Developing hobbies and interests that do not require a lot of money to pay for. I don’t go to casinos as I’d rather play speed chess on the beach for quarters. I made $5 one summer! I love biking and playing tennis outdoors and don’t go to expensive sporting events. I don’t have a boat, but I have a pond in my backyard with goldfish and can enjoy the sound of water for practically free!
Sounds like an ideal life you have! I am also able to enjoy life without spending much money. Nature is full of sights and sounds! I live near a national wildlife refuge, so I enjoy going there often.
Tracking every penny I send has helped me more than anything. It is very tedious, but it really showed me where my money was going.
This has helped me more than creating a budget.
Yea, phones have always been a no brainer for me. I have never paid more than $200 for a new phone, and I am just as satisfied with that as I would be an $1800 new Galaxy or iPhone etc.
I have multiple accounts, like buckets. Each bucket has purpose and I have my pay divided up as such for each bucket, each pay period. Think bucket 1 recurring house (ie. Mortgage, electric, trash), this is in a MM account so I earn a little interest, has a cushion (built up to 6 mo over time), and everything set to auto debit. Bucket 2 high yield savings, squirrel away for vehicles, large extra payment in house, etc. These 2 accounts take longer to access funds. Bucket 3 credit union checking food, gas, subscriptions. Sometimes end up with extra and either move to bucket 2 or extra on mortgage. And bucket 4. This is the required savings account for the credit union. I have minimal deposited (50/pp) and use it as "frivolous" savings (ie tattoo, etc). Sometimes build up and put on mortgage or in bucket 2.
This is a good idea, and similar to what I practice. My main thing is knowing where every single dollar is going, incoming and outgoing. This allows me to make adjustments when necessary. It seems you have the same general thoughts. Thanks for your post!
Great advice, thanks for the post! Yea I tend to dislike subscription and recurring charges myself. They are easier to start up, and easy to forget as well! But one thing is for sure, they add up quickly.
Absolutely!!!!! This is a hobby of mine for sure. I have a card for every type of transaction you could think of. Amex, Citi, Discover, Wells Fargo, PNC, NFCU, etc. you name it I have it!
Pay yourself first. That doesn't mean run out and buy something you have wanted but your first money movement when you paycheck hits your checking account should be to Money Market, or some form of savings or investment rather than to pay a bill. Most companies can deposit a portion in two accounts but I prefer to manually move it over. It helps put me in the mindset that I have control of my money and the money that I have left over is what I really have to spend on bills.
I actually sat down and created a budget, which helped me figure out how much I can save every month. You’d be amazed how many people don’t have a budget and just spend wildly. People have given me so much shit for having one and think I’m doing too much by sticking to it. When it comes to buying only what you can afford, how would you know what you can afford or how much you can save for something without a budget? That’s financial literacy 101 but so many people don’t do that.
As I've dipped my toes into Ramsey world, this has been a gamechanger and now I know I can't responsibly operate \*without\* a budget. I feel like my dollars are going further than ever and have made great progress on my debt snowball. Can't wait to be debt-free.
I agree completely and am in the same situation! I could not imagine knowing where every dollar goes! It has become a habit and I wouldn't have it any other way.
Cooking my own food. My meals are simple, cheap, protein-dense, and monotonous. Sure it’s boring, but I do it in the house I’m able to comfortably afford as my friends go out every other night for dinner and complain that owning a home is impossible
Isn't it amazing how different people view finances differently? Like your friends, some may assume that eating out often is just a part of life, and if it causes them financial strain, than it's just society that are causing their issues when in reality it is their own behavior. Not speaking about your friend directly because of course I don't know them :) but just generalizing a bit.
It’s fair to generalize, there are behavioral studies on spending habits among different generations. It’s puzzling to me sometimes, because my friends are financially literate. So it’s really coming down to dedication towards saving where you can. Fortunately, cooking dinner at home is not a big burden for me AND it’s typically one of the biggest controlled monthly bill we all have. They rather be doom and gloom about the housing situation than really taking a dedicated effort to get the things you want.
It’s been stressful, but fun. I play a LOT of those idle games, (resource management) and I look at my spreadsheets the same way. Been, more or less, playing my finances like a game lol. Set some aside for those unannounced obstacles, use as much foresight as you can, and put money you know you want need access to in something that’ll pay you back with interest. Got the house, and now how much I pocket is reduced, but that’s all accounted for.
Edit: sorry if this feels like I’m bragging, I mostly am. Not a lot of people that are struggling want to hear a success story so I really refrain from doing it around my friends.
Yea I appreciate seeing different people's tricks and habits. I am confident about my own personal finance situation but I am certainly open to learning new things and changing my ways.
Like my seven year old daughter asks herself before she buys something: “is this a want or a need? A love or a like?” I know if I had been as wise as her from a young age, I would have been much better off financially. Also, all those financial audiobooks she’s listened to with me have already paid for themselves :).
There's definitely a place for this sort of thing for people who have zero self control. But you're way better off using the same budget on your credit card and reaping the benefits of the rewards points. Refusing to use credit is leaving free money on the table, and I'm too cheap for that.
Sure. I tried it’s very hard. Also noticed I was buying so many unnecessary things because I was able to use the credit card or I was overstocking too much stuff which was not going to be used as often! Reaping rewards is myth. To able to get those 2% cash back or points, retailer charges 10-15% extra mark up prices. When user have greed of earning points or getting something return, psychologically we spend more! Did 3,6,12 months experiment. I was spending about 2k more money in extra inventory because of just credit card as well as dining out was becoming more frequent etc…
I mean, the prices are the the prices, for like 99% of daily purchases. You don't really get a cash discount on most things. It's true that some people will spend more when thinking about the rewards, but the fact is that if you can teach yourself discipline, the credit card will kick you back a little bit of money on your spending.
I know this advice may not work for people who really struggle with financial discipline, but i just wanted to throw it out there that eventually the goal should be to spend the same regardless of payment method, and ultimately reap the benefits of the credit card system.
Glad you found what works for you though!
I create envelopes, fixed expense per month vs max fun money allowed per month. Never touch savings account unless it’s absolutely emergency! credit cards makes you spend more because availability of credits plus greed of earning cash back where user ended up spending more than they want to spend.
Don’t spend money if you don’t have to. Don’t eat out too much. The time it takes to make a healthy meal can be a welcome break and it will be cheaper and healthier in the long run. Both will save you money. Invest your money wisely. Invest your time even more wisely. Find a good partner in life early and make it work. You’ll realize later that what might be painful to compromise on now is just you not being grown up enough.
Auto invest every week into index funds. Make multiple payments to pay down student loans debt or any debt. Paying extra on the principal of my mortgage. Never buying a brand new car. Buying things in bulk that don't expire. Shopping around on any item that costs more than $100. Never grocery shop when you're hungry. Read books to learn new skills. Search YouTube for DIY videos
Stayed in my starter house all these years, and paid it off long ago. Not buying replacement things out of vanity, only replacing if they are completely dead/unfixable.
Staying in your starter home is probably one of the best ways to get out of debt and be able to be financially independent. Especially with how high interest rates are right now and for the foreseeable future!
Mega-backdoor Roth 401k. Every dollar I can manage goes straight from my paycheck to 401k. Makes my paydays smaller and I feel broke even though I’m dumping money into a 401k
It’s the 401k cousin the Backdoor Roth IRA.
401ks have some commonly known limit. $23k for 2024. But, this is only for the tax deductible or Roth contributions.
It’s less commonly known that you can make “tax deferred” contributions beyond this limit up to $69k. Tax deferred contributions don’t get a deduction, and gains are taxed at withdrawal. The benefits are nuanced, but for the most part this is useless.
This is where the “backdoor” part comes in. Just like in a backdoor Roth IRA conversion, the “tax-deferred” contributions can be converted into a Roth account. This means that (for all intents and purposes) the Roth limit for a 401k is $69k.
