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September 1, 2012 6:50 PM   Subscribe

What financial rules do you follow that you'd suggest to others?

I spent most of last year paying down several years' worth of credit card debt. I've spent most of this year trying to put myself into position to ensure I'm never in that position again.

I had the idea a few days ago to create a list of rules for myself to follow. Some of them I've cribbed from other people; some of them are just common sense. Either way, I tend to do well when I have some kind of standard to hold myself too.

While I'm putting this together, I thought I'd come on here and see if the hive mind has anything that I might not have thought of. I'm not necessarily talking about things like "save 3-6 months' expenses and don't touch it unless there's an emergency" or "spend less than you earn and invest the difference" or anything that's more commonly known, though there's nothing wrong with those and I don't mind hearing them again.

By way of example, there was this story going around a couple years ago about a woman who saves every five dollar bill she gets. I did this for a year and it does add up pretty quickly.

Whatcha got for me, guys and gals?

(Please note: I realllllllly don't want to turn this into a debate over the relative merits of Idea A vs. Idea B. I'm sure it won't become that.)
posted by andrewcilento to Work & Money (55 answers total) 88 users marked this as a favorite
 
In general, I find stories like mentioned to be less than helpful; if you have excess cash to save (as said woman does), you have too much cash. In other words, stories like this only help if you have too much money around already. The solution isn't to "hack" your habits to save that money, it's to never have that money around and instead direct it straight to an investment account.

One thing that helps me is to live such that I don't correlate my lifestyle/expenses with my income. If I receive an increase in income, I attempt to save the entirety of it rather than spend more money. Since I enjoy my life as-is, there's no marginal benefit to spending more money. So, I just don't.
posted by saeculorum at 6:56 PM on September 1, 2012 [3 favorites]


Never confuse spending on a discounted item with "saving" money. If you buy something that cost $250 that normally retails for $1000--especially if you wouldn't have purchased it otherwise--remember that you spent $250 and don't kid yourself that you "saved" $750... unless you had already budgeted $1000 for it and them promptly banked/invested the difference.
posted by carmicha at 7:04 PM on September 1, 2012 [18 favorites]


I don't use any silly gimmicks like that. You should have a coherent financial plan and budget that makes it possible to do the right thing automatically and easily. People like to make this seem complicated, but it's not. You should have the most basic plan that possibly can let you meet your goals, and nothing more. (This is for your basic budgeting--investing can get more complicated.)

I put N% of every paycheck into my savings accounts every month. It's set up automatically and I never touch it. N should be somewhere from like 15+ probably (ideally much more), and whatever amount it is, it should be enough that your spending money feels a little tight, which will encourage you to watch it closely and spend it conscientiously. If you can't swing at least 15, see if you can either make more money or spend less, so that that number goes up.

The great thing about this is that you can spend the rest of your money on literally anything without damaging your finances. You'll know if you're spending too much money, because you'll find yourself running out of money at the end of the month. In that case you need to spend less, make more, or save less.

How do you know what N should be for you? Well, you make a spreadsheet. The top line is your monthly salary after taxes. Then, each subsequent line is a thing that you spend money on. This is not complicated. There are about 5 major things: rent, food, healthcare, transit. Add one more line item, which is your savings (your N.) Whatever is left after that is your dicking-around money. That final number needs to be enough to sustainable. If it's negative, you need to make more, spend less, or save less.

Beyond that, I wouldn't even bother tracking your money. As long as you aren't running out of money every month, you know that you're staying within your budget and saving N% every month.

The only other "rule" I have is that credit cards are paid in full every month, no matter what, even if I have to dip into my savings. I feel like an irresponsible ass every time that happens, so I make sure it doesn't happen much.
posted by !Jim at 7:14 PM on September 1, 2012 [18 favorites]


Every time I go to the grocery store I take out $20 in cash & put it into earmarked savings. (In my case, it's gone toward my kids' college fund.) It's made me save about $14k for them over the years, absolutely painlessly, but it also made me a better meal planner, which has saved who knows how much more.
posted by headnsouth at 7:19 PM on September 1, 2012 [3 favorites]


Seconding carmicha. It's not saved money unless you are already planing on buying the item anyway. A lot of people convince themselves that it's okay to spend money on things because they're "on sale" but it's still money spent and not money saved.

