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Share Your Top Money Mgt Tips

Pinkie

Pinkie

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I've seen prices rise, while my (retirement) income has remained stagnant and my health insurance went poof! At this stage of life, I feel very securely middle class, but it took some doin', and still does. So, what're my top money mgt tips?

* Don't make financial choices emotionally. If I could alter this one for all my friends and family, they'd all be wealthy inside a decade. Stop saying "I need it", "I earned it", "I couldn't bear not to have it" until you first decide whether you can afford it. If you cannot, it doesn't make a helluva lot of difference whether or nor you want it.

* Don't keep money secrets. Tell your kids, in an age-appropriate manner, what the family budget is. Engage them in helping to hold down costs ("if we trim the food budget this week, we might could go see a movie", e.g.). As your kids grow up, teach them about checking accounts, credit scores, insurance, car buying, etc by allowing them to shadow you making such choices.

* Pay yourself first. You absolutely need an emergency savings account equal to at least three months' expenses and I cannot stress this enough: if you have a regular paycheck but refuse to do this small savings exercise, then no matter how much you earn, you are choosing to live with a heinous amount of stress and worry about money.

Same idea: my generation, the Boomers, is the last to feel confident about Social Security and Medicare, and we ain't all that sanguine. You must save for retirement and you must treat retirement as a bigger priority than your child's college. Do not ever, ever, ever borrow against your retirement to pay current expenses.

* Review your expenses at least twice a year, and renegotiate/reconsider all of them. You may say you cannot renegotiate your mortgage, but you can: if you took out an FHA loan to buy and have been in your home long enough to enjoy a 10% rise in value (or decline in the principle balance), you can stop paying mortgage insurance, which costs you about $100 for every $100,000 borrowed, per month. And equally important, you need to consider what home maintenance needs done and start saving for it -- I wish I had paid for a home inspection every year and completed the tasks the inspector said needed to be done, as I really am not handy, and never noticed any issues until something broke.

If your housing expenses are more than 35% of your net income, inclusive of insurance, repairs, etc. but not including utilities, then you should reconsider the housing choice you made. I know this cannot be a detached, unemotional decision -- but step back. If you're at or above 50% of net income to housing costs, the situation is not sustainable. Downsizing on your own terms, rather than being forced to move, is a far less traumatic event for everyone in your home -- especially for you.

Okie dokie -- now, I am anxious to hear from anyone who has successfully liberated themselves from the cost of internet and tv service. I try this at least once a year and so far, I haven't been successful; I'm still on ATT's U-verse service at about $100/mo.
 
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Here's what I do:

1. Create a spreadsheet of your monthly obligations, using your highest monthly payment for variable accounts as a point of reference (i.e., if you don't average your electricity billing, take the worst summer month and use that as your base calculation for monthly obligations), listed in order of due date. Utilize that information to create a monthly budget, dividing bills by pay period.

I use the calculations generated to determine what money I should have (on average) left over after every pay check. If higher than X-amount, the difference goes into savings. X-amount is my pay period spending budget, which I then divide by day to determine how much I can spend daily w/o going over budget.

2. Keep a cushion of a few hundred dollars in your checking account that is "invisible" money. If, for example, my account balance is $700, I automatically deduct $200 and act as if that money doesn't exist. Using this method, I have not overdrawn my account in almost 10 years.

3. Link a small savings account to your checking account. Most banks let you do this for free as long as you meet very easy requirements. Mine is free as long as I auto-transfer $30 per pay period into the savings account. No minimum balance, but I'm limited to 6 withdrawals every statement period. This is another protection from overdraft.

4. ALWAYS pay more than the minimum due on loans/revolving accounts. On your car note, it can result in a "free" month situation...but it will also just help you pay down the principle much, much faster and decrease your total interest obligation, too.

5. Take advantage of reward programs, coupon cards, and customer loyalty incentives. On average, my grocery bill is $180 a month for two people. This is down from almost $400, and all because of Tom Thumb's revised customer rewards program. If my bill is $90, it is likely that there will be anywhere from $40-60 in savings as well. We also get free food at restaurants by being members of their programs. Last time we went out to a Chili's-type restaurant we each had a beer and an entree and split an appetizer. Total bill was only $15 because we had coupons and rewards in our e-mail.
 
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All terrific ideas, Tessaesque, flowing from a few key strategies:

* If you don't spend money in a deliberate fashion, and try to save wherever you can, you will never, ever, ever have enough income. No one makes a big enough salary to spend in some free-wheeling style.

* A budget should be made based on at least six month's actual expenses, and preferably on twelve, adjusted for any rise in prices. My bank allows me to use their web site to catagorise every single purchase made using my debit card or my checks, and this habit has allowed me to detect such things as the loss of gasoline through theft that I otherwise would never have noticed. I know what I spend on food, on cigarettes, on frivolities, etc. and I can consciously choose to limit those amounts.