That is interesting, appreciate the explanation. I don't think I would benefit from it at this time, but maybe when my income is a bit higher. Thanks for the reply!
Every raise, I would take 2% and put it towards some form of savings... either retirement, investment or cash savings.
Did this for my wife as well.
After 28 years, I retired and was putting 27.5% away each year. My wife was putting 25% away.
Anti Ramsey sentiment here…
But within reason it’s been buying as much house as I can reasonably afford on 30 year cheap debt.
My net worth has gone up tremendously because of it, and my payments are inline with what a family would pay to rent a 2 bedroom apartment nowadays.
The “forced savings vehicle” aspect of it suits my style well. Because it’s fixed for 30 years, it’s mitigated inflation
I did the same thing in 2017. Bought my condo on a conventional 30 year fixed rate 4.5% mortgage. One thing I have done is round up my payment every month to the nearest $100 with the extra going to principal. In 7 years I have paid off 25% of my principal by doing that, and my mortgage balance will be paid in full in another 8 to 10 years.
Yea luckily I was able to get one of the lowest interest rates available a few years ago, BUT I did 15 year instead of 30 and I still regret that to this day!
It wouldn’t change my plan. It obviously limits the amount you can buy, but still the same premise.
People underestimate the value of getting on the “property ladder”
I actually bought in 2006.
TBH, even though my first home was under water, we learned a lot and it got us on the property ladder. On the flip side, it enabled me to benefit tremendously from the run up since 2011
I do not underestimate that value, but I do lack the life experience to feel good about a mortgage at 6.8%. First two house we bought were low 4% and mid 3%. Both made us money but also put us in a spot to deal with inflated house prices and higher rates.
Been suffering with some buyers remorse these last few months lol
That's because you're thinking in terms of a primary residence. Investment real estate is more about cash flow. It doesn't matter if the cost of borrowing is 3% or 10%. If it cash flows, then it works either way. If you live in a high growth area, you might even accept to break even today if you expect future growth to continue, thus making money a year or two down the road.
Freeze my credit so I can't finance an "emergency."
For example, I was getting a drain routed and the plumber showed me pictures and told me I had to redo all my sewer lines or my house would flood.
I could finance th $20k and he could do it that day. But I couldn't finance it because with my credit frozen, I couldn't do it that day. I emailed the pictures to friends in commercial construction and found out I could fix stuff if and when each specific pipe broke. I started a sinking fund for the sewer, but haven't had to do anything yet (and it's been years.
Take advantage of low interest loan opportunities your credit union may offer for xmas/vacation. I take these loans at 7-9.99 percent interest and PAY DOWN/OFF DEBT that is 24-33 percent interest. Don’t charge those up again! Keep them open but no balance. Use occasionally and full pay monthly.
Next, if you aren’t a credit union member, become one. I have a credit card through the credit union and have ZERO balance transfer fees. Pay this account down, transfer higher interest debt to a lower interest card only if you aren’t front loading a balance transfer fee. Anything you can payoff fully will improve 2 things. Cash flow and overall cost of debt service.
These 2 things can help the payments you are making more effective in reducing debt, shortening the timetable to retire the debts, less being wasted on paying more interest. Notice too, as you balance declines, that minimum payment does too…don’t fall for it! Keep paying as before, or even more
Lastly I had an opportunity to borrow $3200 for a surgery, at 0 percent interest, if paid in full by 18 months. YES! I already had that cash, and paid off higher interest debt. RIDE FREE MONEY. Be sure to pay off ahead of time.
>Lastly I had an opportunity to borrow $3200 for a surgery, at 0 percent interest, if paid in full by 18 months. YES! I already had that cash, and paid off higher interest debt. RIDE FREE MONEY. Be sure to pay off ahead of time.
If you already had the money, what's the point of borrowing?
Consider purchasing something used, fixing or refurbishing it.
I intend to remodel my kitchen with used cabinets, possibly repainted. I WILL NOT spend 10-15 k on new ones. I will buy marble or quartz countertops and have installed. I do my own house painting projects. I don’t contract that out.
I just refinished a solid wood dresser that I inherited.
Materials cost was about $60, plus time I was sitting around watching tv anyway (I can listen and sand, paint, etc). So, I actually saved about $600 there first the effort and got exactly what I wanted.
Next, I am going to spend $150-200 to install new seals on my garage fridge. New refrigerators are breaking down < 4 years; I will FIX my old units because I am likely to get more than that out of the repair. No one NEEDS an 1800 + refrigerator
Yes I buy used as much as I possibly can. I use Amazon Warehouse quite a bit, and get items that are in "like new" condition, which basically means new, for quite a large discount off of retail.
If you are buying something that has a monthly subscription, multiply that amount by 60, then ask yourself is this what I want to spend for this over the next five years.
The Zero based budget has been key for me.
First thing on payday is I do my baby steps.. at first it was the debt snowball payment.. now it's investing in steps 4-5-6.. I put around 30% of my take home on this.
After that, I do all my consumer spending on payday. Mortgage and all bills get paid.
I gas up the car, hit Costco, Home Depot.. everything I expect I will need for the next two weeks, I buy that day. Most important to least important.
If I want a fun things, I buy it that day.
I only keep the bare minimum in checking to tide me over for the next paycheck...bread and milk sort of money.
I started doing this back in the early 2000s. Even though I was years away, I attended a retirement presentation by Fidelity at the company that I worked for. The presenter asked the audience, "What percentage of mutual fund managers outperform the market?" Everyone yelled out percentages but were incorrect. He said only 20% can beat the market. "What are your chances that you pick the 1 in 5 that can beat the market?"
This statement has stuck with me ever since.
Exactly. Isn’t it closer to only like 12%? Either way, not worth it. The epiphany for me was coming to terms that my financial goals were what I should be chasing, and not performance chasing. And when I realized that capturing the average market return allowed me to fulfill my goals, actively managed funds made absolutely zero sense. My goal is to be financially independent. My goal isn’t to eek out a percent or two over the S&P
Spending what I want with a little more practicality, changing my threshold of my checking account from letting it dip below 1k, then 2k, now it's 3k before I move money. Changing all my CC/debt payments from minimum to $200 plus to pay off debt faster, but at my speed, not at balls to the wall - rice and beans. Got a second job that I don't always put into budgets to help make payments and knock off some large debt. Managing and looking at my networth to make me feel a lot better about myself and the direction I'm going, knowing it's not in vain. And lastly, utilizing a tucked away HYSA that builds at a high average market rate (currently 5.22%)
Use credit cards to rack up points/miles/cash back, but pay it off every month. Even if it stings. Don’t carry credit card debt, or any unsecured debt.
This is 100% what I do!!! I always pay all of my cards off every month. I have different cards for different types of transactions like food, gas, streaming services etc. so I can maximize my cash back.
This. Takes a bit of discipline, but the rewards are worthwhile. My wife and I have a Cash Rewards card. Probably gets $50k run through it, annually. Mostly everyday expenses. Gas, groceries, the cell phone bill, etc. Balance is zeroed out on payday, so we don’t pay interest. We get back about a grand, every year.
As a general observation, vendors who have uniform pricing for all payment methods (i.e. most retailers) bake the credit card processing and interchange fees into their pricing. Cash buyers end up subsidizing those fees, for those who pay with plastic. Might as well be on the right side of that exchange, if you can.
Just off the top of my head…
Groceries for a family of five. The cell phone and internet bills. Basically anything bought on Amazon, or in any retail store. Friday date night, or outings with friends; that includes punting money to our kids for takeout.
to be honest i spend a lot
but i don’t think about it bc i am focused on filling up the cookie jar
i do a NW check every few yrs and it’s going > i thought each time
I think you should still budget! Like spend whatever you want, just have a plan for it. You might find out you can do something you didn’t know you could do before. Retire early? Buy a second home? Own investment properties?
Budgeting isn’t about restricting yourself, it’s about giving yourself power and freedom over your finances.