Also, my golden rule is to never "lend" money (books/DVDs/etc...) you want back. If someone asks you for $250 and you can't afford to lend it to them (you need it for rent/groceries/whatever) don't give it to them, no matter what. However, if you can make them a gift of $100 then give it to them. Don't expect it back. This will help so much with not only keeping your finances in order, but with keeping friendships and family relations intact.

On the other hand, never borrow money you cannot pay back.
posted by patheral at 7:19 PM on September 1, 2012


Before you make any purchase, ask yourself the following question. How will this item/service/whatever make my life more fulfilling, and is it worth the price?

If you feel good about the answers, buy. If not, walk away happy.
posted by 3FLryan at 7:21 PM on September 1, 2012 [5 favorites]


(pretty soon the above advice will be ingrained in you, and you will rarely regret any purchase, which is all you can really expect of yourself)
posted by 3FLryan at 7:22 PM on September 1, 2012


I set up automatic transfers from my checking account to my savings account each payday. I don't have to think about it, and I don't even miss the money since I've learn to make do without it. But it adds up fast!
posted by ThatCanadianGirl at 7:28 PM on September 1, 2012


Never co-sign. Cash on the barrel.

As far as life strategies go... do more with less. Not only does this lead to a simpler, less stressful life but it leads to lots of practices like renting instead of buying. You'd be surprised what you don't really need to own.
posted by shew at 7:41 PM on September 1, 2012


My best advice is to max out your 401k (or whatever form of deferred compensation plan you have). It really adds up, particularly if you get any kind of employer match. Even if you don't, any amount you put in is deferred--as in you don't pay tax on it. You're effectively paying a (much) lower amount in taxes AND saving for your future, and then saving ON the taxes you're not paying. Win-win-win. And Future You wins because you've saved all this money.

Even if you can't max out your 401k, even $20 per pay check is about $520 per year--and that's without any interest added on. That's $520 you don't have to pay income taxes on.
posted by rybreadmed at 7:47 PM on September 1, 2012


Another one: there's wisdom behind "penny wise and pound foolish." Many people spend their lives making gigantic financial transactions without realizing it or without considering how much money it costs them.

Consider someone buying a $200k house with a 30 year mortgage. The difference between a 4% interest rate and a 5% interest rate is $42,000 over the course of the mortgage. Most people would not think a $200k house and the $240k house are "the same price", but a lot of people would not consider refinancing their mortgage to optimize interest rates, nor would they shop mortgage brokers to save a fraction of a point on their mortgage.

Consider someone taking a job after college for $50k at the age of 21. That's a pretty good wage, but let's say they were particularly lucky and also had a $55k offer that they rejected because they didn't like the city. I value living somewhere where I live, and I might even pay $5k to live somewhere I like. However, that's not the real cost here - most people's wage growth is based on previous salary. Assume a 2.7% wage growth, as has been typical over the past 30 years or so. Over a 40 year career, this assumed person would earn $3.523m with the wage they took - but $3.876m with the higher wage. Similarly as before, many people would not ask themselves whether $352k is worth living in a nicer city.
posted by saeculorum at 7:50 PM on September 1, 2012 [4 favorites]


I track every cent I spend now, and it has really opened my eyes. I used to vaguely know how much I spent, and how much I had left, but my spreadsheet not only tells me how much I spend on what (I was, oddly enough, spending way too much money on food and never realizing it), but also what my average weekly spending amount is, which allows me to put an extra amount into savings at regular intervals.

I also have a bi-weekly automatic deposit into a separate checking account that has a 5-day hold before funds become available. I have a savings account that I can use for immediate emergencies, but that money is too easy to take out on a whim, so the "offsite" savings is a really big help.
posted by xingcat at 7:55 PM on September 1, 2012 [1 favorite]


Make a list of all the appliances (and appliance like items) you have/need/want. Starting with the big/expensive/critical ones (A/C, Furnace, Water Heater, Washer/Dryer) and working your way down to the smaller/less expensive ones (Microwave, Computer, blender, etc.). Next to each item list how much it costs brand new, how often it needs to be replaced, and how old your current model is. Use this information to calculate how long you have until you need to replace each item and how much money to you'll need to save per month to do so. Then put that much aside each month.

