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Buzzard
03-01-2011, 03:49 AM
I read about so many people that say that they can't save money, don't know how to etc.

Here is how I did it and I am no financial genius.

Before I got my current full time job, I worked low pay jobs trying to get by. Fortunately my parents let me live at home for a nominal charge for my expenses etc. I started by putting about $10 a month into a savings account and wouldn't touch it.

When I finally got into my current job I started at $9.55 an hour. I then opened up a credit union account and automatically deposited $50 bucks into it every 2 weeks when I got paid. Again, I never touched it and forgot about it. A few years later I finally got into a 401k program and put a small percentage into that. 1 to 2% at first, then up to 5%.

I got a credit card to establish my credit. I made small purchases initially and paid them off through 2 or 3 cycles, thinking that I would establish good credit by using them and paying them off responsibly.

Whenever I would get a raise, I would put all of the raise into the account and live like I never got the raise. I did dip into my CU account to purchase my first new vehicle and my house. When I moved out of my parents house, I had to adjust my savings due to my new expenses, but still managed to always put at least $50 bucks a paycheck into the savings account, adding to it when I was able to average out my monthly needs.

Basically, that is all I did. If I wanted something big and didn't have the cash to pay for it, I would wait until I saved it, still without dipping into my savings. If I did put it on a credit card, I would pay it off immediately, paying no interest and using the credit cards money for a free month loan.

In 1993 a friend of mine and I transferred to a different state and became roommates for a few months. Being bored and knowing nobody, we would come home after work, have a few beers and talk. Talk turned to money and how to save and I shared my ideas with him. At this time, he had $0 in savings. He wound up transferring back to SoCal later in 1993 and we kept in touch off and on through the years.

Imagine my surprise when last year I got a call from him, (I lost his number as it was on my answering machine and it broke, leaving me unable to contact him, as his # is unlisted) and he just called to say thanks. I said, "thanks for what?" He told me how he used the advice I gave him and he and his wife were able to purchase their first home and then a year or two later a second home. He told me he never would have been able to do it without my help. I felt completely honored as I have tried to help everyone I know do this, but he is the only one who would listen to what I had to say.

I'm not rich by any means, but I live comfortably without any major wants. Needs are taken care of. This has allowed me to help others.

I hope this isn't taken the wrong way. I know it is possible because I did it and would love to help others get started off on the right foot.

I have a friend who is a little jealous of what I have saved and is always trying to coax me to spending big cash on stupid things. He won't listen to my advice on saving, has no savings and spends cash as fast as it comes it. I tried at the onset to give him tips, probably unwelcome, but he decided to live his life and spend his money how he chooses, which is his right.

At one point, he was making over 112k a year, over 3 times my salary and he has absolutely nothing to show for it except for $500+ dollars a month in cell phone bills for his kids. I love him like a brother but worry about him.

Anyways, I'm off my soapbox and I hope I haven't offended anyone. I am just trying to share how I was able to do it, hoping others have the same or better success than I have had. YMMV

I may be completely wrong in my approach, inflation may be making my money worth less as time goes on, but I'll stick with this approach until I find a better way. Good luck to all.

Llamafighter
03-01-2011, 04:11 AM
Good story! I'm working on saving to pay off the debt I've (we've ) racked up in the first 7 years of marriage.
Thanks for sharing the advice.

County Mike
03-01-2011, 11:07 AM
That's very good advice. No matter what the amount, if you can put $X into a savings account from each pay and not touch it, it will grow faster than you think.

You know the saying "Time flies"? Well, as that time flies by, your savings grow.

Almost everyone could live on $20-$50 less per month than what they make. Drop that into savings instead of just blowing it.

NateR
03-01-2011, 11:59 AM
Good advice, but I don't think it's a knowledge issue for some of us as much as a self-control issue. For instance, I know how to swim, in theory (meaning that I understand the basic physical principles involved in staying afloat and moving yourself through water), but I still can't swim because I just can't get over my fear of deep water.

I think my inability to save money is rooted in my inability to see any intrinsic value in money itself. To me it just doesn't seem to be worth saving. Especially when you read horror stories about hyperinflation and it just further illustrates how fragile and ultimately worthless paper money really is.