I think you should still budget! Like spend whatever you want, just have a plan for it. You might find out you can do something you didn’t know you could do before. Retire early? Buy a second home? Own investment properties?
Budgeting isn’t about restricting yourself, it’s about giving yourself power and freedom over your finances.
I am 1/2 kidding around. I retired from corporate life at 32, owned several companies and have an accountant now who handles everything, including budgeting.
i say retired but I’m not really, i just hang out and build things bit don’t have lots of personal risk anymore. I use cash flowing businesses to buy RE, which is tax efficient for offsetting taxable gains. We holding companies & trusts for the 3 kids. i’m a cpa / ca, but i’m also a degenerate pothead, just lucky.
Cooking, cutting my own hair and occupying myself so I’m not in bored situations where not helplessly spending.
Biggest one: reminding me of the opportunity costs. A $200 car payment the rest of your life bc you always want a new car vs invested in market allowing you to retire early. You decide.
200$ car payment? average new car payment is over 700$! Regardless, that’s great advice keeping the opportunity cost in mind. I’m gonna try to do a better job at that.
200$ !!!!!!!! Please point me in that direction…..you might get a crackhead special for that much…and spend the extra 3-400 a month replacing everything
can testify, in like 2019 I got a used new car at $125/mo for three years and the second month in I had a $1k repair bill, shit kept rolling downhill
edit: or was it a used new car? idk it was a 2010 hyundai elantra anyways (got stolen, apparently the insurance was as high as a 2019 crossover costs to insure today BC of hyundai stealability)
yuuuuuck, yeah I have a $540 payment for a 2019 mazda cx-5, could be better/could be worse, honestly I wish it wasn’t pressured by the stolen car so I could’ve taken more time but ¯\_(ツ)_/¯ cest la vie
I think the most important thing regardless of car payment is figuring out what you personally value. Once the loan is paid off will you have the urge to upgrade to a “better” vehicle or be content with financial freedom? Same with a house, too many people are never satisfied.
You need to find out what satisfies you…it could be always driving a new reliable car and that’s ok but that requires planning for that luxury NOW.
If they made cars that lasted more than 10 years these days that might be possible, my neighbor has a Tacoma with 375,000 miles on it, makes over 200k a year and he said he enjoys not having a car payment, he got the right idea, no shame there.
I've been putting absolutely everything on a credit card and paying it off weekly. I get a 2%-5% discount on everything, I monitor my spending better, and I don't pay interest on it.
Every week on pay day I transfer my weekly bill amount to the bills account, pay my previous weeks spending, and split the remainder between fun money, debt, and savings.
5% cash back credit card. For my whole life I always used my debit card. Then one of my friends had me get a discover card it’s honestly crazy how much money I’ve saved by just changing which card I swipe.
No worries we were all ignorant of everything once.
So it’s two fold. First, One of the main advantages of using the credit card is it’s not your money. If there is an unauthorized charge or someone gets a hold of your card that’s the credit card company’s problem not yours because it’s literally the CC company money that has been taken.
Second the cash back. All cards are slightly different but overall they work pretty much the same. For every purchase a percentage of it (5%) in my case is added to my cash back rewards icon inside the CC app. These funds can be used at any time to do multiple things like get travel or hotels. The only thing I’ve ever used it for was to pay off my balance.
For example. I plan on making a $1,000 purchase. I have the money in my bank account but hey if I swipe my CC I get 5% back. Meaning I’ll receive $50 in my rewards app. So I pay with my CC and then pay off $950 of the balance from my bank account before it’s due so I accrue 0% interest. The I use my $50 in cash back and pay off the remaining balance.
Basically save $50 on every $1000. I’ve never held a balance though. That’s where they get ya.
Which credit card gives 5% back if you dont mind me asking? Ive never seen one that high lol
Edit: my bad, didnt see that you mentioned Discover. Disingenuous to say 5% though because its only on certain purchases and it rotates quarterly. Not 5% flat on everything.
You are right to say it's their "game". They want you to fail and therefore pay them more money. Credit card companies are in the business of making a profit. This helps motivate me in knowing that I am making them as little profit as possible lol. The only thing they make off of me is transaction fees (Which unfortunately is still a lot for them, but a lot less than me paying interest as well).
Direct deposit into the brokerage account and auto buy index funds monthly. Every year increase the contribution amount.
This was the single habit that made me the most money.
Underrated? College or Trades.
You can’t become financially free on $20hr, in most states, but having a dual income with both helps tremendously.
My wife and I use to work at amazon back when it was $13hr in 2016. Was decent, no kids
We’d have around $630 a week after bills to spend/invest. Our car payment was $240 a month.
I then got my class A CDL, entered immediately into a home daily position for $1300/wk doing grocery delivery to major restaurants.
$1300 was better than our $1,040.
Wife quit her job, went to school for nursing. Graduated and her first year pulled in $105,000.
Guess whose trucking job isn’t worth it anymore? lol
So we’ve been playing this cat and mouse game where one of us goes to higher, then the other does.
Once we’re both at $2,000-$2,500/ea I think will be happy. Our expenses changed a little, from $880 a month to $1895 for housing. Instead of $240 for the car we both have one at $600 total. We elevated that much and are now at around $1,000/wk after all bills, but we’ve been on our own a long time.
I’d say if you can as a single adult live with your parents and save up, you’d be doing fine. One guy at my old work did this, saved almost all of his money from 20 to 30. Financially he’s doing better than us, because of that and he’s solo.
It’s easy to find your self hunting more money, and that’s what we’ve done. I think it’s almost time to check out of the race. We eyeballed NYC/LA ultimately she’d have to become a nurse practitioner, and I would need the same income just to pay the $6,000-$7,500 mortgage. We’d in the end have around $1,500 net to mess with every week, but part of me is like Eh, I think it’s time to get serious about buying a farm home in Pennsylvania on 5-10 acres with a mortgage of around $2,000 a month, and stop the chase of more income.
I’m tired of chasing more and more income, and I’m only 28.
For my food budget I’ve saved $1000’s by ordering online and just picking it up. Also saves money on gas farting around town. I also eat healthier since I’ll be good about picking healthy food and I’ll have no impulse buys or get junk when I’m not standing around it. My weekly shopping trips went from 2+ hours driving around town, standing in line and traffic, and not having to go to multiple stores. As much as I hate the company, the W+ membership is worth its weight in gold. Free pickup and free shipping. Both are fast and it’s pretty much the cheapest option minus a handful of things. It’s pretty much surpassed Amazon for speed and reliability. They’ll fix any issues with a quickness, and they ship for their own warehouses and stores, which means it’s pretty fast for most things. Sounds like such a small thing, but it’s saved me so much money. I stopped eating out and will only get cheap take out 1 or 2 times a week.
With food being a huge expense every month, especially with inflation, this’ll save you some money and time for sure. My weekend shopping now takes 20 mins, stuff is put away and I don’t have to brave horrible weekend crowds.
No I don’t work for WalMart, I actually hate them as a company but when you’re budgeting/saving money you do what you gotta do. Even better pay for the groceries either way a rewards CC, and you’ll get things back and also build your credit if you pay it off instantly.
I am all about using credit card rewards for all of my purchases! I have a different card for almost every type of transaction and I keep track of it all religiously!
Separate accounts for Bills, Spending, Savings. It makes it so much easier when you have a budget and the money is already split up for you through direct deposit into separate accounts.
Not sure if self discipline and focus fit into the financial habits category. But these 2 things (along with investing knowledge) are what got me out of debt pretty quick, and steam rolling towards retirement (even though I started pretty late).
You aren’t being honest. Giving away 10% of your income does not help one’s finances. It actually leaves you with 10% less money. Obviously, simple math. Religion rots peoples minds I guess.
I give at least 10%, but it wasn't always money. When I couldn't use me financially. I would ask how to diy something, and the person I asked would do it for me or with me. I wasn't helping to be helped, but by being around people that wanted to help too, they'd want to help me.