Set a reminder (in whatever calendar program you use) for each items expected end of life. When it's time, shop around for the best deal and, replace it. After replacement, repeat.

While you're at it you can add a maintenance budget for each item, along with reminders to do said maintenance.
posted by zinon at 7:56 PM on September 1, 2012 [2 favorites]


I second the automatic transfer strategy. I use this to follow the rule of "Pay yourself first."

I chose an amount, $X, that I wanted to save each month and I treat this as though it were a bill — I have to have this amount set aside before I can spend money on non-essentials. It was a stretch at first, but over time I adapted my budget to get by on a smaller amount and I get to watch my savings grow faster than they otherwise would have.
posted by FreelanceBureaucrat at 7:59 PM on September 1, 2012 [1 favorite]


1) Ongoing expenses are almost always more expensive than buying something outright.

Example: My old phone cost me $200, and with all of the hidden fees the "unlimited" plan cost me pretty close to $100/month.

My new phone cost me $385, if you include the SIM card. The pay-as-you-go plan costs me exactly $45/month. The phone pays for itself in a few months.

Likewise, switching to CFL's saves me close to $100/yr. Up-front costs are not to be feared... it's the recurring expenses that kill you.

2) Buying on credit is usually cheaper than saving up for it these days. If the APR is at or around 3%, you're beating inflation. If you can buy at zero percent financing, do it, as it increases your credit score, and saves you money as inflation happens.

2a.) Be aware things can change in a heartbeat. Lock in the interest rate while you can. Avoid variable interest loans like the plague.
posted by Slap*Happy at 8:04 PM on September 1, 2012 [2 favorites]


I printed something and hung it on my wall...


"Compound interest is the eighth wonder of the world.
He who understands it, earns it ...
he who doesn't ... pays it."
posted by yoyo_nyc at 8:08 PM on September 1, 2012 [2 favorites]


Automatic investment plan for long term savings. For example, a monthly withdrawal from your bank account to your low fee index fund account at Vanguard or Fidelity, first for IRA (if you don't need the cash before retirement) and then for non-retirement. Most people who don't set up automatic investments end up procrastinating and procrastinating and procrastinating.
posted by Dansaman at 8:12 PM on September 1, 2012


Although I have a few credit cards, I only carry one (lowest APR). It limits my capability to impulse buy. If I want to keep a card but not use it, I cut it up.

Likewise, if I'm going out for a night on town, I set a spending limit and bring only that amount of cash with me, leaving the cards at home.
posted by DoubleLune at 8:25 PM on September 1, 2012


1) Automatic savings, VERY IMPORTANT
2) IF you can learn to handle credit cards, they can PAY YOU!!! For instance, I get back 6% on all my groceries, 3+ percent on gas, 2% on travel, 1% on everything else. Sometimes even more.
3) If you can find ANYTHING you like to do on the side, like a hobby, sideline, or second job it is a tremendous asset. Not only can it generate extra cash, it could be very handy should your primary livelihood temporarily or permanently disappear.
4) YOYO in NYC nailed it... Passive income, compounding over time, is a marvelous thing.
5) You don't need a new car. Really.
6) Always remember, there is likely NOTHING you can buy that will feel as good as financial freedom.

hope some of that is useful. Those things have made a world of difference for me.
posted by jcworth at 8:26 PM on September 1, 2012 [1 favorite]


Going out to eat or to drink or to see a show is expensive. It's a treat. A luxury. Monthly or weekly even is perfectly OK but close to daily will drag you down fast. Packing your lunch every morning will save you a lot and others will think you're cheap but it's not being cheap it's just not being dumb.

(The "never eat alone" people are talking about a class of living which is beyond most of us.)
posted by bukvich at 8:28 PM on September 1, 2012 [2 favorites]


I like to have one day per week where I consciously don't spend any money. I look at my calendar and pick the day that's most convenient for that week and don't buy anything in person or online on that day. The only time I break the rule is when I would end up spending more by not buying something that day. (Can't think of an example now, but I'm sure it's happened.)