Spiritwalker
03-01-2011, 12:45 PM
Good advice, but I don't think it's a knowledge issue for some of us as much as a self-control issue. For instance, I know how to swim, in theory (meaning that I understand the basic physical principles involved in staying afloat and moving yourself through water), but I still can't swim because I just can't get over my fear of deep water.

I think my inability to save money is rooted in my inability to see any intrinsic value in money itself. To me it just doesn't seem to be worth saving. Especially when you read horror stories about hyperinflation and it just further illustrates how fragile and ultimately worthless paper money really is.


Makes a lot of sense... but you do see the intrinsic value in some of the things you can obtain after saving money right? :wink:

rearnakedchoke
03-01-2011, 12:56 PM
great story buzzard .. yes, saving money is a great habit .. i teach my kids the value of money and saving it ... right now, all the money i save (after vacations and such), i dump into my mortgage ... doing that over the last few years has taken so many years off my current mortgage ...

NateR
03-01-2011, 01:03 PM
Makes a lot of sense... but you do see the intrinsic value in some of the things you can obtain after saving money right? :wink:

"Money as a means to get stuff," I can definitely see the value in that. :laugh: But saving money just for the sake of saving money has never been something that I've been able to do.

I've had money in saving before. I had over $3000 in my bank account after I got home from Bosnia and it was extremely stressful for me. Once the money was gone and I was living paycheck to paycheck again, I was able to relax and felt like there was a giant weight off of my shoulders.

rearnakedchoke
03-01-2011, 01:06 PM
"Money as a means to get stuff," I can definitely see the value in that. :laugh: But saving money just for the sake of saving money has never been something that I've been able to do.

I've had money in saving before. I had over $3000 in my bank account after I got home from Bosnia and it was extremely stressful for me. Once the money was gone and I was living paycheck to paycheck again, I was able to relax and felt like there was a giant weight off of my shoulders.

that's why i dump it on my mortgage ... it's paying off my debt way faster and i don't have to worry about much ..

NateR
03-01-2011, 01:10 PM
that's why i dump it on my mortgage ... it's paying off my debt way faster and i don't have to worry about much ..

I have no debt.

County Mike
03-01-2011, 01:31 PM
I've had money in saving before. I had over $3000 in my bank account after I got home from Bosnia and it was extremely stressful for me. Once the money was gone and I was living paycheck to paycheck again, I was able to relax and felt like there was a giant weight off of my shoulders.

I'm the exact opposite. When my savings are dwindled down, I feel very anxious. It makes me nervous to think that if something comes up, I can't afford to deal with it. Car repairs, house repairs, medical expense, whatever. I feel much more relaxed knowing that I have money in the bank in case I need it.

Now, if you do have debt, it makes more sense financially to use "extra" money to pay down that debt as quickly as possible. A savings account these days might earn 1% interest where a debt is going to cost WAY more. Better to pay down the interest bearing debt than to stash money away where it won't grow quickly.

Chuck
03-01-2011, 01:34 PM
I'm the exact opposite. When my savings are dwindled down, I feel very anxious. It makes me nervous to think that if something comes up, I can't afford to deal with it. Car repairs, house repairs, medical expense, whatever. I feel much more relaxed knowing that I have money in the bank in case I need it.

Now, if you do have debt, it makes more sense financially to use "extra" money to pay down that debt as quickly as possible. A savings account these days might earn 1% interest where a debt is going to cost WAY more. Better to pay down the interest bearing debt than to stash money away where it won't grow quickly.

We didn't pay any extra down on our debt until we had a little emergency fund saved up. Once that was saved up then we split our "extra" money 25/75 towards continuing to build up the emergency fund and reducing our debt. We should be debt free by July. :happydancing:

County Mike
03-01-2011, 01:36 PM
We didn't pay any extra down on our debt until we had a little emergency fund saved up. Once that was saved up then we split our "extra" money 25/75 towards continuing to build up the emergency fund and reducing our debt. We should be debt free by July. :happydancing:

Agreed. Still want that "emergency money" but paying down the debt is of big importance. If it's a credit card debt, I would choose to pay down the debt as quickly as possible and then rely on the card again IF an emergency came up.

