would be. It's not going to be a whole lot of fun putting the brakes on our reckless spending, but it sure will bring a lot of financial peace. :thumbsup:

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I just live within my means. How the hell you can live outside of that concept is beyond me.

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I've done Dave Ramsey before as well. Not a big fan of the envelope system, but i'm sure it works for a lot of people.

I paid off $33k in credit card debt in the last 6 years. I was trouble in my earlier years. Anyways, i have a wonderful wife who has taught me about the joy of saving money.

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No car payments! Buy a used whatever and keep it running. (Don't car-shop when you're hungry for a fancy-dancy rich Corinthian leather ride.)

My wife and I were just talking about how nice it would be to go shopping for a new car. Unfortunately, we know better. Ours are paid for and I can't imagine having a car payment. Liability only coverage (PLPD for you non-insurance folks) is nice too! But let me lecture for a moment about the 'just basic insurance' comment. I'm not sure what that means, but you should NEVER comprimise your liability limits to save money. That's a great way to get broke in a hurry. If you're driving with the state minimum limits you're asking for trouble.

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My wife and I were just talking about how nice it would be to go shopping for a new car. Unfortunately, we know better. Ours are paid for and I can't imagine having a car payment. Liability only coverage (PLPD for you non-insurance folks) is nice too! But let me lecture for a moment about the 'just basic insurance' comment. I'm not sure what that means, but you should NEVER comprimise your liability limits to save money. That's a great way to get broke in a hurry. If you're driving with the state minimum limits you're asking for trouble.

I am a property and casualty insurance agent.

-- http://www.urbanplanet.org/forums/index.php?showuser=3446

Sorry I had too. :lol:

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Oh, and as for management tips, I use excel to lay out the budget. My first spreadsheet was very involved (IF/THEN statements and the whole 9 yards), but now it's pretty simple.

Sorry I had too. :lol:

Yeah, I figured it was common knowledge that I was in the industry. I'm just trying to give advice. The difference in cost for higher personal liability limits is very minimal and a lot of people don't know that.

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My wife and I were just talking about how nice it would be to go shopping for a new car. Unfortunately, we know better. Ours are paid for and I can't imagine having a car payment. Liability only coverage (PLPD for you non-insurance folks) is nice too! But let me lecture for a moment about the 'just basic insurance' comment. I'm not sure what that means, but you should NEVER comprimise your liability limits to save money. That's a great way to get broke in a hurry. If you're driving with the state minimum limits you're asking for trouble.

Pick up the free brochures distributed in racks in the grocery store entrances. Many dealers take trade-ins and then unload them for $3000. Status-seekers upgrade their rides, trade in. Or they sell them at a public lot or through a classified ad. Also there are several good on-line used car database sites where you can search by geography, make, model, price, age, and whether it comes with matching fuzzy dice.

With a car older than about 5 years, it's not worth it to buy collision coverage. That saves a few bucks too.

Renewing my auto isurance, I got some on-line quotes, and found one that saved about $75/year by my paying in advance. Dave Ramsey might not like this, but I put it on my plastic, and paid it off two weeks later. (It's a no-interest card.)

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Pick up the free brochures distributed in racks in the grocery store entrances. Many dealers take trade-ins and then unload them for $3000. Status-seekers upgrade their rides, trade in. Or they sell them at a public lot or through a classified ad. Also there are several good on-line used car database sites where you can search by geography, make, model, price, age, and whether it comes with matching fuzzy dice.

With a car older than about 5 years, it's not worth it to buy collision coverage. That saves a few bucks too.

Renewing my auto isurance, I got some on-line quotes, and found one that saved about $75/year by my paying in advance. Dave Ramsey might not like this, but I put it on my plastic, and paid it off two weeks later. (It's a no-interest card.)

Anyone know a nice rich gentleman who wouldn't mind sharing some serious $$$$ with me?

:rofl:

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Anyone know a nice rich gentleman who wouldn't mind sharing some serious $$$$ with me?