I also try to have one weekend per month where I don't spend any money (other than for groceries, since I do my shopping on Sunday), and sometimes one week periods without spending any money. During these times I eat up what's in the pantry, go for bike rides and walks in the park, visit the library, and do home/car maintenance to take care of the stuff I already have.
posted by shortyJBot at 8:35 PM on September 1, 2012 [4 favorites]


I have two checking accounts. One is for all my fixed bills: mortgage, utilities, student loans and car payment, the amount of gas I need to commute and run some errands, insurance and I also deposit several hundred dollars a month to cover periodic expenses like health care deductibles or car maintenance. Those are the ONLY things I can spend that money on. The rest of my money is split between an online savings account which is incredibly inconvenient so once money goes in there it's basically dead to me and my "everything else" checking account. That's for food, clothes, entertainment, bike parts, dog toys, gas for road trips, camping gear, skiing gear etc etc Basically anything that's optional and not a long term savings thing like a vacation- consumer goods type spending. And that's the only debit card I carry with me. I put maybe 18-20% of my take home pay in this account each month.

Doing this has severely curtailed my spending "extra money" that isn't really extra at all but is needed in a few months for some routine maintenance or bill that I'm happy to forget about when I want a new jacket. Or skis, or a DVD set or a backpack for the dog or whatever. it's also cut my grocery bill in half and eliminated my eating out as that money is now earmarked for stuff I want more (like a new jacket). I was never an impulsive spender but I'm not the worlds best long term planner. AS it turns out my brain is just as happy fussing over a much smaller pot of money and as a few people have noted above this is all money I can afford to spend each month. I try not to but I can and it's not big deal, my electric bill is still paid and the mortgage is covered.
posted by fshgrl at 9:14 PM on September 1, 2012 [2 favorites]


My grandmother taught me the 10% rule: 9 cents of every dollar earned goes into savings, 1% goes to charity. It is really hard to follow this rule when you are making jack shit - both because the 10% bites hard, and because it's very difficult to see how 10% of a $100 pay check will ever add to anything. But it does, and it's magical. Just do it.
posted by DarlingBri at 9:24 PM on September 1, 2012 [4 favorites]


I cut back spending drastically once when working at a job I hated by asking myself, "Is this worth x hours at that awful place?" It almost never was. This tactic also helped me avoid compensating myself for the bad job by buying self-indulgent crap.
posted by carmicha at 9:58 PM on September 1, 2012 [3 favorites]


Oh, one rule I have is that when I get a raise, the entire increment goes entirely into savings. However, if you don't make a lot of money, this might be hard, but you should at least try to increase the amount you save, so that your savings rate grows faster than your costs.
posted by !Jim at 11:04 PM on September 1, 2012 [1 favorite]


As someone who struggled with money for a long, long time, here are three straightforward rules that helped me dig myself out of credit card debt:

1. Don't use credit cards. If you need to buy something, save up until you can afford it.
2. Transfer a set amount of money each month (even if it's only $50 or $100) into a separate savings account that isn't linked to you other finances.
3. Bring your lunch to work and don't buy coffees/sodas/snacks.

Lastly, and obviously this isn't always possible, but if it is, get a higher paying job. The difference between earning 30K a year and 50K a year is like night and day.
posted by emd3737 at 1:35 AM on September 2, 2012


I have two automated transfers every payday that suck the money away to not only a different account, a different bank. The large one is to savings, like many others here have described. The smaller one is to the BSF, or Buyin' Shit Fund.

I leave enough in my bank account to handle the day-to-day; rent and utilities, groceries and meals, haircuts and new underwears and what have you. The BSF accumulates the money I spend on occasional large purchases; for me, that's largely travel and electronic gizmos like a new computer. It works because it makes sure I have money to spend on these sorts of things, but it's separate from my long term retirement savings. And when I do spend BSF money, I don't need to worry or feel guilty that I'm taking it out of my savings, because that's a separate account.
posted by Homeboy Trouble at 2:17 AM on September 2, 2012 [1 favorite]


My no-budgeting budgeting system is still working well for me.
posted by flabdablet at 3:29 AM on September 2, 2012


For any loan payment (car loan, mortgage), make higher payments, substantially higher payments if you can afford them. When this becomes a habit, it is easy to continue.