* As to revolving debt: this is not a fact of life. No one "must" use credit for anything other than to pay for a vehicle and to buy a home. Lines of credit secured by your home put your home ownership in play -- and a home that is 100% paid for should be part of every retiring person's plan. Payday loans are the devil incarnate and if you have one such, I say stiff the bastards. You likely have little or no reason to fear them, as most are too afraid of bad publicity to seek a judgment against you, and the hit on your credit report will be minor. Store cards are the pits -- you can count on interest rates above 25% and these cards should ONLY be used by someone trying to rehabilitate their credit. Bank credit cards are like a game of "gotcha!", using the small print to jack up interest rates, impose late fees, etc. But bank credit cards, more than any other type of credit, directly impact your credit score, as one factor that is considered is the difference between the credit you have been extended and what you owe. Don't close a bank card unless it has an annual fee, unless you first replace it with another bank card of similar size, especially at a time when your credit score is extremely important to you.

If you are financially stable, no matter how poor, you should aim to be consumer debt-free in 3 years or less and to remain that way all your life. This idea that "every American family has revolving debt" is bull**** -- my parents did not, I did not, and you young people are being sold a load of bull**** by the big banks. Living within your means is the only route to financial security. There's never been any other route, and there never will be.

* If you have revolving debt, including student loan debt, you can negotiate with your lenders for smaller payments, lower interest rates and even for a settlement of less than 100 cents on a dollar in principle due. You can hire student loan debt experts to counsel you and to work with your lenders, and you can get credit counseling agencies to bless you with a plan to pay off all revolving debt other than student loans. (Both a student loan counselor and a credit counseling agency will have custody of your funds, so do NOT choose anyone unless and until you have checked them out AND made sure they are properly licensed and bonded.)

* Use a credit union instead of a bank. If you pay $4/month for a checking account, and $10/month in ATM fees, and $70+ once a year for a bounced check, you're throwing away $238/yr in bank fees you could avoid. A credit union will offer you all the same services as a bank, except that they don't make mortgages -- but trust me, BOA could care less if you've been a longtime BOA customer when you go apply for a mortgage.

* If you have a mortgage and your interest rate is above these historically low ones we're seeing now by at least 1% point, and you intend to stay in that home for at least 5 more years, refinance. You'll come out of pocket far less than the savings you will realize on the interest -- and if you overpay your mortgage by the monthly amount you had paid before the refi, you might change a 30 year mortgage into a 25 or 20 year one. Just be sure you aren't paying anything for the "privilege" of paying in advance.

Debt is wasteful and expensive -- minimize yours.
 
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If you consider stiffing a payday lender, and that lender took a copy of your check before the loan was made, you almost certainly authorized an automatic withdrawal. To avoid this, at least close your checking account and get a new one at the same bank; even better, close it and get a new one at a different bank.

Paying what you owe to any lender is not a matter of morality; it's a business decision. Take the shame out and forget the "deadbeat" label; pay what you can afford and if, due to changed circumstances or bad decisions, it's less than 100% of what you owe, too damned bad.

Just be sure to pay child support, taxes and student loans as agreed (all three will work with you, if you are proactive in seeking an agreement), because those creditors have ruinous powers of collection.
 
These are all great ideas! What a fantastic idea for a thread! I smiled when I read about Tess's "invisible money." My way of doing it was to actually write a check to myself out of my checkbook when I had extra money. I'd throw it in a drawer, and when I had $100 or so, I'd go put it in the bank.

The best advice I think I can give people is to always live beneath your means. This especially applies to your housing costs. Whether you rent or own, make your choice wisely. One's rent/mortgage payment is generally their largest expense. And once you've made your decision, that expense is set in stone for quite some time.

Buying a home? Think small. Think economical to "feed." That monthly mortgage payment is just the beginning of your expenses. You've got utilities to pay on that larger home. A two-story's going to cost more to heat and cool than a one-story. And not by an insignificant amount either. Never-ever-EVER buy a home without getting a formal home inspection. And, for God's SAKE, don't let Uncle Louie do it!! A professional home inspection can save you THOUSANDS of dollars. How? If a furnace is deemed at the end of its useful life, you should expect the Seller to kick in a new furnace or some portion thereof as a cash credit at closing. Or adjust the price of the house by some amount you're happy with to account for it. Same with the air conditioner. Yeah, it costs $400-$500 to get a home inspection. If you can't afford that, you can't afford a home.

When you're comparing two homes that you like and wondering which one to buy, consider each's real estate taxes. Real estate taxes do nothing but go up, folks. If one's taxes are $1,500 and another's is $2,200, I'd give that $1,500 house Ten Likes! just for that. After you've bought your home? Learn how to read your tax bill. You may be over-assessed. Especially today when the value of homes has been dropping for the last four years. School yourself on how to protest your taxes and get your assessment lowered.

Ask your Realtor if she will chip in for a Home Warranty at closing. That will insure major components in your home for a year. I've seen my clients get brand new refrigerators, furnaces, air conditioners; new appliances. Have major repairs done for $100 with the help of that warranty. During your first year of home ownership, the LAST thing you need is to replace your furnace.

