Living Check To Check: Saving Too...

[MYPROcheckGRESS]

How do I get out of this cycle? It seems that I run dry the week b/f I get paid (always).

I do not dip into my savings (saving up for emergency fund more aggressively than paying down debt) or alter my 401-K deductions (currently maxed). The former is done for physcological reasons; I just feel more secure.

Anyway, advice?

Thanks,
CMP

[maddythebeagle]

Most people here live below their means and save a high percentage of their incomes. You could be a little more specific and list your budget and/or if it is possible to pursue a higher paying job.

these guys have more posts like this.

http://www.simpleliving.net/forums/s...sp?FORUM_ID=13

[Coach]

CMP, my guess is that you fail to budget. If you know at the beginning of the month where every dollar is supposed to go, then at the end of the month comparing actual to budget should answer your question. It's a pain, but tracking every dollar in and out is really illuminating.

Coach

[gindie]

Go get a book called "Total Money Makeover" by Dave Ramsey.* He is the hottest personal finance guy around right now.* He has been featured on 60 Minutes and has his own daily radio show on almost 300 stations.* His website is www.daveramsey.com

He is very big on budgeting and paying off ALL debt.

[Nords]

Originally Posted by gindie

He is very big on budgeting and paying off ALL debt.

I'd have a tough time taking advice from a guy who already burned through his first million and went into bankruptcy before "seeing the light".

But I can understand why he'd think that all debt is bad!

[Marshac]

Originally Posted by MYPROcheckGRESS

How do I get out of this cycle?* It seems that I run dry the week b/f I get paid (always).

Make a budget and stick to it. Pay in cash. Lose the debit card. If you find that you really aren't making enough to max the 401k AND pay for your living expenses, then your next step is clear- reduce your 401k contributions, or find other areas where you can cut back (cell phone, internet, cable, etc).

[chris2008]

I always found that a budget is fine, but as a starting point it is better to first TRACK every cent that you spend by WRITING YOUR DETAILED EXPENSES DOWN for at least one month, better 3.
You will probably find that writing it down will already reduce some. Then you can analyse, implement correction measures and create a budget that can stand the reality test.

If you get a raise or if additional money comes in for overtime or whatever, put half of it to savings.

Other than that: bring your own lunch to work, cook from scratch, do not buy more food than you will use.
Be carefull when you feel that "you deserve a treat". Most of all you deserve to live in good financial conditions.
Get "The complete Tightwad Gazette" and "Your money or your life" from a library. Lots of ideas for living well with what you have.

[unclemick]

Hmmm

I always used the 'handgrenade' budget - aka autodeposit paycheck AND then autoDEDUCT to 401k(max always) and IRA and then to Vanguard. Made sure it was always MORE than I 'knew' I needed to live on.

Then of course we lived paycheck to paycheck - by adjusting actual spending in the stretch. Once 'gone' as it were - it was easier(for us) to change actual spending patterns and only 'dent' the taxible investments at Vanguard for occasional emergencies. Budget was approximate - no. 2 pencil and reviewing past check resister. bank statements, CC statements, etc.

Per POGO - we each have to look in the mirror - and come up with a method that fits our personality.

heh heh

[virginia]

My procheckgress (what a name!)

You are very much like myself. I also was more willing to save than pay down debt and never wanted to take out of savings. It is a psychological thing, and even if it costs you a few bucks in the long run, if it makes you feel secure about your money, then keep doing that.

I also, have always seemed to run out of money before the next pay period. Luckily, my check is split into 2 payments a month. I agree with unclemick2. Already, although I get paid tomorrow, last night I deducted basically every bill that I have for the next two weeks, including savings. Now, I take the leftover amount, which for me is usually around $250 (I have budgeted myself pretty restrictfully - I know that's not a word) - to the point that all I have leftover is essentially what I need for the 2 weeks, but I try to limit myself within that $250 - that's for dry cleaning, food, gas, movies, all the miscellaneous expenses. I fill up my car with gas first, and try not to spend much money on the first weekend.

Once you have a lot of money saved, you'll be amazed at how much further that nominal amount will go (for me the $250). I think that once you have some security in the bank, and are not stressing as much about money, and know that you could buy pretty much anything that you desire (on a day to day basis, I'm not talking about a car or anything), that you become more satisfied with yourself, and may actually spend less money, or at the least may be more SATISFIED with the money you have, as opposed to the money you think you don't have.

I also have an "invisible cash cushion" in my checking account that helps me out with unexpected expenses, or just for things that I want to have, and don't budget for. That also comes in handy.

[free4now]

One thing I've found really useful is simply delaying purchases. If you're paying say 20% in interest on your credit cards, then delaying the purchase of any item by a year and instead putting it towards the credit card is effectively like getting a 20% discount.

And more importantly, some of the things that you thought you really wanted turn out to be things that in a year or so you don't really decide to buy.

Psychologically I think it works because you are not telling yourself you can't have whatever, you're telling yourself that you will have it later.