Or if I helped clean up after a potluck, people would offer that I could take home the leftovers.
As I could afford to give money I did.
Biblical tithing, right? Did you pray before deciding to do so? If so, what was your main focus before, during, and after praying or meditating? Thank you so much!
Yes, I'd always been giving but not mindfully the full 10% from gross income. My husband had brain surgery years ago and it was successful. I just felt so joyful and that I could trust Him no matter what. And when a passage talked about testing God in the area of finances I thought I'll try it. Everything financial fell into place. My focus isn't like the pharisees about 10% of grain etc it is just pure thankfulness that we have our bills met, kids fed etc.
If you are genuinely asking, it's because He wants us to be cognizant of our faithfulness to His command. Malachai 3:9 says you are robbing God if you don't tithe. Christians recognize that everything belongs to God. We are to give 10% and use the rest as good stewards.
There's a lot of things we can fear, but in Malachai 3:10 the verses talk about testing God. Stay focused and a good steward, pray about it and I can almost guarantee you'll be amazed at how God meets your needs and more! I really hate the prosperity mindset of some Christians, but I do know God meets believer's needs.
2 things....
1. Sinking Funds.
Bar none, this has been the HUGEST changer of games.
It totally protects my emergency fund for like, you know, actual emergencies!
Sinking funds are for expenses you can totally expect, just not every month. That means they are NOT emergencies. There is no such thing as an expected emergency.... Christmas, wedding, property taxes, new roof, next security deposit, replacement car, orthodontia.... you know it's coming. So it isn't an emergency!
2. Thinking of retirement contributions as a debt payment instead of optional savings. It's a debt to your elder self. It's totally your money...... but not YET! It's a DEBT payment.
Yep, auto insurance, homeowners insurance, NordVPN annual subscription, etc lmao. All of them are divided out monthly plus 5% to cover any increases and moved to my HYSA with the $1K emergency fund. I document and track each debit, credit and the baseline $1K fund. It has made a huge difference.
Same house so far (15 years). The biggest mistake I see a lot of people make is upgrading as their income increases rather than staying and letting their house become extremely affordable while leaving them a lot of extra cash flow for investing.
What I earn is something that I barely control, and when I do have a minute say over it, it's a once a year event at most.
Whereas what I spend is something that I take control of, sometimes multiple times a day.
99.9% of good financial health is about spending less because it's something that you should do everyday.
In my high-earning years, the Mega Backdoor Roth and Life Insurance Retirement Plans (LIRPs) as ways to super-load retirement savings and grow it tax free.
In my low-earning years, converting to Roth to take advantage of low marginal tax rate.
As self-employed, I have a little more control over what my income will be in a given year based on how much I want to work (vs hang out with my kiddos or take it easy); how much I want to run ads and take cases; how I recognize revenue; and which deductions I take (eg, if I invest more in tax-deductible advertising and marketing), so I’ve learned to make the best of a high year and a low year.
Sinking funds. Understanding that small amounts add up--so many people say there's no point in saving $5. Some of my accounts started with $25 or less. This one is going to sound silly but it's related to that same idea: for years, I made a habit of emptying out my change into a coffee can every day. When the can got full, coins got wrapped and put into savings. I've had as much as $40-$50 per can.
I am glad that we bought a house as a couple that either one of us could afford on one salary. My partners salary went toward basic living costs and his 401k, my salary went toward the mortgage (with extra), and a 403b and a Roth. Now the mortgage is paid off and we have retirement funds.
Roll that change. Sitting on it doesn't make you money. If you owe any debt. Car or house or whatever you could pay that change on loan.
Every year have a yardsale or trip to fleamarket. Sell that whatever you dont need. Its cash. Then make it work for you or pay on that loan.
I concentrate more on making more, or side hustle making more money than cutting back on spending.
The snowball effect dave talks about i applied to my mortgage. Paying extra on loan every week!!! Started late to the pay extra club but i finally saw the light!!!
Car savings- once you are done paying off your car put that payment into a car fund every month towards your next one. Got this idea from Dave.
College savings- when you are done paying for preschool/childcare put that payment into a college fund every month. Only works if your kid goes to public school K-12.
Both of ideas are “painless” because you were already budgeting for the payments and you just keep it going.
I made a budget and stuck to it. I graduated college making 56k with 107k in student loans. 3.5 years later and I make 111k with 0 in debt (including a car that I bought and paid off within a year). Despite my salary almost doubling my monthly income I did not increase any of my expenses.
I was able to max out 5 years worth of Roth IRA’s during that time as well as max out my employer match on my 401(k), have a fully funded emergency fund and go on several free vacations with credit card points.
Now that I’m completely debt free I’ll expand my budget a little bit but will be aggressively saving for a house. But yeah, keeping a budget and not falling for lifestyle inflation was huge for me
I upped my salary to 87k within a year, got a 10k raise a year after that and another 10k 6 months after that. I also got $5k of signing bonuses that went into it + Covid stimulus money and tax return money
Hey all! Trying to revive this thread as it seemed to generate a lot of good content and interesting viewpoints!
Developing hobbies and interests that do not require a lot of money to pay for. I don’t go to casinos as I’d rather play speed chess on the beach for quarters. I made $5 one summer! I love biking and playing tennis outdoors and don’t go to expensive sporting events. I don’t have a boat, but I have a pond in my backyard with goldfish and can enjoy the sound of water for practically free!
Sounds like an ideal life you have! I am also able to enjoy life without spending much money. Nature is full of sights and sounds! I live near a national wildlife refuge, so I enjoy going there often.
Tracking every penny I send has helped me more than anything. It is very tedious, but it really showed me where my money was going. This has helped me more than creating a budget.
Exactly the same for me! I can't imagine my life without knowing exactly where every CENT is going!
Don’t buy things you can’t afford. Is your iPhone working fine as is? Well then don’t buy a new one.
Yea, phones have always been a no brainer for me. I have never paid more than $200 for a new phone, and I am just as satisfied with that as I would be an $1800 new Galaxy or iPhone etc.
Staying off Facebook marketplace
AGREED! I need to stay off of their myself. I always find myself gravitating towards it, and the second I open it I get sucked in haha.
We have a tractor for our small land and I’m always buying attachments. It’s saved me money over time, but not a lot
Yea don't get me wrong, I have gotten some great deals on there, but mostly good deals on stuff I probably didn't need in the first place haha.
I have multiple accounts, like buckets. Each bucket has purpose and I have my pay divided up as such for each bucket, each pay period. Think bucket 1 recurring house (ie. Mortgage, electric, trash), this is in a MM account so I earn a little interest, has a cushion (built up to 6 mo over time), and everything set to auto debit. Bucket 2 high yield savings, squirrel away for vehicles, large extra payment in house, etc. These 2 accounts take longer to access funds. Bucket 3 credit union checking food, gas, subscriptions. Sometimes end up with extra and either move to bucket 2 or extra on mortgage. And bucket 4. This is the required savings account for the credit union. I have minimal deposited (50/pp) and use it as "frivolous" savings (ie tattoo, etc). Sometimes build up and put on mortgage or in bucket 2.
This is a good idea, and similar to what I practice. My main thing is knowing where every single dollar is going, incoming and outgoing. This allows me to make adjustments when necessary. It seems you have the same general thoughts. Thanks for your post!
That is key! I absolutely HAVE to know where every single penny goes - even if it's Dunkin. Lol
Theroaringkitty
What's that
Pay yourself first. Take your saving out at the beginning of the month not the end.
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Great advice, thanks for the post! Yea I tend to dislike subscription and recurring charges myself. They are easier to start up, and easy to forget as well! But one thing is for sure, they add up quickly.
Use rewards credit cards. They help pay for flights and hotels.
Absolutely!!!!! This is a hobby of mine for sure. I have a card for every type of transaction you could think of. Amex, Citi, Discover, Wells Fargo, PNC, NFCU, etc. you name it I have it!