How to ask your Realtor for this? Tell him/her that you will NEVER look at a home without them. That you promise her loyalty and want to make her your Realtor for life. "In return for that, would you consider buying us a home warranty when we close on our new home?" I'm betting you'll get a big fat YES. If not, find another Realtor.

If you're renting, be the best tenant your landlord has. Pay your rent two days early. Be patient about repairs. Be mindful of other tenants' rights. When your landlord lets you know he's raising your rent by $50 a month? Negotiate it down to $25.

Here are seven words that will save you THOUSANDS over your lifetime. Ready?? Is that the best you can do? Here's how it works. After you've made the decision to buy something, make it clear that you're ready to purchase and quietly, away from other customers, say those magic words. Maybe he'll say, "Yeah, it is." Okay, you didn't save anything this time. Maybe he'll say, "Well, hmmmm, we have a sale going on next month, let me see if I can give you that price today." It works, folks. A month ago, I was at a craft fair and decided to buy a beautiful $85 handmade purse set with Swarovsky crystals. Seven magic words later, I paid $65. (Remember! Don't do this in front of other customers!) Later that same day, I bought two $15 bracelets. 7MWL? $20. This works best at independent stores, car dealers, those kinds of places. But it works!

If you have a cellphone, cancel your home phone. That saved me, in Chicago, $80 a month X 12 = $960.00 a year. (Save half!) And know what else it saved? Telemarketing calls!! Whoot!!

Do you have cable? Or U-Verse? Call your provider and say, "I've been looking at my cable bill and doing some comparisons. Do you have any kind of loyalty discount?" I make that call once a year. (Well, my verbage has since changed to, "My loyalty discount ran out. Can you help me with anything else?") Last call I made dropped my rate $30/month X 12 = $360.00 a year. (Save half!)

Don't be afraid to change your cable provider. If you have a choice of providers, call and find out what specials they have for how long. Compare rates. My next-door neighbor changes his provider at least once a year. ('Course Chicago suburbs have many choices.) Is it cheaper? Save half!

If you go window shopping? Stop it!! Become a hunter instead of a gatherer. Shop from a list. Looking at some major purchase? Control yourself, damn it! ;) Wait 'til it's on sale. Call and ask the store/department manager when it's going on sale. Stay out of WalMart! You know you should. You go in because you need towels for the bathroom and end up with $50 worth of **** you can't even recall buying a week later. If you going to WalMart? Just buy the damned sheets. ;)

I'm a believer in credit cards. But I only have one, and pay it off every month. I use the Chase Amazon credit card. It gives me dollars to spend at Amazon.com where, the last thing I bought for free was a coffeemaker and year's supply of filters. I still have $80 left to spend, thereabouts. I put everything I can on auto-pay through my credit card to help build points.

That's all I can think of right now, but I may post back.

Oh! I also believe in driving good cars. I'm just NOT going to put $1,000 worth of repairs into a car every year until it finally hits me up for $1,800 and ends up getting junked. You can buy a brand new Ford Fiesta for about $14,000. 28 city/38 highway.For three years, no car repairs! Whoot! Take care of it like it's your baby, and it'll give you tens of thousands of repair-free miles long after the warranty's run out. Just change the OIL every 3-5,000 miles, damn it! ;)
 
Pinkie said:
If you consider stiffing a payday lender, and that lender took a copy of your check before the loan was made, you almost certainly authorized an automatic withdrawal. To avoid this, at least close your checking account and get a new one at the same bank; even better, close it and get a new one at a different bank.

Paying what you owe to any lender is not a matter of morality; it's a business decision. Take the shame out and forget the "deadbeat" label; pay what you can afford and if, due to changed circumstances or bad decisions, it's less than 100% of what you owe, too damned bad.
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I don't agree with this, Pinkie. In fact, I couldn't disagree with you more.

The real answer is: Don't ever use a payday lender, for God's sake.

Not only do I think you first paragraph is fraudulent, but that kind of philosophy is going to spiral the average person out of control send send them down the chute of never-ending debt management.

Paying what you owe to any lender is both a business decision and a moral responsibility. Sometimes we get in trouble and can't pay what we owe. Then we attempt to work it out. Stiffing a lender by manipulating your finances is not the answer.
 
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1. Don't buy junk. In the wise words of Tyler Durden, "You're not how much money you have in the bank. You're not the car you drive. You're not the contents of your wallet. You're not your ****ing khakis." Spending money on a bunch of crap you don't need isn't going to make you happy. I prefer to drive a cheap car and live in a crappy apartment. Every time you are going to make a major, optional purchase, ask yourself if it will make you happy. If the answer is no, then don't buy it.

2. Save up at least 3-6 months of living expenses. You never know when you're going to have an emergency, or you lose your job. You can save yourself a lot of stress and a lot of credit card interest if you know that you're prepared for things that life throws at you.