:rofl:

Do it yourself, Va!

My mother used to harp at me about health insurance while I was self-employed (for a long time, going bare). Some guy (he had a decent job) ditched me (hurt bad cruel horrible). A casual male friend called up the next week. Ma: "maybe *he* has benefits."

That did it for me: why on earth should I marry for health coverage, or any other stoopid monetary reason? I went out and found a job that offered them.

You're gonna be a lawyer, right? Take on some entry-level freelance legal work. Plenty of folks need help with legal filings at the county.

I'd do my desktop publishing at Kinko. Quite a few people would be in there struggling with fonts and papers. I'd help them, and they'd pay me. For a while it was steady and almost reliable work...better than picking up cans at a football game.

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Anyone know a nice rich gentleman who wouldn't mind sharing some serious $$$$ with me?

:rofl:

Do you have to turn every thread into an online dating venue, Budgie? :lol:

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I meant PLPD by "basic" coverage. I wasn't aware that you could get anything less than PLPD and remain legal.

I use my credit card for almost everything. I always pay it off each month, and I get cash back on pretty much everything, so it actually saves me money to use it.

-nb

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I meant PLPD by "basic" coverage. I wasn't aware that you could get anything less than PLPD and remain legal.

I use my credit card for almost everything. I always pay it off each month, and I get cash back on pretty much everything, so it actually saves me money to use it.

-nb

You can't get less than that an be legal. I won't explain what I was talking about so I don't seem like I'm selling (although isn't it like the architects discussing types of buildings?).

And research tells us that you spend more when using plastic, it's a fact. Paying with 6 $50's hurts more than swiping and signing.

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I meant PLPD by "basic" coverage. I wasn't aware that you could get anything less than PLPD and remain legal.

I use my credit card for almost everything. I always pay it off each month, and I get cash back on pretty much everything, so it actually saves me money to use it.

-nb

Same here, some people can handle credit cards and others can not. I use my credit card almost as if its a debit card and don't spend money that I don't or will not have in the next month and thats the only way I would recommend using a credit card other than for emergencies. Americas debt is becoming a major problem, we have more debt that ever before in our entire history and are treading in a situation we have never been before. I have student loans pilling up as do many my age so I can't afford to be in more debt than that.

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I enjoy listening to Dave Ramsey at times, although after a week it seems all the shows sound the same.

I have never had a major credit card and I'm 28, although I have a solid credit score built up through paid off car loans, and a few store cards. But of course I have zero credit card debt. Personally, I really don't know anything about finance though. I have never been a big time purchaser, b/c I never had the money to buy things with my student loan payments, and probably b/c of my Dutch Calvinistic upbringing. My only major debts are my student loans, and now our mortgage.

My lovely wife on the other hand :wub: is a financial guru, and I am blessed to be married to someone who is gifted in the art of budgeting. If it wasn't for her, I would probably use Dave Ramsey's method though.

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Do you have to turn every thread into an online dating venue, Budgie? :lol:

It's a numbers game, dude.

heehee

Truth is... I wouldn't know what the heck to do with money. I'm so happy with what I have. (Er. Don't have.)

Truly.

As for dating... I don't. :rolleyes:

Here's a philosophical question for you: Does money really matter? In the ultimate scheme of things?

Do it yourself, Va!

My mother used to harp at me about health insurance while I was self-employed (for a long time, going bare). Some guy (he had a decent job) ditched me (hurt bad cruel horrible). A casual male friend called up the next week. Ma: "maybe *he* has benefits."

That did it for me: why on earth should I marry for health coverage, or any other stoopid monetary reason? I went out and found a job that offered them.

You're gonna be a lawyer, right? Take on some entry-level freelance legal work. Plenty of folks need help with legal filings at the county.

I'd do my desktop publishing at Kinko. Quite a few people would be in there struggling with fonts and papers. I'd help them, and they'd pay me. For a while it was steady and almost reliable work...better than picking up cans at a football game.

I do work fulltime, and I do have healthcare benefits.