Even making a regular mortgage payment every two weeks rather than monthly will make a big difference over time.
posted by yclipse at 5:32 AM on September 2, 2012


All our purchases are on our debt card, as soon as we make them though, I round their cost up to the nearest dollar. This creates a little bit of savings with each thing we buy, especially for say a $2 app purchase that actually cost $2.10 but is entered as $3.
posted by drezdn at 5:39 AM on September 2, 2012


You can set up multiple savings accounts at ING and have automatic transfers to them. So I have five right now, one for an emergency fund, and the others for various large expenses/purchases that I anticipate will happen. I made a budget to figure out how much I could put in weekly (because $5-$20 weekly is psychologically more manageable to me than $20-$80 monthly), set up automatic transfers, and have saved more money than I ever managed to before.
posted by Mavri at 5:56 AM on September 2, 2012


My only real rules of thumb are: If you have unsecured debt, pay down the highest interests debt first. If you don't, then pay everything off every month.

Also, I'm bad with saving, so I have money from my paycheck automatically deposited into a savings account so it's not there to tempt me, but then when I suddenly need an influx of cash ("oh crap, I need some roof repairs done!"), it's there.
posted by rmd1023 at 7:33 AM on September 2, 2012


Tip #1 - Don't waste too much time focusing on small expenses, like wondering what groceries are on sale (I mean, it's nice if you can manage it, but the amount of time wasted usually outweighs the savings). Try to find ways to pare down the big recurring expenses (like rent, car payments, insurance, etc.) This generally involves a one-time expenditure of effort that has a cumulative effect.

Tip #2 - Get a credit card that offers cash-back reward points on everything, and (most importantly) set it up for online payments so that you never miss one. For example, Bank of America has a credit card that offers 1% cash-back rewards on all purchases, 2% on groceries, and 3% on fuel. Furthermore, if you have a Bank of America account, you can have the credit line linked to that so you can review spending and make payments online simply by transferring funds with one click. This effectively saves 1% of every expenditure I make, and simultaneously improves my credit rating.
posted by wolfdreams01 at 7:45 AM on September 2, 2012


Cook for yourself.
Don't mistake wants for needs.
Pay off credit cards monthly.
Finance nothing but your house. Save and pay cash for everything else.
And yes, compound interest!
posted by fivesavagepalms at 8:03 AM on September 2, 2012 [1 favorite]


Credit cards: limit yourself to just one or two cards --- you don't need a card for every single store you patronize! Limiting the number of cards automatically limits the amount of debt you can put on them. Plus, of course, pay them off in full every month. Pay in cash for everything you can, especially consumables like groceries and gas --- doesn't it seem silly to risk paying credit card interest on somthing that's long gone?!? (And using a credit card for small purchases like fast food has to be the height of silliness!)

As for smaller hacks, there are two that I do: never ever spend any change; drop all of it, every single day, into a jar (break a dollar to get more change if you need it for vending machines or such); this usually adds up to around $300-400 a year for me.

Finally, everytime I write a check, I round it up to the next $50 in my check register, and subtract that larger figure from my balance --- writing a check for $110? I'll subtract $150.... it all part of the out of sight/out of mind school of savings.
posted by easily confused at 8:11 AM on September 2, 2012


Oh, and pay as much cash as you possibly can even for big stuff like cars: get the balance due down, and it keeps the interest down.
posted by easily confused at 8:12 AM on September 2, 2012


Don't marry, co-habitate or even give a second date to someone who is financially irresponsible. Being broke-ass is contagious. A corollary to this is, do not get into debt of any amount for love or affection.
posted by jadepearl at 8:53 AM on September 2, 2012 [6 favorites]


Maintain two (and a half) bank accounts.

#1) Go over your recurring expenses for the past few years and figure out what you need to pay just to keep the lights on (metaphorically, although electric does factor into this) - Rent/mortgage+tax, car loans, insurance, and electric/phone/cable will probably count as your big ones. Direct deposit that much plus 5% into the first account. Pay all your bills directly out of that account to make auditing yourself at the end of the year easier. If your recurring expenses change for some reason, adjust your deposits accordingly. And if this account doesn't grow slowly over time, increase your deposit amount by another 5% - You want to target it as growing very slightly faster than inflation.