3. Spend money on experiences and vacations. This may seem counterproductive, but it's a fiscally wise decision. Not only does it contribute to your happiness (unlike buying physical junk), it will also make you a more productive worker.

4. Take care of your health. A proper diet and exercise will not only save you money on medical bills and enable you to live longer, it will make you a more productive worker and earn you more money in the long run.

5. Get a job (or a side project) where your earnings are proportional to your input. If you started busting your ass at your job, and worked twice as hard as everyone else, would you get paid twice as much as everyone else? If not, why are you working at a job where your earnings are capped? At the very least, pick up a side project if you have time.

6. Invest in your education. Even though college tuition prices are in a bit of a bubble right now, I still think it's well worth it...especially if you go to a state university and study something which will help you get a job. Our economy is becoming more and more dependent on high-skilled jobs, for which there is a shortage of workers. You should take advantage of this by making sure that YOU are one of those highly-skilled workers.
 
More on the payday loan lenders: these guys are worse than the mafia and I feel NO GUILT in advising anyone how to walk away and leave them holding the bag -- but -- this advice is ONLY for someone who foolishly borrowed from them already. Mags is correct: to take out a loan you never intended to repay from Day One is a crime, and I am NOT suggesting anyone do that.

Okay, more tips:

* Buy your grocery items online, except for meat and produce. Amazon has a fairly extensive selection and anyone who has never had Amazon Prime can use it free for two months. It has several advantages, but chief among them is free shipping. Other online grocery stores exist, and some local groceries are offering online/delivery services. This is especially nice for anyone who has a small child or elsewise finds going grocery a misery.

* Use an online recipe finder/shopping list builder. As you go through the week, add to the shopping list based on what's on sale at the grocery and what you need, and use that list to buy -- never, ever go into a grocery to do a week's shopping without a list. I like allrecipes.com, but you cannot print in B&W from that site unless you buy a membership, so others might be better.

* There is no bill you cannot negotiate. Not a speeding ticket, not a utility bill, not anything -- but you will always do better if you approach them before the due date.

* DO NOT sign up for auto bill pay on any bill, apart from possibly car insurance which cannot change in price during the policy's term. Any vendor with your permission to auto-lift funds from your account is also empowered to take however much he likes, and if there's a mistake made, you will be the one stuck with the bounced check fees.

* Use a Dollar Store (there's a dozen different companies that sell this way) to replace the pop in to the grocery when possible. These stores are carrying coffee, cereal, soda, etc. are prices that often beat the big grocery chains, and shopping in one won't stress you as badly.
 
Pinkie said:
If you consider stiffing a payday lender, and that lender took a copy of your check before the loan was made, you almost certainly authorized an automatic withdrawal. To avoid this, at least close your checking account and get a new one at the same bank; even better, close it and get a new one at a different bank.

Paying what you owe to any lender is not a matter of morality; it's a business decision. Take the shame out and forget the "deadbeat" label; pay what you can afford and if, due to changed circumstances or bad decisions, it's less than 100% of what you owe, too damned bad.

Just be sure to pay child support, taxes and student loans as agreed (all three will work with you, if you are proactive in seeking an agreement), because those creditors have ruinous powers of collection.
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If you stiff a payday lender in my area by giving them a bad check or authorizing a withdrawal out of an account, you are less likely to be sued, and are more likely going to be arrested for uttering or larceny. Same if you are "never home" when the guys come out a couple times to pick up rental merchandise or you pawn the stuff without paying for it. Lots of gas stations use criminal courts to collect bad checks too.
 
Fisher said:
If you stiff a payday lender in my area by giving them a bad check or authorizing a withdrawal out of an account, you are less likely to be sued, and are more likely going to be arrested for uttering or larceny. Same if you are "never home" when the guys come out a couple times to pick up rental merchandise or you pawn the stuff without paying for it. Lots of gas stations use criminal courts to collect bad checks too.
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MANY District Attorneys are allowing collection agencies to use their letterhead to scare a debtor into paying off a bad debt, and IMO, this practice is absolutely reprehensible. Your county DA has a budget that is set by the county and funded by your taxes; they "lend" their stationary to a collection agency in order to generate "extra" cash, as the collection agencies kick back a portion of what they receive.

You have committed a crime, some version of theft, when you "utter an instrument" (sign a document) that induces another party to transfer property or to pay you funds today in exchange for a promise to pay them funds in the future. This is always presumed to be the case when you write a check that cannot be covered by your bank. (I'm not a criminal lawyer and state laws vary; I really don't know whether this presumption can be rebutted).

Don't do it. You have no idea the misery you are inviting into your life if you risk a criminal arrest.

Use a debit card, not a check, to pay when you shop and arrange your account at the bank so that if the funds in your account are not sufficient, the transaction will not go through. (If the bank makes a mistake and honors the transaction, you are immune from fees as long as you bring the account to zero by the end of business in a day or two.)

