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A few "Thou shalts and Thou Shalt Nots" for you to consider
Old 03-19-2010, 03:22 PM   #1
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A few "Thou shalts and Thou Shalt Nots" for you to consider

Nothing that new here for most of us LBYMers, but a nice list that would be difficult to argue with.

Thou shalt not live beyond thy means. Almost half of Americans reported having trouble keeping up with monthly expenses and bills, according to a 2009 survey on by FINRA Investor Education Foundation. Nearly one-quarter reported overdrawing their checking accounts. Know exactly how much money comes in, how much goes out and make those numbers match up. There are a million creative ways to budget, but start by tackling your biggest costs housing, autos (buy used, for cash), health insurance and for parents, child care. (Try this calculator to figure out if a second income is worth it after taxes, child care and other costs.)

Thou shalt set aside cash for emergencies. Only 49 percent of FINRA respondents reported that they had set aside funds sufficient to cover expenses for three months in case of sickness, job loss, economic downturn or other emergency.

Thou shalt not carry a revolving balance on thy credit card. According to the FINRA study, 51 percent of Americans have carried a balance from month to month resulting in interest charges; 29 percent made a minimum-only payment; and 23 percent were charged a fee for late payment. Thou shalt not get sucked into the debt-settlement trap.

Thou shalt not use a financial product without searching for the best deal. The FINRA survey found 63 percent don't shop around for credit cards, half don't shop around for auto loans, and a third don't shop around for mortgages.

Thou shalt save early and often for expensive goals. Only half of FINRA respondents had a retirement plan through an employer; 28 percent had another kind of savings plan. Only 41 percent of parents had saved anything for college.

Finally, thou shalt not be overconfident whilst demonstrating financial ineptitude. When asked how good they are at dealing with day-to-day financial matters, half of FINRA survey respondents with credit cards and checking accounts gave themselves the top score of 7. However, a quarter of these respondents separately indicated they engaged in behaviors that generate fees or high costs, such as using credit cards for cash advances, paying late payment or over-the-limit fees or overdrawing their checking accounts. Among those who gave themselves a score of 6, 40 percent engaged in these wealth-destroying behaviors.
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Old 03-19-2010, 06:51 PM   #2
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Regarding your last paragraph -- it has been my observation of life in general, not just financial matters, that there is often a negative correlation between confidence and competence.

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Old 03-20-2010, 02:50 AM   #3
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VII. Thou shalt not invest in that which thou dost not understand, neither shalt thou sign that which thou hast not read.

VII. Thou shalt not invest all that thou hast in a single asset class.

IX. Thou shalt not cosign a loan.
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Old 03-20-2010, 08:44 AM   #4
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Saving for college for your kids is not a particularly good idea. The government loan programs(and only the very very wealthy can afford college without loans NOW) are not particularly helpful to parents who dutifully saved for their kids future.

The loans programs are most helpful to those parents who saved absolutely nothing.

Even state schools now cost $17000 a year and private schools are up to $40K +. How anyone but the very very well paid can afford to save even a small portion of the $160,000 necessary to put just one child through college without loans while starting out, buying a house, taking care of little kids, and saving for retirement ......IS BEYOND ME.

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