How Do You Manage Your Money?

[Wild Weasel]

I know this can be a touchy topic, so by all means just ignore it if you don't feel like sharing.

I'm just really curious. The economy is tanking and I keep hearing about how everyone is buried in debt and with available credit drying up, how everyone is now going to starve to death.

I am by no means wealthy, but my wife and I make enough money to get by and to treat ourselves with something nice every now and then.

We save up for things that we want, and then we buy them. We worked out our budget before buying a home so we knew we'd be able to make our payments. Other than our mortgage and car loan, we don't carry any debts. I'm not sure whether that makes us responsible, or just incredibly lucky.

It just seems like a reasonable way to live.

With that said, I don't really understand how people end up buried in debt beyond ending up in a bind due to losing a job or something.

So what I'm wondering is how many of you have big consumer debts and how you ended up in that position. Do you tend to spend more money than you make? If so, why do you do it? Are you at risk of starving if you don't? Do you buy things on credit just so you don't have to wait? Do you ever calculate the interest costs before doing so or do you just look at the monthly payments to decide whether or not you can afford something?

Do you live paycheque to paycheque with nothing at all left over?

Maybe this should be a poll.

I'm just really curious as to what the general mentality is when it comes to spending money.

Anyone care to comment?

[mdass52]

This is a very touchy topic. However, I was in the situation where I spent moren then I made, was young and stupid (late teens). Got my first car, wanted to put the big stereo, rims, etc. I was working part-time and got my first credit card. Filled it in no time. Then found myself with a car I couldn't pay for monthly because I was paying credit cards. I ended up getting a second job paid off my debt and I think i've learned my lesson. Well I got my 3 about 4 months ago, I've already racked up about $2000 in aftermarket goodies, but it's well within my range to payback. Im 25 now, looking at purchasing my first property in a couple of years, so Im spending wisely and saving for rainy days which happens to be today, lol.

[Xerox]

II'm not sure whether that makes us responsible, or just incredibly lucky.

It just seems like a reasonable way to live.



Luck is when you win the lottery =). What you're doing (budgeting) is common sense, IMO.

I think your question is directed more towards the locals here but surely it's somewhat triggered by the current state of the American economoy (which impacts us and others). So in regards to the American's, maybe they were just trying to live the "American dream" and trying to keep up with the Jones' next door.

[kevcol74]

Sometimes life throws you curveballs, and you end up in a position you never thought you'd get into.
I for one am at a high stress level with money. Partly due to curveballs, and partly my own mistakes. I'm "highly levered" at this point with student loans still dragging on me, personal consolidation loan from living beyond my means at one time, and basic bills/mortgage. My spouse was let go from here job recently (curveball), and now the brunt of everything is on my shoulders. We have a little one on the way (planned/curveball in one) that will put more pressure on the situation. With both of us working, even with my debt, we were fine, much like your position. But my past has now caught up with me in this situation. 3 years from now I was looking to be debt free aside from my mortgage, but now thats looking harder and harder. The lovely stang you see in my Avatar is merely an investment to help lower my debt. (I so want to keep it, but I also want my kids to not have to pay for college/university like I did, its a hard way to start in the real world with $50,000 debt right off)
As you can see, its not like people plan it, sometimes it just happens.
To put things into prespective, I'm giving up hockey for a while thanks to finances as well, I'm putting my boy in (he's 5) and thats my budget gone.
Trust me, it sucks playing catch up, so for those out there in college or just out, stay away from debt! Don't buy what you can't pay off when the bill comes!

[Cardinal Fang]

The biggest debt my wife and I own is the house and a small line of credit we used for house renovations. We both have two reasonably well paying jobs and as a result we have the luxury of using one salary to pay for monthly bills/living expenses while the other we bank and use to pay off the line of credit. We are very agressive with our mortgage and use bi-weekly payments on a variable rate.

At the end of the year what we have saved up in the one salary goes to pay for my RRSP's (my wife has a pension). Anything left over gets dumped into the mortgage as a lump sum against the principal.

In a nutshell we don't spend money we don't have. We always keep a balance of one months of expenses in our savings in case something should happen. When we went and applied for a mortgage we knew the amount we wanted. We were stunned when the bank told us we qualified for twice that. The guy at RBC told us that we should be looking for a bigger house then the one we had settled on. He was full of shit and is symptomatic of what's wrong. Just because someone tells you that you qualify for that much doesn't mean you should take it. They are only looking out for their best interests...not yours.

The sad thing is that there are many people like myself (fiscally conservative) that played by the rules, didn't fall for the "take all the money you want" tactic, have impeccable credit ratings and are now made to pay for the mistakes of farking idiots that were lending money to people who didn't have two brain cells to rub together. People should check their RRSPs. Mine held no mortgage securities whatsoever. But it did hold some percentage in stock. The meltdown yesterday saw ALL STOCKS die and I'm sure that's reflected in my RRSPs.

I'm a big proponent of personal responsibility. There is a lot of that lacking today. It's everyone else's fault but mine is what people love to say. I'm sorry but that doesn't cut it for me. Not everyone can own a house or SHOULD own a house for that matter. And that goes for any BIG TICKET item. People should really look long and hard and determine what is truly and NEED vs a WANT. Our parents were so much better with our money than we are.