If you have a boatload of debt (rule of thumb: equal to or in excess of your annual salary), you should consider bankruptcy. You'll almost never come out of pocket for the attorney fees in a bankruptcy to such a large degree that you'd have been better off paying the debt. You'll have 7 years of bad credit, but if you don't need to buy a home, who cares? You'll still be able to buy a car, etc., though you may pay slightly more interest on the car loan.

STAY out of rental companies. If you rent a computer, you'll likely pay $1,500 for a used pc that isn't worth $200. Etc. Look for garage sale items, buy directly from the vendor or big box store, try and get loaner items or do without.

OTOH, I would encourage you to use pawn shops, both to raise cash and to buy on the cheap -- just do not buy guns, computers, etc. there -- anything that has a mechanical basis and that you might not be able to repair cheaply.
 
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Pinkie said:
MANY District Attorneys are allowing collection agencies to use their letterhead to scare a debtor into paying off a bad debt, and IMO, this practice is absolutely reprehensible. Your county DA has a budget that is set by the county and funded by your taxes; they "lend" their stationary to a collection agency in order to generate "extra" cash, as the collection agencies kick back a portion of what they receive.

You have committed a crime, some version of theft, when you "utter an instrument" (sign a document) that induces another party to transfer property or to pay you funds today in exchange for a promise to pay them funds in the future. This is always presumed to be the case when you write a check that cannot be covered by your bank. (I'm not a criminal lawyer and state laws vary; I really don't know whether this presumption can be rebutted).

Don't do it. You have no idea the misery you are inviting into your life if you risk a criminal arrest.

Use a debit card, not a check, to pay when you shop and arrange your account at the bank so that if the funds in your account are not sufficient, the transaction will not go through. (If the bank makes a mistake and honors the transaction, you are immune from fees as long as you bring the account to zero by the end of business in a day or two.)

If you have a boatload of debt (rule of thumb: equal to or in excess of your annual salary), you should consider bankruptcy. You'll almost never come out of pocket for the attorney fees in a bankruptcy to such a large degree that you'd have been better off paying the debt. You'll have 7 years of bad credit, but if you don't need to buy a home, who cares? You'll still be able to buy a car, etc., though you may pay slightly more interest on the car loan.
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I think threatening to prosecute someone over bad debt violates the Federal Fair Credit & Protection Act. In my area, the prosecutors and Judges HATE people using them as a collection agency, but the law is the law. Usually what happens is you are arrested and on your Court date if you have not paid in full, the Judge will let you pay right then and there or make arrangements to pay within the week, and the charge is dropped. If you do not pay, then you are guilty, have to pay fines and restitution and all that stuff as part of your suspended sentence. Don't pay up in the allotted time once convicted and you go to jail for your suspended sentence or until whenever the restitution is paid whichever is sooner. If the stiffed party starts down the civil path they cannot switch to the criminal so they have to stay on that road once it starts.
 
Fisher said:
I think threatening to prosecute someone over bad debt violates the Federal Fair Credit & Protection Act. In my area, the prosecutors and Judges HATE people using them as a collection agency, but the law is the law. Usually what happens is you are arrested and on your Court date if you have not paid in full, the Judge will let you pay right then and there or make arrangements to pay within the week, and the charge is dropped. If you do not pay, then you are guilty, have to pay fines and restitution and all that stuff as part of your suspended sentence. Don't pay up in the allotted time once convicted and you go to jail for your suspended sentence or until whenever the restitution is paid whichever is sooner. If the stiffed party starts down the civil path they cannot switch to the criminal so they have to stay on that road once it starts.
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IDK what the rules may be, even in my own state. I am comfortable advising people to do all they can to avoid bouncing a check and if they do, to contact the bank and the vendor on their own as soon as possible to make payment arrangements.

The bad debts being collected by collection agencies using a DA's letterhead can be anything from an unpaid medical bill to a "6 months same as purchase" retail purchase. The only type debt it cannot be is student loans, taxes and child support, but that's only because they each have their own collection powers that are as strong as can be.
 
Think of money as a tool, you know like a hammer and act accordingly. A tool will only work if used correctly. Same with money.

When you are first starting out forget about credit cards until you understand the concept of bills, debt and credit.

Keep track of everything you spend when you are first starting out. Know how to balance a budget and at the end of each year calculate what next years budget will look like base on past years spending. Keep this up for a very long time

Don't thing Gross think NET. Take home pay is what is real, Gross income is an illusion.

When you are young and filling out your 1040, make sure you have enough exemptions so that you get alittle back. Its a nice delusional reward for keeping your head above water.
 
If I could give advice to young people starting out, it would be this:

Live at home for two years before you get married and save money like crazy.
When you get married, do it on the cheap.
After you're married, wait for two years to have kids. Save your money like crazy.
Plan your fixed expenses to live on one income. (Housing/Car etc.)
Wifies! Stay home for 3 years with your child. And three years for your next. You probably won't have two cars and a 60" flat screen, but you'll do just fine.
Wifies! Go back to work if you must after your youngest is 3 years old.

