Helpful financial tips

[scooterbug44]

Thought it would be helpful to have a thread for folks to share their tips for saving money/financial planning.

This is NOT the thread for you to comment on other's fiscal irresponsibility, your stock picks, share recipes, or crow about your frugal lifestyle - many others available for that!

The best pieces of advice I've gotten:

1) Set up your paycheck so that a fixed percent of every check goes to a savings or money market account.
(This is great because you never have to make a concerted effort and you don't spend the money because it never shows up in your checking account.)
A friend also does this percentage system, but has her percentage sent to a "fun" account that she withdraws a fixed amount of cash from every week and gets to do whatever with it - until it's gone, then she's SOL.

2) Max out your IRA every year. No major luxury purchases allowed until you've maxed it out for the year.

3) Keep a "forgotten" savings account. Never consider this money as an asset when figuring out your budget and only use it for a "true" emergency. Then you have a cash cushion for major unexpected expenses instead of an emergency credit card that will compound the financial problem.

4) Pay off your credit cards every month - finance charges and interest payments are the fastest way to have money go out the window.

 

[Capricious]

"..This is NOT the thread for you to comment on other's fiscal irresponsibility..."



Darn.


Might I suggest this for a simple, painless evaluation
of where you are and where you should be:

http://www.fpanet.org/journal/articles/2006_Issues/jfp0106-art6.cfm

 

[Miss Kitty]

Let Miss Kitty pay the bills and let Mr. Kitty balance the checkbook!

Put the fear of God in your children about credit card interest rates and debt. Worked for us...neither one of them will use anything but a debit card.

 

[canoehead]

I took a financial seminar several years ago, and the most useful thing that I heard there was "you don't have to deny yourself anything, just make sure you budget for it."

I find in budgeting that it's a lot about mindset - never having to tell myself I "can't" have anything makes perspective quite different. Instead I recognize that the thing I want to buy right now (depending on the size of it) means I will have to give something else up for it (I always try to think about what that might be) and/or wait longer for something else I might also really want.

My budgeting strategies changed drastically when I incorporated the word "prioritization"!

 

[NotDeadYet]

Keep a written record of every dime you spend for an entire month. That means absolutely everything, including stuff that seems small, like a newspaper and a cup of coffee, or that quart of ice cream or couple of beers, that pair of shoes you found on sale, whatever. And including your regular big bills too. The point of this is not to identify pleasures you will deny yourself in the future. It is to get a true realistic picture of exactly where your money is going. Then if you want to change it, you can. If you are satisfied with it, that's fine too. However, many people who do this are quite surprised at their true spending.

 

[Capricious]

This is a bit of dry reading, but page 1 pretty well
sums up how your cohorts are planning for their
retirments


http://www.ebri.org/pdf/briefspdf/EBRI_IB_04a-20075.pdf


I love to curl-up by the fire on a chilly winter's night with
a big cup of hot chocolate and read this stuff.

 

[scooterbug44]

Thought of 3 more:

1) Be VERY careful allowing your kids to get credit cards. Them not being responsible can really damage your credit rating and the bank will not allow your name to be taken off that account until it has been completely paid off.

My mother's credit rating took a major beating because she was listed on my brother's account! She was trying to teach him good money management/give him an emergency card and didn't realize the pitfalls.

2) Treat every credit card solicitation, bank statement etc. as the financial equivalent of raw chicken - shred or burn all financial documents, even the "junk mail" credit card offers before discarding.

3) Check your credit report every year - it's free by law.

 

[Capricious]

How Ironic.

The Oct. 2007 issue of "Boating Industry" magazine just arrived
and there on page 10 is the following:



"the majority of the American population falls into the "spender" category, and our economy is forever grateful. Spenders are not afraid to leverage and don't tend to wait to jump on a great deal or a possible opportunity. They will spend money without reserve and that is where things can become dangerous. Spenders may not look at all the factors involved, including whether or not they have the money to spend or if now is the time to spend it. They are usually very willing to use credit to get immediate gratification."


"The polar opposite of this is, of course, the "Saver." the saver tends to be responsible, stable and secure. These people often have cash available to use if they are convinced to invest it and, if they must finance, they usually qualify for excellent terms. Savers are often able to sail through setbacks and slow seasons without losing much sleep. After all, they are prepared.
The downside is that they may hesitate to jump on opportunities or wait until it is not such a good deal, and their returns can reflect this slow, small, albiet steady growth."




What is being discussed here is boat dealerships, but it all rings true for
individuals as well.

Find your own balance

 

[seaside2]

Protect your identity with a vengence.

Shred financial documents that might allow an identity thief to gain access to your accounts.

Take or leave it but Granpa used to say: save 10%, give 10% and spend the rest with thanksgiving.

 

[Bob]

Help others get what they want...so that your business will flourish....keep a budget tally on a bulletin board so your kids, but not neighbors, can see it. When you give your kids any amount of allowance, or if they have a job, have them hand you back 20 percent and put it in their savings account. Show them their money growing by giving them bank statements to file. Let your kids hear you deciding how to allocate income. Turn off the TV.