Then again patience has always been one of my strong suits so maybe that is why it has worked for me.

[Helen]

I go the auto savings route. My before and after tax savings are automatically withdrawn from my checking account. I find that I will automatically cut back on my spending when my accounts get low, until I get back to a comfortable level.

I have a spreadsheet set up that shows me how much to increase my savings every year and where to put the new money. It's like my roadmap to early retirement.

I love the autopilot method.

-helen

[MJ]

Buy or borrrow from your library Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence by Joe Dominguez, Vicki Robin

The book helps you determine how much you really earn per hour so you can decide whether the life draining value of stuff you want to buy is really worth the number of hours it takes you earn the money.

MJ

[azanon]

Go get a book called "Total Money Makeover" by Dave Ramsey. He is the hottest personal finance guy around right now. He has been featured on 60 Minutes and has his own daily radio show on almost 300 stations. His website is www.daveramsey.com

He is very big on budgeting and paying off ALL debt.

I beg to differ. This guy would have you give 10% of what you make to some local church. If i were coming up short on money, I wouldnt start to fix the problem by giving away 10% of what I make!

Also, because this guy got burned in "his former life" for excessive borrowing, he's now overly conservative, and would rather you pay off all debt but a mortgage before even investing in IRAs. Again, bad advise.

[Marshac]

Originally Posted by azanon

I beg to differ.* This guy would have you give 10% of what you make to some local church.* If i were coming up short on money, I wouldnt start to fix the problem by giving away 10% of what I make!* *

For many people, tithing is not a negotiable budgetary line item.

[geeman]

I have all of my Emigrant Direct and Vanguard accounts set up so that they automatically remove funds from my checking account. This way I have no time to spend the money. I guess this is the only way I can save, but it works for me.

[azanon]

For many people, tithing is not a negotiable budgetary line item.

I guess by tithing, you mean the modern day concept of it.* In the Old testament, they actually bought the "tithe" in, and later they all ate it.* In other words, it was food. Yes, this is true (I can find the verse if you want), and no, your local church will not tell you this because they want their money.

But this is still besides the point.* Common sense dictates you dont solve monetary shortages by giving money away, and that's what David Ramsey supports.

[Martha]

Originally Posted by azanon

Common sense dictates you dont solve monetary shortages by giving money away

I bet the nuns in our waiting room disagree with this.

All the years I was in the bankruptcy business, I never saw anyone who ended up in bankruptcy because they gave too much to the church.

[azanon]

All the years I was in the bankruptcy business, I never saw anyone who ended up in bankruptcy because they gave too much to the church.

As if someone would actually tell you that's why they are bankrupt. In the event that you went over their finances/budget, the last thing both and them would likely point to as a problem in their budget would be their tithe (same for Ramsey); neither of you realizing that giving away 10% to anything does matter. What's the difference, mathematically, between tithing 10% and gambling away 10% (besides the tax break on the former). See answer below.

You can believe all day long "God" will give you the 10% back and more, but that doesnt make it so, Martha. Many a preacher and entities have become fithy rich by getting this belief out (see the various televangists for example).

There are plenty of great reasons to give money, but a very naive and poor one is to actually think it helps your finances. The tax break just lessens the loss.



Answer: None.

[Martha]

Originally Posted by azanon

As if someone would actually tell you that's why they are bankrupt. In the event that you went over their finances/budget, the last thing both and them would likely point to as a problem in their budget would be their tithe (same for Ramsey); neither of you realizing that giving away 10% to anything does matter. What's the difference, mathematically, between tithing 10% and gambling away 10% (besides the tax break on the former). See answer below.

You can believe all day long "God" will give you the 10% back and more, but that doesnt make it so, Martha. Many a preacher and entities have become fithy rich by getting this belief out (see the various televangists for example).

There are plenty of great reasons to give money, but a very naive and poor one is to actually think it helps your finances. The tax break just lessens the loss.



Answer: None.

Bankruptcy petitions have to include a budget of income and expenses. Debtors also have to disclose money paid to third parties in a certain time period. And as a debtor's attorney and trustee I would quiz them about these things. In fact, gifts to churches shortly before filing bankruptcy may be recoverable from the church.

You can generally easily tell why people filed bankruptcy when you look at who are their creditors and what income the debtors have. Too many medical bills. Too many credit cards. Not enough income Etc.

I have no idea if God will provide. But I wonder if people who are disciplined enough to regularly give 10% to the church are also disciplined enough to keep control over credit card debt and other voluntary debt that could lead to bankruptcy.

Leading a disciplined life certainly can help your finances.

Just a thought. And I like picking on you, Az.

[Nords]

Originally Posted by Martha

I have no idea if God will provide.* But I wonder if people who are disciplined enough to regularly give 10% to the church are also disciplined enough to keep control over credit card debt and other voluntary debt that could lead to bankruptcy.

Leading a disciplined life certainly can help your finances.

They also probably follow that 11th commandment, "The Lord helps those who help themselves".