That instead of having a baby at 17, being a single mom living in poverty, getting married to a bum and having two or three more. And living in poverty.

Ladies! Pick a life partner who will add to what you bring to the table; not eat off of it.,
 
Pinkie said:
I've seen prices rise, while my (retirement) income has remained stagnant and my health insurance went poof! At this stage of life, I feel very securely middle class, but it took some doin', and still does. So, what're my top money mgt tips?

* Don't make financial choices emotionally. If I could alter this one for all my friends and family, they'd all be wealthy inside a decade. Stop saying "I need it", "I earned it", "I couldn't bear not to have it" until you first decide whether you can afford it. If you cannot, it doesn't make a helluva lot of difference whether or nor you want it.

* Don't keep money secrets. Tell your kids, in an age-appropriate manner, what the family budget is. Engage them in helping to hold down costs ("if we trim the food budget this week, we might could go see a movie", e.g.). As your kids grow up, teach them about checking accounts, credit scores, insurance, car buying, etc by allowing them to shadow you making such choices.

* Pay yourself first. You absolutely need an emergency savings account equal to at least three months' expenses and I cannot stress this enough: if you have a regular paycheck but refuse to do this small savings exercise, then no matter how much you earn, you are choosing to live with a heinous amount of stress and worry about money.

Same idea: my generation, the Boomers, is the last to feel confident about Social Security and Medicare, and we ain't all that sanguine. You must save for retirement and you must treat retirement as a bigger priority than your child's college. Do not ever, ever, ever borrow against your retirement to pay current expenses.

* Review your expenses at least twice a year, and renegotiate/reconsider all of them. You may say you cannot renegotiate your mortgage, but you can: if you took out an FHA loan to buy and have been in your home long enough to enjoy a 10% rise in value (or decline in the principle balance), you can stop paying mortgage insurance, which costs you about $100 for every $100,000 borrowed, per month. And equally important, you need to consider what home maintenance needs done and start saving for it -- I wish I had paid for a home inspection every year and completed the tasks the inspector said needed to be done, as I really am not handy, and never noticed any issues until something broke.

If your housing expenses are more than 35% of your net income, inclusive of insurance, repairs, etc. but not including utilities, then you should reconsider the housing choice you made. I know this cannot be a detached, unemotional decision -- but step back. If you're at or above 50% of net income to housing costs, the situation is not sustainable. Downsizing on your own terms, rather than being forced to move, is a far less traumatic event for everyone in your home -- especially for you.

Okie dokie -- now, I am anxious to hear from anyone who has successfully liberated themselves from the cost of internet and tv service. I try this at least once a year and so far, I haven't been successful; I'm still on ATT's U-verse service at about $100/mo.
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I have a tip for all *you* married guys out there.....

Never tell your *now/present* wife how much, you're really worth.

*If or when* the marriage goes bad....at least you got something to fall back on and not wind up sleeping on some park bench
 
All my big money regrets are rooted in approaching money issues with emotion, rather than with rationality.

1. Buy work clothes and jewelry and make up that you budget for, fills your needs to look professional and will last, but is not extravagant. Work is work; it's not dating, partying, socializing, or any other activity. Even a company's general counsel can get by with about 5 high-quality foundational pieces and some quality accessories. Don't stand in front of the Chanel counter with your mouth hanging open, letting a saleslady upsell you on the theory that how you look will guarantee you success at work. Don't buy a piece of clothing you don't expect to wear at least once a month for at least five years, and forget buying gold jewelry for work. No one is going to promote you because you wear 22 kt gold bracelets.

2. Stop telling yourself that you and your family don't deserve financial security and success. I'd see an ad for financial planning services, etc., and think "not for people like me". Hogwash! Financial planners who get paid by the hour will be delighted to have your business no matter what you earn, and an hour or two a year will pay off like a slot machine for you. And while I can't imagine young women still have this problem, don't wait on a man to support you -- take your life seriously, or no one else will.

3. Don't stay in a job you enjoy but are underpaid to do. This one is very tough, as most people -- especially single women -- see staying put as the safe, conservative thing to do, and some women (like me) will work for a pat on the head just as hard as they would for a $100,000 salary bump. Join LinkedIn and use it to price your services; if you are significantly underpaid, demand more from your employer or start looking, or both. If you see a business opportunity, don't wait for someone else to work it and hire you -- form a business of your own and pursue it. Nothing says you have to quit working at your job immediately after incorporating your business.

4. Make a plan; actually, at least 3 plans. One year, five years and retirement. Involve your kids and spouse, if you have them. Want to be debt-free? Have a child's college paid for? Replace the car? Take a vacation? Whatever your goals may be, write them down and make a plan to pay for them -- unless you do, you will never get them. Goals like buying a house require significant research into costs, and those costs must be known and budgeted for or the dream is beyond your reach.
 
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Barnes & Noble today announced they have joined a long line of vendors and other businesses in suffering a data theft that potentially affects thousands of their customers.

