Good personal finance article

[winneythepooh7]

Saw this earlier on Yahoo and think it's pretty relevant to what's going on in our economy today!

http://finance.yahoo.com/banking-budgeting/article/105934/10-Reasons-You're-Not-Rich

Thoughts?

[Jersey_Steve]

Some of it I'll agree is true, like the car and overspending. My car is 8 years old and I plan to keep it till it dies. Everyone's all "Why don't you get a new one?" but mine still works. I will agree with the whole status symbol though.

Some of it can't be helped, like starting too late or not doing what you love (while we all would, I believe few of us are). Or if you have too much house. Good luck getting rid of it into something smaller.

The value one can be tricky as well, because you don't want to buy the best quality (too much cost upfront) and the cheapest is bad value (too much cost over time for replace/repair)... so you really have to do your homework on every purchase.

[koolkat1980]

Thanks for this! :) Yesterday I was looking for a pair of $90 cars seat covers. I found a store which has them, the store would be a drive out of the way.

If I didn't have my mortgage....I would just 'up and go' and purchase them. I know that I still owe my dad about $900 and I have $600 worth of MV costs on it's way. :rolleyes:

Anyway...it got me thinking. As of this week I've decided that I need to take a more disiplined approach with my spending and shopping. I've now implemented 'shopping rules' for groceries once a fortnight with a list.

Last week I went every second day without a list! So, now I'm starting to distinguish my needs from wants and the difference between haphazard/impulse buying versus disiplined purchases. I've now made budgeting figures. :eek: I hope this works.

[wordsmith]

Discipline is everything.

You feel entitlement: If you believe you deserve to live a certain lifestyle, have certain things and spend a certain amount before you have earned to live that way, you will have to borrow money. That large chunk of debt will keep you from building wealth.

I think this one is probably the biggest reason that the most people in the 20-ish, 30-ish age bracket struggle financially, not investment diversification or waiting too long to save/invest, etc. "I deserve this, so I'll get it, whether it's in my budget or not," is really just a huge discipline problem.

You don't do what you enjoy: While your job doesn't necessarily need to be your dream job, you need to enjoy it. If you choose a job you don't like just for the money, you'll likely spend all that extra cash trying to relieve the stress of doing work you hate.

Interesting point. I don't disagree. If you genuinely enjoy what you do, I've found you have a less pressing psychological need to "treat yourself" in a big way all the time for "putting up" with it. It's harder to have self-discipline if treating yourself is your only means of release or happiness.

[marya0483]

thanks for this link!

"You buy things you don't use: Take a look around your house, in the closets, basement, attic and garage and see if there are a lot of things you haven't used in the past year. If there are, chances are that all those things you purchased were wasted money that could have been used to increase your net worth. "

simplistic living is a humble living. too much trash covering the world. buy only what you honestly need.

[wordsmith]

A really good rule of thumb, even for seemingly small, inconsequential purchases, is to look at the item, and ask yourself how frequently you're going to be needing/using it, and if it can be done without. A lot of money gets frittered away, a tiny bit at a time, by impulsively buying stuff that gets occasional use, at best.

[vinsanity]

What if you justify the entitlement, house, and car by saying you'd rather enjoy the fruits of your labor now than stashing it away in an investment account? As long as I'm not spending myself into the poor house, I'm ok with that ;):
(Not like I live in a huge house or anything, but my apartment happens to be a new-ish development in a pricey area, so I could theoretically save money downgrading my dwelling if I wanted to)



A really good rule of thumb, even for seemingly small, inconsequential purchases, is to look at the item, and ask yourself how frequently you're going to be needing/using it, and if it can be done without. A lot of money gets frittered away, a tiny bit at a time, by impulsively buying stuff that gets occasional use, at best.

That is a frustratingly true realization :cry:

[yankeeyosh]

I think I am a very frugal person. For instance, I make a trip to Borders only when I have a 30% or 40% off coupon, and I only buy a $14 paperback (before discount). I stopped drinking beer for the most part because a $5 beer and $2 tip seems exorbitant for what I get. I never really go on vacation...the only time I went anywheren in the last couple of years, I stayed with my brother instead of a hotel. I drive a dented, scratched five-year old Hyundai, but I have no real plans to get rid of it right now. I am probably better off than most Americans as a whole (perhaps not where I live, but countrywide, yes), but I don't spend anything for myself.

Now, do I want stuff? Hell, yes. I would love to get rid of my 14 year old TV and actually live on my own instead of with a roommate who just so happens to be my landlord. But the thing is that life is incredibly expensive, and I don't want to be one of those people who slowly but surely goes into debt. For instance, I had an accident a month ago, which was a hit and run. I was stuck with the deductible of $1,000. I might have to get some dental work done soon. And my car has to get the 60,000 mile service in a few months. As much as I save, it may not be enough. Life's financial "surprises" can really creep up on you, and many people have no idea how to be ready for them.