I would also be debt free by the end of summer, except I'm about to buy a new car for Kelli. I do not carry credit card debt anymore. That was my financial downfall a few years back.

Chuck
03-01-2011, 01:57 PM
Agreed. Still want that "emergency money" but paying down the debt is of big importance. If it's a credit card debt, I would choose to pay down the debt as quickly as possible and then rely on the card again IF an emergency came up.

I would also be debt free by the end of summer, except I'm about to buy a new car for Kelli. I do not carry credit card debt anymore. That was my financial downfall a few years back.

We did a bit of a hybrid strategy... We had a few cards close to maxed out with a combined credit limit of a few thousand dollars. We put 100% of our extra income towards those until they were paid off. Once they were at a zero balance we had a few thousand dollars of "credit" as an emergency fund. Then we focused our attention on a emergency cash fund, once that was in place we attacked the remaining debt with the 25/75 approach to continue building our emergency cash fund.

VCURamFan
03-01-2011, 02:15 PM
Right now I'm working on building up about a grand of emergency money & then I'll be throwing all my extra cash towards paying off my college debts. Fortunately, most of my interest rates are relatively low, though I do have a couple that are around 7%, I believe. :unsure:

rearnakedchoke
03-01-2011, 02:45 PM
I have no debt.

i hear ya .. technically i have debt in a mortgage payment, but if i were to sell my house, the value has almost doubled in the last 8 years or so, so i would have some extra cash after i paid my debt ... i think having equity like in some sort of property where most of the time you are going to make money (location, location, location) is a smart thing .. yeah, it's not 100% sure, but what is nowadays ... i have some emergency funds, but i really don't need it as I have a line of credit to fall back on with a decent interest rate ...

Crisco
03-01-2011, 04:07 PM
Hoping to be debt free by may. Tax refund should wrap it up.

Pretty excited.

Twinsmama
03-01-2011, 05:01 PM
I hate to sound nosey but since you guys are putting it out there that you are almost debt free what does that mean to you? does it mean only mortgage or no mortgage? also if you are debt fee do you have college funds set up for your kids?

also for the people that rent do you consider rent a debt that you owe since you usually sign a lease for a specific time period and amount?

just wondering how so many people can be debt free soon when you are so young. our mortgage has another 16 years. we do have acreage and a new house with a detached shop so maybe you guys didn't start with as big as a mortgage as we did. just curious if i should do some financial reflecting on myself! i thought i was doing good but now i'm wondering what i'm doing wrong.

NateR
03-01-2011, 05:23 PM
I hate to sound nosey but since you guys are putting it out there that you are almost debt free what does that mean to you? does it mean only mortgage or no mortgage? also if you are debt fee do you have college funds set up for your kids?

also for the people that rent do you consider rent a debt that you owe since you usually sign a lease for a specific time period and amount?

just wondering how so many people can be debt free soon when you are so young. our mortgage has another 16 years. we do have acreage and a new house with a detached shop so maybe you guys didn't start with as big as a mortgage as we did. just curious if i should do some financial reflecting on myself! i thought i was doing good but now i'm wondering what i'm doing wrong.

I have monthly bills that I pay like rent, car insurance, internet, cell phone, electricity and water; but I pay for those month by month as I use them. So if I stop paying them, the service gets shut off. I never signed a lease with the current house I'm renting, everything was done by verbal agreement.

By debt, I'm referring to mortgages, financing a car, credit cards, loans, retail charge accounts, IRS debt, etc.

But, don't get me wrong, I'm not debt free because I'm some kind of financial genius. I had to declare bankruptcy back in 2002, when I got out of the Army; but I learned my lesson from that and I've been able to stay out of debt ever since.