Trouble is, they keep chipping away at the benefits. A little higher co-payment here, a larger deductible there... know what I mean?

Something seriously needs to be done about the system (as if that hasn't been said millions of times).

And watch out for HSAs. They are seriously wrong.

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Do you have a personal budget process that you do every month? What about retirement goals? Out of debt (other than you house?) Would you say that your money management skills are good?

Personally, I am working on Dave Ramsey

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My life changed (for the better) when I discovered the thrifts. Second-hand goods are generally in excellent shape and quite serviceable, for a fraction of their original retail price. Sometimes they are brand-new with the store tags still on.

Good Will, Value Village/World (near Detroit), Valu Land, Salvation Army...and the independents. I buy almost all of my non-underwear clothing there, along with household items. It's good clothing; I wear it to job interviews.

A typical dress might be $5, and a jacket another $3. T-shirts, 85 cents up to $3. Pants, always less than $10. Although I tend to make (sew) fancier items, I once found a brand-new formal dress for $10. When I'd spend $20 at Value Village, the resulting bag was too large to carry.

For guys who wear suits, all you need to do is find one in your size, and there will be several more. (Yes, these might be estate sales, or formerly belonging to someone who was ill or old. Take a look at what they've got, and you'll soon drop any inhibitions over the source.)

Also have found suitable wedding gifts (picture frames are big), bedding, sporting goods (ice skates and snow toys). Cheap electronics (a radio for my desk at work). Bicycle jerseys ($70 new, less than $10 here).

When my namesake niece was in grade school, I found her a perfect-sized Raleigh bike in great condition, and it was pink. (Very important.) $3.00.

Growing kids? They can't wear out clothing before they outgrow it.

When I needed a nice white sleeveless shirt and nice black shorts for a summer concert, found 'em, paid less than $5 total.

The only problem is I need lots of closet space because I have way too many clothes. New policy: can't go shopping for new unless I take a bagfull to donate.

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Ebay! Yes! Ebay.

Just make sure not to exceed the price you are willing to pay (i.e., do not get caught up in the thrill of last-minute bidding). Make a bid and let it lie.

I have obtained wonderful furniture online for a fraction of the cost of going to stores. And no gas/time wasted trying to find precisely what I need.

Make sure to factor in shipping charges before placing the bid.

Even better, you can sell your stuff online.

Better still, donate your stuff to places like In The Image. It's for a good cause and it's tax-deductible as a charitable contribution.

I agree with Veloise's tips on thrift stores and estate sales. Auctions out in the country are fun and you can find some good deals there.

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And watch out for HSAs. They are seriously wrong.

Seeing as this is a money matters thread and HSAs are very economical, can you explain that comment in some more depth?

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Seeing as this is a money matters thread and HSAs are very economical, can you explain that comment in some more depth?

You bet. There is a huge hidden cost that most people do not see.

HSAs are great if you are young and healthy, do not have any (or little) out-of-pocket medical costs, no (or few) prescription co-pays, etc. because you can bank the money you don't use and make interest off of it.

HOWEVER: HSAs have very large deductibles which must be satisfied first before anything is covered. E.g., emergency room visit - you pay out of pocket with no reimbursement unless you have satisfied your $1,500 deductible or whatever.

And say you have $500 worth of prescription drugs you must pay for each month. You must pay the cost of the drugs upfront, submit the bill to the HSA and it will reimburse you -- IF you have already satisfied the deductible. That's a lot of cash to come up with out of pocket, and it has happened to me.

I have written my congresspeople about this poor excuse for health care insurance, and I have also brought it to the attention of the guy in charge of putting these HSA things together (I cannot remember who he is or what his title is... but he gave me the usual rhetoric: but you can bank the money! You can use the money you have saved in your HSA to cover the medical bills. Uh... how can you do that if you can't bank anything to begin with because you are paying off the dang deductible... which starts all over again the next year).

It's a vicious cycle.

See what I mean?

:w00t:

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