#1.5) Contribute to your 401k and HSA at least as much as your employer will provide some level of match. If you make "enough", I would say just max them both out - But honestly most people can't afford to put away $17k+$3.1k (even pre-tax) a year. Note that an FSA doesnot equal an HSA, because you need to use-it-or-lose-it every year, so you don't really gain anything by dumping more than your actual (expected) medical expenses into it. I'll come back to this one below.

#2) Put the remainder of your income into account #2. Note that #2 doesn't mean "play money" - You will still have one-time expenses, such as down payments for a car, furnace repairs, ER visits (which even if you have medical insurance, you can still expect to blow a grand visiting the ER), and so on.

When account #2 gets above a level that you feel "comfortable" with as a safety net ($10k-ish makes a good starting number), roll the extra into an IRA; whether you prefer traditional (pre-tax, taxable on payout) or Roth (post tax, no tax on gains) depends on your personal preferences. Note that you can only dump $5k a year into an IRA ($6k if over age 50), so if you find yourself wanting to go over that contribution limit, you'll need to up your 401k and/or HSA contribution (and if you already have both of those maxed, you probably don't need our advice on how to handle your money, you need a real accountant).

Anything left over over your "safety" level, once you have maximized all your possible retirement contributions, you can consider "play" money. For most of us though, even into the "upper" middle class, that will come out to zero.

Finally, "audit" yourself every year to see where you've spent all your money, and if you can do better with some of your expenses. Can you do better switching from cable to DirectTV? Does a prepaid cell plan make sense for you? Should you refinance your mortgage (or look into buying rather than renting)? Did you spend quite a lot in any particular discretionary category such as eating out?


One final note if you have/want kids, on 529 plans - These vary a lot by state. In some states these count as a no-brainer good deal (for example, prepaid tuition plans let you pay for college 18 years from now, with pre-tax money, at this year's prices - And with inflation at 3% vs tuition growing at double-digit rates, you won't find a much better yield on any investment). In other states with strict rules on how you can invest them (such as "savings only" at a whopping 0.02%), even funded with pre-tax dollars they will cost you money over that same 18 years due to inflation. You should almost certainly talk with an accountant familiar with the applicable laws in your state before getting involved in a 529.
posted by pla at 9:17 AM on September 2, 2012 [1 favorite]


For your current or next car, keep it for twice as long as the car note. Let's say you have a 3-year loan. For the first 3 years, pay the note. For the next three years, continue to pay the same amount or more, but into a special account. When finished, you have the full amount for your next car. Pay cash for that car from the special account, and start making "payments" to yourself. Voila. No more interest on car notes for the rest of your life.

Get a 30-year home mortgage with a fixed rate. Ask how much your payments would be if it were a 15-year note. Pay the mortgage loan, and in a special account add the difference. This gives you the lower monthly obligation (in case something bad happens with your income), but at the end of 15 years you have the money to pay off the mortgage, or the flexibility to go longer if you are making more on that money than the mortgage costs in interest.

When you see a shiny new toy that you don't need but is awesome, ask yourself, "Is it enough just to know that something this neat exists?" For me, at least, usually it is and I put the money back in my wallet without buying yet another thing that collects dust or loses its appeal after a short time.
posted by Houstonian at 9:33 AM on September 2, 2012 [2 favorites]


Houstonian : in a special account add the difference. This gives you the lower monthly obligation (in case something bad happens with your income), but at the end of 15 years you have the money to pay off the mortgage

Not a bad idea, but one correction to that - You would also need to add the interest on the increased outstanding principle due to paying it down more slowly for the first 15 years of the mortgage. As an example, on a $250k note at 3% APR, this would cost you an extra $32k over the life of the mortgage... But it would still save you $34k vs letting it run to term (as an aside, those numbers look more favorable as the interest rate increases).
posted by pla at 10:14 AM on September 2, 2012


My mamma always told me to pay my bills before I played and credit cards are for convenience not for credit - pay them off in full each month.
posted by cecic at 11:22 AM on September 2, 2012


Buy quality and maintain your stuff. Example: clothes. I wash mine in the gentlest appropriate way -- coolest water, smallest amount of detergent, least amount of agitation. I'm sure I save money this way, but I especially like being able to keep the things I like for a long time.