BamaGrits84
03-01-2011, 05:39 PM
My boss was told at the closing on their house that paying just 1 extra house payment a year will get most 30 year loans paid off in 15 years. I checked it out with my mortgage co and they said the same thing.

rearnakedchoke
03-01-2011, 06:50 PM
I hate to sound nosey but since you guys are putting it out there that you are almost debt free what does that mean to you? does it mean only mortgage or no mortgage? also if you are debt fee do you have college funds set up for your kids?

also for the people that rent do you consider rent a debt that you owe since you usually sign a lease for a specific time period and amount?

just wondering how so many people can be debt free soon when you are so young. our mortgage has another 16 years. we do have acreage and a new house with a detached shop so maybe you guys didn't start with as big as a mortgage as we did. just curious if i should do some financial reflecting on myself! i thought i was doing good but now i'm wondering what i'm doing wrong.

this i am also wondering ... i have the same monthly payments, college funds for my kids ... i am still in my 30's, so i am not debt free and don't see it happening for a while ... at my current rate, my house will be paid off before i am 50, but by then i will probably have bought another house or other type of proprty ..

flo
03-01-2011, 07:09 PM
Thanks for sharing that, Buzzard; you've done a great job of it. It took a while but we now have done a few of thise things, increasing 401k contributions, putting raises immediately into mortgage pmt, etc. But I agree with Nate, it's more a matter of discipline or self-control. At least, it was in our case. That's just how I have to save - out of sight, out of mind.

Now, where's that other list?

:happydancing:

flo
03-01-2011, 07:12 PM
great story buzzard .. yes, saving money is a great habit .. i teach my kids the value of money and saving it ... right now, all the money i save (after vacations and such), i dump into my mortgage ... doing that over the last few years has taken so many years off my current mortgage ...

It's amazing what you can save, isn't it? I think we take 7-8 years off our mortgage and $50,000 in interest.

NateR
03-01-2011, 07:17 PM
Even if I had kids, I don't know if I would necessarily want to save up a college fund for them. I only say this because I know how I was at 18-20 years old. I never appreciated anything that was just handed to me. Even now, if I don't work for it, I have trouble assigning any value to it.

My parents were never able to save up enough money for us to go to college; but I ended up earning a full 4-year scholarship to any college of my choice in the state of New Mexico (based on my ACT scores). However, since I didn't really work for it (I never even studied for my ACT) and I never applied for the scholarship (it was just kind of dropped in my lap), I didn't really put any value into it. So I dropped out after two semesters and went back into the Army. However, after devoting over 10 years of my life to the military and earning my GI Bill, I was able to actually appreciate the doors that a college education would open when I re-enrolled in school in 2002.

flo
03-01-2011, 07:29 PM
I would say you are an over-achiever, Nate. Your folks must have been very proud of you.

I also think something earned is greatly appreciated and valued over something given. Just look at public housing projects.

Twinsmama
03-01-2011, 08:10 PM
My boss was told at the closing on their house that paying just 1 extra house payment a year will get most 30 year loans paid off in 15 years. I checked it out with my mortgage co and they said the same thing.

Those numbers are very WRONG!! I hope you aren't making an extra payment each year hoping that your house will be paid on in half the time it was actually financed for! (unless you have a very high rate of interest , I'm talking well over 10%) Don't get me wrong paying more towards you balance is great but even with a 6% interest it would save about 5-6 years. That itself is a great thing but sure isn't cutting your mortgage to 15 years!

Buzzard
03-01-2011, 08:39 PM
great story buzzard .. yes, saving money is a great habit .. i teach my kids the value of money and saving it ... right now, all the money i save (after vacations and such), i dump into my mortgage ... doing that over the last few years has taken so many years off my current mortgage ...

When I bought my house in 1995, I put 5% down on a 30 year mortgage at 8%. Some years later, I refinanced it for 30 years at 6%. Later when the rates dropped really low, I refinanced for 15 years at 4.5%. I also slap extra money every month into the mortgage. I think I'm putting in an extra $150 to $200 a month now, and am thinking of just paying the thing off, but don't want to use up my reserves.

Some things are on the burner now so perhaps the decision will be made for me if things work out.

Thanks for the positive responses all and sharing your stories too.

BamaGrits84
03-01-2011, 09:04 PM
Those numbers are very WRONG!! I hope you aren't making an extra payment each year hoping that your house will be paid on in half the time it was actually financed for! (unless you have a very high rate of interest , I'm talking well over 10%) Don't get me wrong paying more towards you balance is great but even with a 6% interest it would save about 5-6 years. That itself is a great thing but sure isn't cutting your mortgage to 15 years!