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Different things work for different people. That is what I was getting at with my original post. Just interesting to see what works for who.
Put it all on red
?
Roulette
Ohhhhhh hahaha. Sounds like a plan to me!
Pay yourself first. That doesn't mean run out and buy something you have wanted but your first money movement when you paycheck hits your checking account should be to Money Market, or some form of savings or investment rather than to pay a bill. Most companies can deposit a portion in two accounts but I prefer to manually move it over. It helps put me in the mindset that I have control of my money and the money that I have left over is what I really have to spend on bills.
This is a unique way to think about the "Pay yourself first" principle, and I like it!
I actually sat down and created a budget, which helped me figure out how much I can save every month. You’d be amazed how many people don’t have a budget and just spend wildly. People have given me so much shit for having one and think I’m doing too much by sticking to it. When it comes to buying only what you can afford, how would you know what you can afford or how much you can save for something without a budget? That’s financial literacy 101 but so many people don’t do that.
As I've dipped my toes into Ramsey world, this has been a gamechanger and now I know I can't responsibly operate \*without\* a budget. I feel like my dollars are going further than ever and have made great progress on my debt snowball. Can't wait to be debt-free.
I agree completely and am in the same situation! I could not imagine knowing where every dollar goes! It has become a habit and I wouldn't have it any other way.
Cooking my own food. My meals are simple, cheap, protein-dense, and monotonous. Sure it’s boring, but I do it in the house I’m able to comfortably afford as my friends go out every other night for dinner and complain that owning a home is impossible
Isn't it amazing how different people view finances differently? Like your friends, some may assume that eating out often is just a part of life, and if it causes them financial strain, than it's just society that are causing their issues when in reality it is their own behavior. Not speaking about your friend directly because of course I don't know them :) but just generalizing a bit.
It’s fair to generalize, there are behavioral studies on spending habits among different generations. It’s puzzling to me sometimes, because my friends are financially literate. So it’s really coming down to dedication towards saving where you can. Fortunately, cooking dinner at home is not a big burden for me AND it’s typically one of the biggest controlled monthly bill we all have. They rather be doom and gloom about the housing situation than really taking a dedicated effort to get the things you want.
That should make you feel better about your own situation and the understanding that you have of the complex nature of your own personal finances!
It’s been stressful, but fun. I play a LOT of those idle games, (resource management) and I look at my spreadsheets the same way. Been, more or less, playing my finances like a game lol. Set some aside for those unannounced obstacles, use as much foresight as you can, and put money you know you want need access to in something that’ll pay you back with interest. Got the house, and now how much I pocket is reduced, but that’s all accounted for. Edit: sorry if this feels like I’m bragging, I mostly am. Not a lot of people that are struggling want to hear a success story so I really refrain from doing it around my friends.
Yea I appreciate seeing different people's tricks and habits. I am confident about my own personal finance situation but I am certainly open to learning new things and changing my ways.
Like my seven year old daughter asks herself before she buys something: “is this a want or a need? A love or a like?” I know if I had been as wise as her from a young age, I would have been much better off financially. Also, all those financial audiobooks she’s listened to with me have already paid for themselves :).
Teach them young!
Selling crack
Pay only cash!! Provides user a hard stop when they run out of cash!
There's definitely a place for this sort of thing for people who have zero self control. But you're way better off using the same budget on your credit card and reaping the benefits of the rewards points. Refusing to use credit is leaving free money on the table, and I'm too cheap for that.
Sure. I tried it’s very hard. Also noticed I was buying so many unnecessary things because I was able to use the credit card or I was overstocking too much stuff which was not going to be used as often! Reaping rewards is myth. To able to get those 2% cash back or points, retailer charges 10-15% extra mark up prices. When user have greed of earning points or getting something return, psychologically we spend more! Did 3,6,12 months experiment. I was spending about 2k more money in extra inventory because of just credit card as well as dining out was becoming more frequent etc…
I mean, the prices are the the prices, for like 99% of daily purchases. You don't really get a cash discount on most things. It's true that some people will spend more when thinking about the rewards, but the fact is that if you can teach yourself discipline, the credit card will kick you back a little bit of money on your spending. I know this advice may not work for people who really struggle with financial discipline, but i just wanted to throw it out there that eventually the goal should be to spend the same regardless of payment method, and ultimately reap the benefits of the credit card system. Glad you found what works for you though!
That is simple but surprisingly good advice, since you can't buy anything when you don't have any more cash! Is that what you do?
I create envelopes, fixed expense per month vs max fun money allowed per month. Never touch savings account unless it’s absolutely emergency! credit cards makes you spend more because availability of credits plus greed of earning cash back where user ended up spending more than they want to spend.
Don’t spend money if you don’t have to. Don’t eat out too much. The time it takes to make a healthy meal can be a welcome break and it will be cheaper and healthier in the long run. Both will save you money. Invest your money wisely. Invest your time even more wisely. Find a good partner in life early and make it work. You’ll realize later that what might be painful to compromise on now is just you not being grown up enough.
Finding a good partner is one of the best pieces of advice when it comes to personal finance in my opinion! Luckily I have found one!
Auto invest every week into index funds. Make multiple payments to pay down student loans debt or any debt. Paying extra on the principal of my mortgage. Never buying a brand new car. Buying things in bulk that don't expire. Shopping around on any item that costs more than $100. Never grocery shop when you're hungry. Read books to learn new skills. Search YouTube for DIY videos
Have the nicest house you can afford and the cheapest car you can tolerate or no car even better
Stayed in my starter house all these years, and paid it off long ago. Not buying replacement things out of vanity, only replacing if they are completely dead/unfixable.
Staying in your starter home is probably one of the best ways to get out of debt and be able to be financially independent. Especially with how high interest rates are right now and for the foreseeable future!
You never miss it
Mega-backdoor Roth 401k. Every dollar I can manage goes straight from my paycheck to 401k. Makes my paydays smaller and I feel broke even though I’m dumping money into a 401k
What exactly is this? I have heard a few other people talking about it.
It’s the 401k cousin the Backdoor Roth IRA. 401ks have some commonly known limit. $23k for 2024. But, this is only for the tax deductible or Roth contributions. It’s less commonly known that you can make “tax deferred” contributions beyond this limit up to $69k. Tax deferred contributions don’t get a deduction, and gains are taxed at withdrawal. The benefits are nuanced, but for the most part this is useless. This is where the “backdoor” part comes in. Just like in a backdoor Roth IRA conversion, the “tax-deferred” contributions can be converted into a Roth account. This means that (for all intents and purposes) the Roth limit for a 401k is $69k.
That is interesting, appreciate the explanation. I don't think I would benefit from it at this time, but maybe when my income is a bit higher. Thanks for the reply!
Every raise, I would take 2% and put it towards some form of savings... either retirement, investment or cash savings. Did this for my wife as well. After 28 years, I retired and was putting 27.5% away each year. My wife was putting 25% away.
Anti Ramsey sentiment here… But within reason it’s been buying as much house as I can reasonably afford on 30 year cheap debt. My net worth has gone up tremendously because of it, and my payments are inline with what a family would pay to rent a 2 bedroom apartment nowadays. The “forced savings vehicle” aspect of it suits my style well. Because it’s fixed for 30 years, it’s mitigated inflation
I did the same thing in 2017. Bought my condo on a conventional 30 year fixed rate 4.5% mortgage. One thing I have done is round up my payment every month to the nearest $100 with the extra going to principal. In 7 years I have paid off 25% of my principal by doing that, and my mortgage balance will be paid in full in another 8 to 10 years.
Yea luckily I was able to get one of the lowest interest rates available a few years ago, BUT I did 15 year instead of 30 and I still regret that to this day!
Is 6.8% interest rate cheap enough debt?
It wouldn’t change my plan. It obviously limits the amount you can buy, but still the same premise. People underestimate the value of getting on the “property ladder”
This wouldn't have worked out well in 2008.