Cars are another example. Click and Clack the Car Guys, who used to be on NPR, often stated that if you don't maintain the appearance of your car, you won't take as good care of it. For some, this is crazy -- but it's true for me.

Congratulations on paying down your debt!
posted by wryly at 11:26 AM on September 2, 2012


In addition to a lot of what has already been mentioned, I keep what I call a 'covet' list to help with impulse wants. I write down the thing I want and wait thirty days. If I still want it I shift it to the shopping list and then watch for sales. Then I buy it. Nothing has ever made it to the shopping list. The urge passes fairly quickly.

My only daily/weekly quirk for spending involves cleaning out my change purse once a week (I pay cash for anything under a hundred)-All coins go into a big jar. Seasonally I roll up the contents of the jar and usually have $200-300 dollars to deposit as a result. That becomes vacation money. Painless to roll during a movie too and no percentage lost to machines like Coinstar. Buy rolling tubes at the dollar store.
posted by pink candy floss at 12:27 PM on September 2, 2012 [1 favorite]


jadepearl said Don't marry, co-habitate or even give a second date to someone who is financially irresponsible. Being broke-ass is contagious. A corollary to this is, do not get into debt of any amount for love or affection.

Opposites attract and usually someone who has poor money-management skills can happily find love with someone with great money-management skills. Not a day goes by without my husband wanting to buy something/invest/give money away/spend on something that will not be of interest to him a week later (rolls eyes). I have taught him the basics, but he's pretty much abdicated responsibility for all financial issues to me because I'm better with money. He is a better cook and household fixer-of-scary-things like cars and toilets so it's win-win. Over the past twenty-five years we have evolved into a better system that sees him spending money on hobbies or books without clearing it with me only to a certain limit. He is not emasculated or kept, he just defers to the plan we put in place at his own request.

He maintains to this day that he would be homeless or in prison had I not taken over managing the money. I agree wholeheartedly.
posted by pink candy floss at 12:36 PM on September 2, 2012 [2 favorites]


Coins can be redeemed via Coinstar into an Amazon or Starbucks gift certificate, and they don't take a fee out. Since I shop at both places often, my coins go there.

I also don't carry my credit card with me in my day to day life - I keep it at home. For me, this prevents impulse buying with it.
posted by spinifex23 at 12:43 PM on September 2, 2012


Read "Know Your Worth" by Elizabeth Warren. Totally obvious stuff, still a game changer.
posted by unknowncommand at 3:15 PM on September 2, 2012 [1 favorite]


Sorry, the title is "All Your Worth".
posted by unknowncommand at 3:17 PM on September 2, 2012


I limit my exposure to advertising. I download TV shows instead of watching them live, I don't listen to commercial radio, and I use AdBlock on my browser. It is SO much easier to save money when you're not being bombarded with a cacophony of messages demanding that you spend. That doesn't mean I live an ascetic existance; I still make big purchases when I'm sure they'll improve my quality of life. It just means I get to plan my spending without the constant cultural noise of BUY IT NEW BUY THE BEST GO INTO DEBT DON'T WAIT BUY IT NOW nudging my decisions away from what's actually sustainable for me. This has done more for my finances than any of the techniques I used to use to 'trick' myself into saving. Now I save by default, because a lot of the time, I don't particularly want to spend. On the rare occasions when I do see ads on TV, they seem mesmerising yet completely absurd, like watching a charismatic sermon for a religion I no longer believe in.
posted by embrangled at 4:05 PM on September 2, 2012


I buy beforehand, the next time I need a computer mouse, I have a very nice $7 DX mouse ready for use and do not need to buy a $25 one in a local store.
I also order wearing parts (chain, cassette, tire) for my bike/MTB beforehand, so when they're needed, I don't have to pay shipping costs and wait 2 days.
Buying beforehand also allows you to wait for promotions before restocking.
posted by Akeem at 9:09 AM on September 3, 2012


If you have debt on a credit card month to month, stop spending on it. You're shooting future you in the knees. Stop buying stuff you cannot afford. If it's important enough to go into major debt for, go to the bank and get a loan for it; even the personal loans at the bank are a fraction of the interest rate on the average credit card.