I haven't done that myself, I'm just tell you what I was told. We plan on selling in 2 years so I'm more into saving $ to put 10% down on whatever we buy. We have only had our house for 4 years so we don't have much equity.

rearnakedchoke
03-01-2011, 09:07 PM
It's amazing what you can save, isn't it? I think we take 7-8 years off our mortgage and $50,000 in interest.

yup .. and taking advantage of the low interest rates helps ...

bradwright
03-01-2011, 09:29 PM
i do have a lot of debt but my assets outweigh my debts.

i just bought a new truck a couple of months ago and i could have taken money out of investments to pay for it but i got a loan at 3% locked in for the length of the loan and my investments are paying 4.25% in the form of a GIC.
so if i would have cashed in some of my investments to pay for it i would have lost money in the process.

so sometimes when you purchase something its not so bad to get a loan to do it....especially when money is as cheap to borrow as it is right now.

Buzzard
03-01-2011, 10:13 PM
I've only owned 2 new cars. The last one I got in 2003 was for 60 months at 0%. I only got that because my other car was destroyed when I got hit while waiting at a red light. What sucked for me was that the car that got ruined was one which had only 6k miles on it when I bought it and I got it for a completely awesome deal, paid cash for it and had only put an additional 6 to 9k miles on it.

NateR
03-01-2011, 11:26 PM
Does anyone here invest in gold or silver? That's something that I could probably get into.

County Mike
03-02-2011, 01:18 AM
I don't really invest in anything. I have a 401K but someone else decides where to invest most of that money. I found one that is guaranteed not to lose money but when the market is strong, the rewards aren't as big. I chose the safe route over the potential for big gains.

bradwright
03-02-2011, 01:39 AM
Does anyone here invest in gold or silver? That's something that I could probably get into.

i dont have any money in gold or silver but gold seems to me to be awfully high right now and honestly i dont see it going much higher.

now having said that watch it double up in the next few weeks...silver on the other hand might be a better investment...but honestly i dont have a clue.

NateR
03-02-2011, 01:44 AM
i dont have any money in gold or silver but gold seems to me to be awfully high right now and honestly i dont see it going much higher.

now having said that watch it double up in the next few weeks...silver on the other hand might be a better investment...but honestly i dont have a clue.

If gold starts doubling in value in a matter of weeks, then we might need to start worrying:
http://3.bp.blogspot.com/_sKpkmBkdeVM/SoWoU_QsU-I/AAAAAAAAH0I/1_uzTD-5NWw/s400/Weimar+hyperinflation.gif

It's actually this kind of thing that makes me think stuff like gold and silver is a much better investment than stocks or savings accounts.

bradwright
03-02-2011, 01:55 AM
If gold starts doubling in value in a matter of weeks, then we might need to start worrying:
http://3.bp.blogspot.com/_sKpkmBkdeVM/SoWoU_QsU-I/AAAAAAAAH0I/1_uzTD-5NWw/s400/Weimar+hyperinflation.gif

It's actually this kind of thing that makes me think stuff like gold and silver is a much better investment than stocks or savings accounts.

i dont know for sure Nate but it seems to me if a person thought the worlds economies were going to keep sliding off the cliff then yes i would say dump everything you can into Gold and Silver.

but if the economy as a whole starts to make a recovery then the better it gets the lower Gold and Silver prices will get.

its a gamble either way i think.

it would be nice if someone here knew something about it because i would be interested in finding out more.

Mark
03-02-2011, 01:55 AM
Does anyone here invest in gold or silver? That's something that I could probably get into.

Ive got some I bought from a buddy.

bradwright
03-02-2011, 01:57 AM
Ive got some I bought from a buddy.

what did you buy ?

NateR
03-02-2011, 02:05 AM
Ive got some I bought from a buddy.

Silver's up to $34 an ounce, so you're not upside down on that purchase anymore. :Whistle::wink:

If I ever get my hands on any gold, then you get dibs if I decide to liquidate. :laugh:

Mark
03-02-2011, 02:09 AM
Silver's up to $34 an ounce, so you're not upside down on that purchase anymore. :Whistle::wink:

If I ever get my hands on any gold, then you get dibs if I decide to liquidate. :laugh:

You can keep it in my safe... again.

Mark
03-02-2011, 02:11 AM
what did you buy ?

some silver.

NateR
03-02-2011, 02:14 AM
You can keep it in my safe... again.