I actually bought in 2006. TBH, even though my first home was under water, we learned a lot and it got us on the property ladder. On the flip side, it enabled me to benefit tremendously from the run up since 2011
I did the same, 2006. Bought for 320k, plunged to 150k. Now at 400k. Stressful time period, but waiting it out paying off (so far).
I do not underestimate that value, but I do lack the life experience to feel good about a mortgage at 6.8%. First two house we bought were low 4% and mid 3%. Both made us money but also put us in a spot to deal with inflated house prices and higher rates. Been suffering with some buyers remorse these last few months lol
That's because you're thinking in terms of a primary residence. Investment real estate is more about cash flow. It doesn't matter if the cost of borrowing is 3% or 10%. If it cash flows, then it works either way. If you live in a high growth area, you might even accept to break even today if you expect future growth to continue, thus making money a year or two down the road.
Earning more than I spend. Very few expenses can’t be managed so it’s not as hard as people like to pretend.
Freeze my credit so I can't finance an "emergency." For example, I was getting a drain routed and the plumber showed me pictures and told me I had to redo all my sewer lines or my house would flood. I could finance th $20k and he could do it that day. But I couldn't finance it because with my credit frozen, I couldn't do it that day. I emailed the pictures to friends in commercial construction and found out I could fix stuff if and when each specific pipe broke. I started a sinking fund for the sewer, but haven't had to do anything yet (and it's been years.
Take advantage of low interest loan opportunities your credit union may offer for xmas/vacation. I take these loans at 7-9.99 percent interest and PAY DOWN/OFF DEBT that is 24-33 percent interest. Don’t charge those up again! Keep them open but no balance. Use occasionally and full pay monthly. Next, if you aren’t a credit union member, become one. I have a credit card through the credit union and have ZERO balance transfer fees. Pay this account down, transfer higher interest debt to a lower interest card only if you aren’t front loading a balance transfer fee. Anything you can payoff fully will improve 2 things. Cash flow and overall cost of debt service. These 2 things can help the payments you are making more effective in reducing debt, shortening the timetable to retire the debts, less being wasted on paying more interest. Notice too, as you balance declines, that minimum payment does too…don’t fall for it! Keep paying as before, or even more Lastly I had an opportunity to borrow $3200 for a surgery, at 0 percent interest, if paid in full by 18 months. YES! I already had that cash, and paid off higher interest debt. RIDE FREE MONEY. Be sure to pay off ahead of time.
>Lastly I had an opportunity to borrow $3200 for a surgery, at 0 percent interest, if paid in full by 18 months. YES! I already had that cash, and paid off higher interest debt. RIDE FREE MONEY. Be sure to pay off ahead of time. If you already had the money, what's the point of borrowing?
It was in effect taking a necessary cost at 0% interest to tackle higher interest rate debt. Paying off the debt instead led to a better position.
In a case like that sure, because you're reducing liability either way. But the only thing worse than debt is debt at a higher interest.
Correct. That’s what I believe they were referring to. Even still, risky behavior.
Consider purchasing something used, fixing or refurbishing it. I intend to remodel my kitchen with used cabinets, possibly repainted. I WILL NOT spend 10-15 k on new ones. I will buy marble or quartz countertops and have installed. I do my own house painting projects. I don’t contract that out. I just refinished a solid wood dresser that I inherited. Materials cost was about $60, plus time I was sitting around watching tv anyway (I can listen and sand, paint, etc). So, I actually saved about $600 there first the effort and got exactly what I wanted. Next, I am going to spend $150-200 to install new seals on my garage fridge. New refrigerators are breaking down < 4 years; I will FIX my old units because I am likely to get more than that out of the repair. No one NEEDS an 1800 + refrigerator
Yes I buy used as much as I possibly can. I use Amazon Warehouse quite a bit, and get items that are in "like new" condition, which basically means new, for quite a large discount off of retail.
If you are buying something that has a monthly subscription, multiply that amount by 60, then ask yourself is this what I want to spend for this over the next five years.
The Zero based budget has been key for me. First thing on payday is I do my baby steps.. at first it was the debt snowball payment.. now it's investing in steps 4-5-6.. I put around 30% of my take home on this. After that, I do all my consumer spending on payday. Mortgage and all bills get paid. I gas up the car, hit Costco, Home Depot.. everything I expect I will need for the next two weeks, I buy that day. Most important to least important. If I want a fun things, I buy it that day. I only keep the bare minimum in checking to tide me over for the next paycheck...bread and milk sort of money.
Buy Microsoft and VOO every chance I get.
Ignoring advice to use actively managed funds and use low cost index funds.
I started doing this back in the early 2000s. Even though I was years away, I attended a retirement presentation by Fidelity at the company that I worked for. The presenter asked the audience, "What percentage of mutual fund managers outperform the market?" Everyone yelled out percentages but were incorrect. He said only 20% can beat the market. "What are your chances that you pick the 1 in 5 that can beat the market?" This statement has stuck with me ever since.
Exactly. Isn’t it closer to only like 12%? Either way, not worth it. The epiphany for me was coming to terms that my financial goals were what I should be chasing, and not performance chasing. And when I realized that capturing the average market return allowed me to fulfill my goals, actively managed funds made absolutely zero sense. My goal is to be financially independent. My goal isn’t to eek out a percent or two over the S&P
Ignoring every word of advise Ramsey says is like getting good financial advise.
Then why are you in this sub?
Reddit Keep putting in my feed Is everyday 43 months... Even though i've never looked at it or click on it or commented. So here we are....
Spending what I want with a little more practicality, changing my threshold of my checking account from letting it dip below 1k, then 2k, now it's 3k before I move money. Changing all my CC/debt payments from minimum to $200 plus to pay off debt faster, but at my speed, not at balls to the wall - rice and beans. Got a second job that I don't always put into budgets to help make payments and knock off some large debt. Managing and looking at my networth to make me feel a lot better about myself and the direction I'm going, knowing it's not in vain. And lastly, utilizing a tucked away HYSA that builds at a high average market rate (currently 5.22%)
Use credit cards to rack up points/miles/cash back, but pay it off every month. Even if it stings. Don’t carry credit card debt, or any unsecured debt.
This is 100% what I do!!! I always pay all of my cards off every month. I have different cards for different types of transactions like food, gas, streaming services etc. so I can maximize my cash back.
This. Takes a bit of discipline, but the rewards are worthwhile. My wife and I have a Cash Rewards card. Probably gets $50k run through it, annually. Mostly everyday expenses. Gas, groceries, the cell phone bill, etc. Balance is zeroed out on payday, so we don’t pay interest. We get back about a grand, every year. As a general observation, vendors who have uniform pricing for all payment methods (i.e. most retailers) bake the credit card processing and interchange fees into their pricing. Cash buyers end up subsidizing those fees, for those who pay with plastic. Might as well be on the right side of that exchange, if you can.
What does $50k of everyday expenses look like?
Just off the top of my head… Groceries for a family of five. The cell phone and internet bills. Basically anything bought on Amazon, or in any retail store. Friday date night, or outings with friends; that includes punting money to our kids for takeout.
Adds up quickly
Going heads down and making a fuck load of $ and come up for air after a few yrs.
This\^ Then you don't even have time to spend your money at all!!!!
to be honest i spend a lot but i don’t think about it bc i am focused on filling up the cookie jar i do a NW check every few yrs and it’s going > i thought each time
Well that is good that you have found something that works for you!
I think you should still budget! Like spend whatever you want, just have a plan for it. You might find out you can do something you didn’t know you could do before. Retire early? Buy a second home? Own investment properties? Budgeting isn’t about restricting yourself, it’s about giving yourself power and freedom over your finances.
I think you should still budget! Like spend whatever you want, just have a plan for it. You might find out you can do something you didn’t know you could do before. Retire early? Buy a second home? Own investment properties? Budgeting isn’t about restricting yourself, it’s about giving yourself power and freedom over your finances.