Barnes & Noble Says Customers May Have Had Credit-Card Data Stolen - WSJ.com

This is not exactly like identity theft; when you have your identity stolen, the thief will open new loans in your name. Here, your exposure is the credit limit on whichever credit card you used at this bookstore, but for some people, that can be upwards of $20,000.

You should anticipate that you'll be victimized in this way. Use a credit card that has a very small limit, or a debit card that is limited by your bank balance, or a prepaid card you load online for routine shopping. Ask your homeowners' or renters' insurance agent if you are covered for losses due to data theft, and if not, what that coverage will cost.

I don't especially value "identity theft protection"; I fail to see what these companies can do for you that you can't, for less -- order and read all three credit reports on you at least twice a year, and more often if you have lost your wallet or otherwise are made anxious about this.

Many people believe they won't be liable for debts that a thief takes out in their name, or charges that a thief puts on their credit or debit card.

That is WRONG. No big financial institution is going to insure you against theft losses even if the data is stolen off their servers. Limit your exposure and insure against any losses you could suffer but cannot absorb.
 
Pinkie said:
Many people believe they won't be liable for debts that a thief takes out in their name, or charges that a thief puts on their credit or debit card.

That is WRONG. No big financial institution is going to insure you against theft losses even if the data is stolen off their servers. Limit your exposure and insure against any losses you could suffer but cannot absorb.
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Respectfully, I think you're incorrect here. Following is liability for credit cards:

Under the law, your liability for unauthorized use of your credit card is limited to $50. If someone steals your card, for example, your credit card lender can charge you a maximum of $50 no matter how much the thief has charged on your card.

As soon as you know of the unauthorized use of your credit card, call the lender to make a report. If you call before unauthorized charges are incurred, you cannot be charged even $50, since the lender can take steps to cancel your card and send you a new one.
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http://www.nclc.org/images/pdf/older_consumers/cf_credit_card_rights.pdf

Debit cards subject the consumer to more liability. Debit card holders take note!!

With a stolen debit card (or a stolen debit card number and PIN), you are protected as follows (source: Federal Reserve and Federal Trade Commission):

Your loss is limited to $50 if you notify the financial institution within two business days after learning of loss or theft of your card or code.
But you could lose as much as $500 if you do not tell the card issuer within two business days after learning of loss or theft.

If you do not report an unauthorized transfer that appears on your statement within 60 days after the statement is mailed to you, you risk unlimited loss on transfers made after the 60-day period. That means you could lose all the money in your account plus your maximum overdraft line of credit, if any.
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Debit Card Liability - The Risks of a Stolen Debit Card

As far as loans taken out fraudulently in your name, you are not responsible for them. But the burden of proof is on you to show that you were scammed. That is a lengthy and complicated process that can take MONTHS which is why these credit-alert companies have come into existence. And many of them do little, if anything, to really help you; though they may guide you through the process.

Want to protect yourself from fraud and theft of this type? Call all three credit bureaus and put a "fraud alert" on your record. No one will be able to open credit or get a loan in your name without your knowledge and a special verification process. The downside to this is that it complicates YOUR life when YOU want to do same. But, in my opinion, if you are at all concerned about this happening to you? Put a fraud alert on your credit file.
 
Live one rung down the economic ladder than you can afford and you will retire one rung above where you hoped you'd be.

Go to community college first unless you have a scholarship/great FA package;
Live cheap when you are in college;
Always buy a newer used car or a clunker until you get to your last car--they have much cheaper carrying costs like insurance/depreciation/interest than a new car;
Buy a fixer upper or a smaller house or a house in a poorer neighborhood than you think you can afford;
Stay away from credit cards--that adds up quick and most of your minimum payments go to interest;
Double up on your debts with the highest interest first and try to knock them down one by one;
Avoid ever being late on any bill EVER--you don't pay yourself first you pay your creditors first even if you have to eat dollar menu for a week or two.
Store brands; coupons; comparison shop; stock up on sales on regular things that will keep; Walmart clothes are fine for everyday life; rent/borrow games/movies; wait an extra year or two and that must have gadget will be insanely cheaper usually.

GIVE TO THOSE LESS FORTUNATE THAN YOU--appreciating and helping others will make you feel ten times better about where you are, no matter where you are.
 
MaggieD said:
Respectfully, I think you're incorrect here. Following is liability for credit cards:



http://www.nclc.org/images/pdf/older_consumers/cf_credit_card_rights.pdf

Debit cards subject the consumer to more liability. Debit card holders take note!!



Debit Card Liability - The Risks of a Stolen Debit Card

As far as loans taken out fraudulently in your name, you are not responsible for them. But the burden of proof is on you to show that you were scammed. That is a lengthy and complicated process that can take MONTHS which is why these credit-alert companies have come into existence. And many of them do little, if anything, to really help you; though they may guide you through the process.