Gold's only $1400 an ounce right now, are you sure you're going to have enough room in your safe?

Mark
03-02-2011, 02:15 AM
Gold's only $1400 an ounce right now, are you sure you're going to have enough room in your safe?

If you can fill the safe i will buy another one for you to use.

County Mike
03-02-2011, 02:22 AM
It's funny that when the world is in financial crisis, gold and silver become more valuable. It's not like anyone NEEDS gold or silver. I would think fuel, food, etc. would become the most valuable items.

Mark
03-02-2011, 02:22 AM
Gold's only $1400 an ounce right now, are you sure you're going to have enough room in your safe?

I found this on the internet.


If you had put money into gold in 1980 at $612 and held onto it until today your average annual return would be just 1.1%

This was from 10-7-2008
and this

It is true that purchasing gold is not a good way to increase purchasing power, but it is an excellent way to PRESERVE purchasing power.

NateR
03-02-2011, 02:26 AM
I found this on the internet.


If you had put money into gold in 1980 at $612 and held onto it until today your average annual return would be just 1.1%

This was from 10-7-2008

Yeah, but gold was only $800 an ounce in 2008, it's getting close to double that now. Of course, I'm not sure how much of that is just speculation based on economic uncertainty.

Mark
03-02-2011, 02:35 AM
Yeah, but gold was only $800 an ounce in 2008, it's getting close to double that now. Of course, I'm not sure how much of that is just speculation based on economic uncertainty.

IDK I think that you are on the wrong side of the market. If you buy at 1400the high side and it goes down to 500 then you have lost 900. If you wait till the low side 500 all you can loose is 500 and you cant loose it all, it will be worth something. I try to buy at the low.

NateR
03-02-2011, 02:36 AM
It's funny that when the world is in financial crisis, gold and silver become more valuable. It's not like anyone NEEDS gold or silver. I would think fuel, food, etc. would become the most valuable items.

Well, gold and silver is what most monetary systems are based off of and has been valuable to just about every known human civilization in the history of our planet. American dollars used to be based on gold until 1971. Now it's based on nothing but our "good name."

The difference is that gold will never be worth 0, the same can't be said for the US dollar.

NateR
03-02-2011, 02:42 AM
IDK I think that you are on the wrong side of the market. If you buy at 1400the high side and it goes down to 500 then you have lost 900. If you wait till the low side 500 all you can loose is 500 and you cant loose it all, it will be worth something. I try to buy at the low.

I know, I was just joking about buying gold at $1400 an ounce. I might pick up some of the smaller 1 grain bars though. Those are valued at about $2.98 each. There is still a potential to lose money, but it will never be completely worthless.

Some people are predicting that gold could reach up to $5000 an ounce, which could only mean that human civilization itself has imploded.

Chuck
03-02-2011, 12:35 PM
I know, I was just joking about buying gold at $1400 an ounce. I might pick up some of the smaller 1 grain bars though. Those are valued at about $2.98 each. There is still a potential to lose money, but it will never be completely worthless.

Some people are predicting that gold could reach up to $5000 an ounce, which could only mean that human civilization itself has imploded.

I think Scripture pretty much guarantees that... it's just a matter of time really...

Tyburn
03-05-2011, 11:58 PM
When I came back from London I had gone through my overdraft and out on the otherside...all I paid was bank charges...never any debt. Mother sat down and developed a plan. She would pay the bank charges, but the debt was mine to clear. So I lived off thirty pounds per week for years...and after about three years I cleared my overdraft.

I dipped slightly into it last year for a holiday...but only because I knew I had the funds to recover within six months. I still live off thirty pounds...I dont have much of a social life...thats why I'm always online...its free evenings entertainment :laugh:

rearnakedchoke
03-15-2011, 03:39 PM
Another way to save money? Invest your money? How many people here do that?

I heard something on the radio this morning, don't know if it is true, but will look for a link or something .. When Apple came out with their first IMac or something like that in the mid 1990's, the cost was $3000 or so ... if you bought the computer, it would be worth nothing today ... but if you would have invested that same money in the company and purchased stock, it would be worth over $100,000 ... again, don't know the truth in this and that hindsight is 20/20 .. but i know a few people who have made good money in investing ..