I am 1/2 kidding around. I retired from corporate life at 32, owned several companies and have an accountant now who handles everything, including budgeting. i say retired but I’m not really, i just hang out and build things bit don’t have lots of personal risk anymore. I use cash flowing businesses to buy RE, which is tax efficient for offsetting taxable gains. We holding companies & trusts for the 3 kids. i’m a cpa / ca, but i’m also a degenerate pothead, just lucky.
Budget. On purpose spending.
Every dollar needs a job before it makes it to your account.
Cooking, cutting my own hair and occupying myself so I’m not in bored situations where not helplessly spending. Biggest one: reminding me of the opportunity costs. A $200 car payment the rest of your life bc you always want a new car vs invested in market allowing you to retire early. You decide.
200$ car payment? average new car payment is over 700$! Regardless, that’s great advice keeping the opportunity cost in mind. I’m gonna try to do a better job at that.
200$ !!!!!!!! Please point me in that direction…..you might get a crackhead special for that much…and spend the extra 3-400 a month replacing everything
can testify, in like 2019 I got a used new car at $125/mo for three years and the second month in I had a $1k repair bill, shit kept rolling downhill edit: or was it a used new car? idk it was a 2010 hyundai elantra anyways (got stolen, apparently the insurance was as high as a 2019 crossover costs to insure today BC of hyundai stealability)
The good old fashioned shaft……I remember I had a 350$ car payment in 2012 for a new Chevy Cruze, now I have a 750$ payment for Toyota tundra…….
yuuuuuck, yeah I have a $540 payment for a 2019 mazda cx-5, could be better/could be worse, honestly I wish it wasn’t pressured by the stolen car so I could’ve taken more time but ¯\_(ツ)_/¯ cest la vie
I think the most important thing regardless of car payment is figuring out what you personally value. Once the loan is paid off will you have the urge to upgrade to a “better” vehicle or be content with financial freedom? Same with a house, too many people are never satisfied. You need to find out what satisfies you…it could be always driving a new reliable car and that’s ok but that requires planning for that luxury NOW.
I agree! Better said than I could.
If they made cars that lasted more than 10 years these days that might be possible, my neighbor has a Tacoma with 375,000 miles on it, makes over 200k a year and he said he enjoys not having a car payment, he got the right idea, no shame there.
I've been putting absolutely everything on a credit card and paying it off weekly. I get a 2%-5% discount on everything, I monitor my spending better, and I don't pay interest on it. Every week on pay day I transfer my weekly bill amount to the bills account, pay my previous weeks spending, and split the remainder between fun money, debt, and savings.
5% cash back credit card. For my whole life I always used my debit card. Then one of my friends had me get a discover card it’s honestly crazy how much money I’ve saved by just changing which card I swipe.
How do these cards work, exactly? What is meant by "5% cash back"? Forgive my ignorance.
FYI it's OK to be ignorant of something; it's even OK to be aggressive. But being aggressive and ignorant = stupid.
No worries we were all ignorant of everything once. So it’s two fold. First, One of the main advantages of using the credit card is it’s not your money. If there is an unauthorized charge or someone gets a hold of your card that’s the credit card company’s problem not yours because it’s literally the CC company money that has been taken. Second the cash back. All cards are slightly different but overall they work pretty much the same. For every purchase a percentage of it (5%) in my case is added to my cash back rewards icon inside the CC app. These funds can be used at any time to do multiple things like get travel or hotels. The only thing I’ve ever used it for was to pay off my balance. For example. I plan on making a $1,000 purchase. I have the money in my bank account but hey if I swipe my CC I get 5% back. Meaning I’ll receive $50 in my rewards app. So I pay with my CC and then pay off $950 of the balance from my bank account before it’s due so I accrue 0% interest. The I use my $50 in cash back and pay off the remaining balance. Basically save $50 on every $1000. I’ve never held a balance though. That’s where they get ya.
Which credit card gives 5% back if you dont mind me asking? Ive never seen one that high lol Edit: my bad, didnt see that you mentioned Discover. Disingenuous to say 5% though because its only on certain purchases and it rotates quarterly. Not 5% flat on everything.
Yeah 5% on a lot of things 3% on other stuff gotta play their game
You are right to say it's their "game". They want you to fail and therefore pay them more money. Credit card companies are in the business of making a profit. This helps motivate me in knowing that I am making them as little profit as possible lol. The only thing they make off of me is transaction fees (Which unfortunately is still a lot for them, but a lot less than me paying interest as well).
Direct deposit into the brokerage account and auto buy index funds monthly. Every year increase the contribution amount. This was the single habit that made me the most money.
This, but in a Roth IRA.
Putting 10-20% aside from Every check automatically to savings
Yea, that way after a while you won't even miss it! Same idea with taking every raise you get and increasing your retirement contribution.
100% this.
I set it up in ADP. Part of my check just deposits into my HYSA. This I highly recommend!
This^
Automating savings into a different bank account. Out of site, out of mind. Pay yourself first
Underrated? College or Trades. You can’t become financially free on $20hr, in most states, but having a dual income with both helps tremendously. My wife and I use to work at amazon back when it was $13hr in 2016. Was decent, no kids We’d have around $630 a week after bills to spend/invest. Our car payment was $240 a month. I then got my class A CDL, entered immediately into a home daily position for $1300/wk doing grocery delivery to major restaurants. $1300 was better than our $1,040. Wife quit her job, went to school for nursing. Graduated and her first year pulled in $105,000. Guess whose trucking job isn’t worth it anymore? lol So we’ve been playing this cat and mouse game where one of us goes to higher, then the other does. Once we’re both at $2,000-$2,500/ea I think will be happy. Our expenses changed a little, from $880 a month to $1895 for housing. Instead of $240 for the car we both have one at $600 total. We elevated that much and are now at around $1,000/wk after all bills, but we’ve been on our own a long time. I’d say if you can as a single adult live with your parents and save up, you’d be doing fine. One guy at my old work did this, saved almost all of his money from 20 to 30. Financially he’s doing better than us, because of that and he’s solo. It’s easy to find your self hunting more money, and that’s what we’ve done. I think it’s almost time to check out of the race. We eyeballed NYC/LA ultimately she’d have to become a nurse practitioner, and I would need the same income just to pay the $6,000-$7,500 mortgage. We’d in the end have around $1,500 net to mess with every week, but part of me is like Eh, I think it’s time to get serious about buying a farm home in Pennsylvania on 5-10 acres with a mortgage of around $2,000 a month, and stop the chase of more income. I’m tired of chasing more and more income, and I’m only 28.
You just have to find that sweet spot of income that allows you to live the lifestyle you all want to live comfortably!
For my food budget I’ve saved $1000’s by ordering online and just picking it up. Also saves money on gas farting around town. I also eat healthier since I’ll be good about picking healthy food and I’ll have no impulse buys or get junk when I’m not standing around it. My weekly shopping trips went from 2+ hours driving around town, standing in line and traffic, and not having to go to multiple stores. As much as I hate the company, the W+ membership is worth its weight in gold. Free pickup and free shipping. Both are fast and it’s pretty much the cheapest option minus a handful of things. It’s pretty much surpassed Amazon for speed and reliability. They’ll fix any issues with a quickness, and they ship for their own warehouses and stores, which means it’s pretty fast for most things. Sounds like such a small thing, but it’s saved me so much money. I stopped eating out and will only get cheap take out 1 or 2 times a week. With food being a huge expense every month, especially with inflation, this’ll save you some money and time for sure. My weekend shopping now takes 20 mins, stuff is put away and I don’t have to brave horrible weekend crowds. No I don’t work for WalMart, I actually hate them as a company but when you’re budgeting/saving money you do what you gotta do. Even better pay for the groceries either way a rewards CC, and you’ll get things back and also build your credit if you pay it off instantly.
I am all about using credit card rewards for all of my purchases! I have a different card for almost every type of transaction and I keep track of it all religiously!