Want to protect yourself from fraud and theft of this type? Call all three credit bureaus and put a "fraud alert" on your record. No one will be able to open credit or get a loan in your name without your knowledge and a special verification process. The downside to this is that it complicates YOUR life when YOU want to do same. But, in my opinion, if you are at all concerned about this happening to you? Put a fraud alert on your credit file.
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Last year, my bank notified me that my debit card data had been stolen off their server and my bank REFUSED to accept any liability for a fraudulent charge, if one was made. It was a subsidiary of the Royal Bank of Scotland, and while I agree with you, Mags, the bottom line is, if the cost of insuring against these losses is modest, that's far more secure and less stressful than trying to hold some huge bank's feet to the fire.

More importantly, an identity thief can open loans other than credit cards in your name: mortgages, car loans, lines of credit, etc.

BTW, the sub of Royal Bank of Scotland I was using is no longer my bank.

:)
 
Build a portfolio of quality providers you can hire when the need arises. Over the years, I have hired housekeepers, maids, landscapers, plumbers, electricians, roofers, painters, financial planners, car mechanics, tax advisors, carpet cleaners, and on and on. I have a housekeeper now, and I couldn't live as well without her -- she does all my heavy cleaning, yard work and interior painting, and the money I pay her is feeding her kids, so she's wonderful to me. You have to be selective about who you hire to help with your kids, home or money, but you'll find superior people if you look for them before an emergency arises.

You do not need to be wealthy to hire these folks. It can and does often make good financial sense for a working poor family to hire help, if only for an hour or two.

When my ex and I first separated, I stayed in the family home. I gave it to him very shortly thereafter, because it was on a steep hill and I couldn't cut the grass. WHAT a dumb reason to make that choice! There are people who will cut grass for money. There are people who will shovel snow for money. Don't leave a home you can afford for such reasons without considering these alternatives first.

Know your strengths and weaknesses, what needs your family has that you cannot meet, and what your child's changing needs may be. Create your portfolio of reliable people before you need it, and spend your dollars wisely on such people -- but -- don't be pennywise and pound foolish. If your child needs a tutor, it may be well worth doing some overtime or giving up cable to pay for that person's services.
 
One other thing I do:

I have my auto and home owner's insurance deductibles saved and put away, for use ONLY should a claim arise (my HO insurance actually has two deductibles...one based on wind/hail damage and the other based on pretty much everything else...so I saved up the higher of the two). That way, if the unexpected happens, we aren't draining our regular or retirement accounts to cover costs.
 
If I'm broke, I ask myself "Do I really need it, and can I afford it?" and if I have some spare cash at the time, then the questions become "Will I use it, and is it worth it?" I'm a sucker for daft gadgets, but if the answer is no to any of the above questions then I usually resist!

Generally, having savings and debts is silly, especially if inflation is higher than the savings interest. If inflation is 5% and your savings pay 2% then you're losing 3% per year. Better to use the savings to pay off the debt costing you 15-30%, such as credit cards. You "lose" the savings, but you lose the debt and gain on the payments too.
 
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As I mentioned, I have no health insurance anymore, and this has forced me to pay cash for services, which obviously is not sustainable should anything dramatic happen. Yet I get excellent care and I have no anxiety.

What's my secret?

Sadly, you are far better off to be completely uninsured than you are to be underinsured, so if your family has trouble finding doctors and hospitals that will accept your cut-rate insurance, you might consider letting it go and seek what is available as a uninsured person.

If you live in a major metro area, you probably have at least one taxpayer-supported/charity hospital that will furnish you with medical care, drugs, etc. at prices you can afford provided you go see their financial counselors in advance and prove your need. This may not be a long-term plan; I expect these systems to be overwhelmed at some point -- but it is still true today.

The hardest things to get when you are uninsured are eyeglasses, hearing aids and dental work. So here are some ideas:

* If you have a hearing deficit, see the ear, nose and throat guy affiliated with your charity hospital. Most middle aged people suffer deficits severe enough to interfere with functioning, but most can be remedied to at least some degree via office procedures rather than via hearing aids.

* There are low cost eyeglasses stores; American Best charges $69 for an exam and 2 pairs of glasses. I've used them and I have no complaints.

* Dental care is a very hard nut to crack. Don't assume that dental colleges or charity hospitals will charge less than a private dentist. There are dental credit cards available now, though the interest rates are mildly obscene. You might succeed at locating dental insurance privately, but this rarely pays a net gain before year two. Your best bets are a private arrangement with a dentist who likes you (usually not more than 60 days same as cash) or finding work with great benefits. Many retailers now offer a full complement of benefits even to part-time employees, most noticeably, the big box stores. Working for insurance seems like a bad bet unless that insurance is paying for $20,000 in care a year for your family.

Guard your health! Drive defensibly, eat a balanced diet, get some exercise and sufficient rest, etc.

Don't use the ER for a nonemergency -- the bills are horrendous and hospitals are not writing them off like they used to. Use a Doc in a Box, or better yet, find a GP who will allow you to pay 30/60 days same as cash.
 
I'm bumping this up again.

Ms Pinkie started a great thread here. Share your tips!!
 
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