If the bank won't give you a loan, but the credit card companies will, that's because they're about to own *you*, and they know it.
posted by talldean at 9:33 AM on September 3, 2012


Every time you get a raise at work, or move to a new job with better pay, take half of the difference after tax and put it into long-term savings, whether long term is two years or fifty, and where savings is anything that makes you money instead of burning it.

A bank account, an IRA invested in SPY, starting a business, a second house that you rent out, all are savings.

That said, if you're in debt, compare the expected rate of return of the investment you'd like with with the interest rate on your debt; take the most money first. Or, if you have credit cards at 18% interest running a balance, it doesn't make sense to invest in anything else besides paying off that debt.
posted by talldean at 9:33 AM on September 3, 2012


For the "half the difference after tax" idea above, I missed a bit.

Since you just got a raise, you're always living on more money than you were used to living on; you're not ever tightening your belt to save more. But if you start this in your 20's, after a few years you're able to save a significant portion of your pay without ever having to tighten your belt.

It's a psychological hack to make saving much, much, much easier, and ten years into this, I believe it's the reason I'll get to retire instead of work until I die, and maybe get to retire early if I took the right bets at the right time.
posted by talldean at 9:36 AM on September 3, 2012


There is some really, really great stuff in here, everyone. Thanks. I've been running around a bit and haven't had much of a chance to check in on this thread, but I'll be going through this and incorporating a lot of your suggestions.

For the hell of it, I figured I'd add what I had on my list. Maybe some of this has been covered above, maybe not!

-I will spend less than I earn - self-explanatory.

-I will keep a month's worth of paychecks in my checking account as a buffer and use that to pay bills as they come in - this one is kinda tricky; I get paid a set weekly salary. Additionally, depending on my sales for the month, I get a bonus check that can vary greatly. To calculate this, I settled on the amount of four weekly checks, rounded up to the nearest hundred dollars. The way I figure, my salary is set and doesn't change; my bonus checks can be as little as another paycheck, or as much as another month's worth of checks. My salary more than covers my bills right now, so I'll work with that. I just started doing this, so there's a ways to go before I hit this number.

-I will keep at least three months' worth of expenses in my emergency fund - I actually want to up this to six months' worth. Right now, I've got close to four. This includes all my monthly bills, anything I'm subscribed to (and could cut out if I needed to), and any non-monthly recurring expenses (contact lenses, regular car maintenance, etc.) divided up into a monthly amount. Actually, this is one of my rules too.

-I will not pay a cent of interest on any of my credit cards - you'd think this would be self-explanatory, and looking back it is, but God, did I struggle with this for so long.
posted by andrewcilento at 12:54 PM on September 3, 2012


Don't forget this one: invest in experience, not in things. Unclutter your life.

Spend your money on going places and doing things, not on acquiring even more stuff to clutter your home, garage, and driveway. If you do buy something and then stop using it after an initial burst -- books, DVDs, games, gadgets, and clothes are typically in this dust-gathering category -- sell it or give it away or put it on long-term "loan" (with no real expectation of getting it back) to someone who will absorb your clutter until they in turn give it away.

As a result, you will have more money in the bank, more space at home (or lower housing costs because you don't need an oversize home full of stuff), and a much less cluttered life, and the people you give things to will think you're doing them a great favor, so you'll strengthen your friendships by giving away things that really mean nothing to you.
posted by pracowity at 4:29 AM on September 4, 2012 [2 favorites]


Well, if we're just talking basic rules...

1. Have a plan for every dollar you earn. Even the bonuses.
2. Allocate your money to it's most productive use. If you have expensive credit card debt, saving for retirement is an inferior investment. If you can save for retirement tax advantaged, paying down a cheap car loan is an inferior investment.
3. Schedule a small bit of time each month to review your finances. As you get better at it, give every month a "theme" where you focus on improving a small aspect of it. The more mundane recurring crap you can automate, the more you can focus on the month's theme. Hence the payroll deductions and auto bill pays.
posted by pwnguin at 9:36 PM on September 6, 2012


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