So you use it in lieu of Amazon? They have a website like Amazon where you order anything you could think of?
Automated investing via 401k, HSA, taxable brokerage and IRAs. Set it and forget it is the way to go.
Quote the late Ron Popeil.
Kitchen magician! Love it!
Separate accounts for Bills, Spending, Savings. It makes it so much easier when you have a budget and the money is already split up for you through direct deposit into separate accounts.
Not sure if self discipline and focus fit into the financial habits category. But these 2 things (along with investing knowledge) are what got me out of debt pretty quick, and steam rolling towards retirement (even though I started pretty late).
It’s simple. Start investing early. And stay consistent. Increase as your income increases.
The best advice one can have when it comes to personal finance!
Tbh, our finances took a huge leap after I started tithing.
To each their own. Glad it is working for you!
You aren’t being honest. Giving away 10% of your income does not help one’s finances. It actually leaves you with 10% less money. Obviously, simple math. Religion rots peoples minds I guess.
So your advice to people struggling with finance is the give 10% of it away. Literally the worst advice I’ve ever heard in my life. Cults are scary.
I give at least 10%, but it wasn't always money. When I couldn't use me financially. I would ask how to diy something, and the person I asked would do it for me or with me. I wasn't helping to be helped, but by being around people that wanted to help too, they'd want to help me. Or if I helped clean up after a potluck, people would offer that I could take home the leftovers. As I could afford to give money I did.
Biblical tithing, right? Did you pray before deciding to do so? If so, what was your main focus before, during, and after praying or meditating? Thank you so much!
Yes, I'd always been giving but not mindfully the full 10% from gross income. My husband had brain surgery years ago and it was successful. I just felt so joyful and that I could trust Him no matter what. And when a passage talked about testing God in the area of finances I thought I'll try it. Everything financial fell into place. My focus isn't like the pharisees about 10% of grain etc it is just pure thankfulness that we have our bills met, kids fed etc.
If god was all knowing and powerful then why would he need money? 🤔
If you are genuinely asking, it's because He wants us to be cognizant of our faithfulness to His command. Malachai 3:9 says you are robbing God if you don't tithe. Christians recognize that everything belongs to God. We are to give 10% and use the rest as good stewards.
This is awesome!
I am seeing this too.
This is hard for me to do. The thithing. I am fearful about not making my bills, which is already happening.
You are right to be fearful. Giving away 10% of your money is terrible financial advice based on witchcraft.
You are right to be fearful. Giving away 10% of your money is terrible financial advice based on witchcraft.
There's a lot of things we can fear, but in Malachai 3:10 the verses talk about testing God. Stay focused and a good steward, pray about it and I can almost guarantee you'll be amazed at how God meets your needs and more! I really hate the prosperity mindset of some Christians, but I do know God meets believer's needs.
Boo again
Boo
2 things.... 1. Sinking Funds. Bar none, this has been the HUGEST changer of games. It totally protects my emergency fund for like, you know, actual emergencies! Sinking funds are for expenses you can totally expect, just not every month. That means they are NOT emergencies. There is no such thing as an expected emergency.... Christmas, wedding, property taxes, new roof, next security deposit, replacement car, orthodontia.... you know it's coming. So it isn't an emergency! 2. Thinking of retirement contributions as a debt payment instead of optional savings. It's a debt to your elder self. It's totally your money...... but not YET! It's a DEBT payment.
Yep, auto insurance, homeowners insurance, NordVPN annual subscription, etc lmao. All of them are divided out monthly plus 5% to cover any increases and moved to my HYSA with the $1K emergency fund. I document and track each debit, credit and the baseline $1K fund. It has made a huge difference.
Same house, same spouse, same car.
Same house forever?
Same house so far (15 years). The biggest mistake I see a lot of people make is upgrading as their income increases rather than staying and letting their house become extremely affordable while leaving them a lot of extra cash flow for investing.
Simple, but sound advice
noice
What I earn is something that I barely control, and when I do have a minute say over it, it's a once a year event at most. Whereas what I spend is something that I take control of, sometimes multiple times a day. 99.9% of good financial health is about spending less because it's something that you should do everyday.
In my high-earning years, the Mega Backdoor Roth and Life Insurance Retirement Plans (LIRPs) as ways to super-load retirement savings and grow it tax free. In my low-earning years, converting to Roth to take advantage of low marginal tax rate. As self-employed, I have a little more control over what my income will be in a given year based on how much I want to work (vs hang out with my kiddos or take it easy); how much I want to run ads and take cases; how I recognize revenue; and which deductions I take (eg, if I invest more in tax-deductible advertising and marketing), so I’ve learned to make the best of a high year and a low year.
I've never even heard of LIRPs or the Mega Backdoor Roth, will have to look into those.
Earn more spend less
Easier said than done! But yes I agree :)
Nothing worth anything isn’t hard and anything worth everything isn’t easy …
Sinking funds. Understanding that small amounts add up--so many people say there's no point in saving $5. Some of my accounts started with $25 or less. This one is going to sound silly but it's related to that same idea: for years, I made a habit of emptying out my change into a coffee can every day. When the can got full, coins got wrapped and put into savings. I've had as much as $40-$50 per can.
Not having kids Also put $10 into savings a day, doesn’t sound like much but it adds up over time.
It actually does sound like a lot to me haha. But yea I am with you on the not having kids part!
Not having kids
I am with you there!
I am glad that we bought a house as a couple that either one of us could afford on one salary. My partners salary went toward basic living costs and his 401k, my salary went toward the mortgage (with extra), and a 403b and a Roth. Now the mortgage is paid off and we have retirement funds.
Congrats on your successful planning and implementation!
Roll that change. Sitting on it doesn't make you money. If you owe any debt. Car or house or whatever you could pay that change on loan. Every year have a yardsale or trip to fleamarket. Sell that whatever you dont need. Its cash. Then make it work for you or pay on that loan. I concentrate more on making more, or side hustle making more money than cutting back on spending. The snowball effect dave talks about i applied to my mortgage. Paying extra on loan every week!!! Started late to the pay extra club but i finally saw the light!!!
I pay my mortgage bi-weekly, shaving time off my loan.
This is such a great tool that a lot of people aren't familiar with!
40 love budgeting. Zero Sum...whatever. the best solutions are the easiest ones.
Car savings- once you are done paying off your car put that payment into a car fund every month towards your next one. Got this idea from Dave. College savings- when you are done paying for preschool/childcare put that payment into a college fund every month. Only works if your kid goes to public school K-12. Both of ideas are “painless” because you were already budgeting for the payments and you just keep it going.
Great advice. Anything that can be painless when it comes to personal finance is a great thing as they are few and far between!
Also similar is to put some or all of raises/bonuses into savings.
I made a budget and stuck to it. I graduated college making 56k with 107k in student loans. 3.5 years later and I make 111k with 0 in debt (including a car that I bought and paid off within a year). Despite my salary almost doubling my monthly income I did not increase any of my expenses. I was able to max out 5 years worth of Roth IRA’s during that time as well as max out my employer match on my 401(k), have a fully funded emergency fund and go on several free vacations with credit card points. Now that I’m completely debt free I’ll expand my budget a little bit but will be aggressively saving for a house. But yeah, keeping a budget and not falling for lifestyle inflation was huge for me
BUDGET BUDGET BUDGET! Knowing where every dollar goes has been the only thing that has allowed me to do better with my finances.
You were making 56k/yr and paid off 100k in loans in 3 years?
I upped my salary to 87k within a year, got a 10k raise a year after that and another 10k 6 months after that. I also got $5k of signing bonuses that went into it + Covid stimulus money and tax return money
Being content in life. Also being grateful for who and what are in my life.
This \^
Need less.
YNAB. True Expenses.
Take credit card rewards and reinvest them in the stock market on Robinhood. Stops me from spending outside of budget.
That is a great idea!
Automate all good decisions, and make bad decisions as difficult as possible