[Jeff-TheBiz]

I still have some "stupid" debt left over from my previous relationship.

But aside from that, credit cards are paid off every month, 10% of 'take home' is put into RRSP & Long Term spending, and 10% in savings.

Seems to be working for us so far...

[ziegs2020]

Rubber bands.

[Go_Habs_Go]

People should really look long and hard and determine what is truly and NEED vs a WANT. Our parents were so much better with our money than we are.

This is so true. The difference is that today, everyone is expected to have everything and have it now. Why wait and save and learn the concept of 'patience and reward' when you can have it RIGHT NOW? Just put it on your credit card and worry about it later. Live life now!!! Buy, buy, buy!!

In our parents time there was less of that pressure. Today the advertisement and social expectations are so aggressive and pervasive that people can easily get lost into chasing a lifestyle that is beyond their means. Everything needs to be replaced more often because we need to keep up with the times. Your TV is ONLY a 40 inch LCD??? LOSER! You need to buy the HDTV 75inch PLASMA now!!! LOL!! Never mind the fact that your 40 inch TV is still in perfect working order, you gotta get the newest and the latest.

Sad part is, it's not that hard to avoid that pressure. Who cares what other people think of your clothes, your car, your house, your TV, your sound system, etc. The important thing is you buy only what you need and save a good chunk of your salary for rainy days and for retirement.

I think we need to return to the concept of planting a seed and watching it grow! Unlike today's concept of put the seed in the microwave and nuke it for 30 seconds and if it doesn't grow, throw it out and just buy another seed. Any maybe another microwave while you're at it. Your old one is almost 2 years old! FOR SHAME!! :)

Now excuse me while I go shop for a HDTV 75inch Plasma. I have a sudden unexplainable urge to replace my existing TV.

[Cardinal Fang]

*Sighs*

Go Habs Go and I sound like our parents.

*Runs screaming...*

[bhrm]

As the typical teen, didn't really listen to parents. Spent money on stupid things. I've worked continously since I was 16 and spent money on little things like CDs, bought a computer, more CDs, imported CDs, then when I got into photography that was bad news too.

The biggest hurt for me was when i had a little photography/design company with friends, we didn't really have good accounting practices done or in place and since I did most of the work, I also incurred most of the expenses like big cell phone bills, tons of gas driving to locations, supplies, and not seperating personal and company very well.

The only reason how I got a car was from the first few years I worked i transferred a huge bulk of money over to my mom and I totally forgot about it. Out of sight, out of mind. I put some into stocks, had a few moments of luck and just left it until i finished school.

Now I'm going with very basic needs, have a bank account that's out of sight out of mind with higher interest, and avoiding eating out, excessive driving, photography stuff.

I wish I could go back in time and slap myself in the head. If I saved every dime up until now, I could have a down payment on a house already.

[Wild Weasel]

Well I got my 3 about 4 months ago, I've already racked up about $2000 in aftermarket goodies, but it's well within my range to payback.

So this newest $2k is also on credit? Do you know what interest rate you're paying on it?

Don't answer this if you don't feel like it, but I wonder why you went and bought that stuff before saving up. Do you get satisfaction from saving up for something and then getting it, or does it only matter that you get the thing? I don't mean that at all in a critical way. I'm just trying to understand why people do this.


Sometimes life throws you curveballs, and you end up in a position you never thought you'd get into.

See... your situation I understand. That's why I specifically tried to exclude this sort of thing in my original post. When you've got a certain lifestyle and then things drastically change like your income level drops or you get some new major (non-discretionary) expenses, I can understand taking on debt while trying to bring your income back to where it was, and I can totally see how this could get out of control.


When we went and applied for a mortgage we knew the amount we wanted. We were stunned when the bank told us we qualified for twice that. The guy at RBC told us that we should be looking for a bigger house then the one we had settled on. He was full of shit and is symptomatic of what's wrong. Just because someone tells you that you qualify for that much doesn't mean you should take it. They are only looking out for their best interests...not yours.


This is an extremely important point. Someone I know is just considering looking for a house, and mentioned going in to find out what they'd be approved for. I gave a stern warning about this being absolutely the worst way to approach it. You have to work out a budget and decide what you can comfortably afford in the way of a monthly payment. THEN you go in and seek approval for the appropriate mortgage amount. You WILL be shocked at how much more than that they will offer you, and you MUST decline the extra amount rather than seeing it as a green light to get a bigger house. If they don't offer much more than you planned, then you might want to take a good hard look at your budget to find out where you've miscalculated.

I wonder if this is where a lot of people go wrong. I believe this is where the term "house-poor" comes from. If you find out a couple months after buying a place that you can't get by on what's left after your payments, it can be very costly to try and get out and into a more affordable place. I can see how this can cause people to struggle to keep it, and end up with a huge consumer debt in the form of credit cards or a line of credit.


This is so true. The difference is that today, everyone is expected to have everything and have it now. Why wait and save and learn the concept of 'patience and reward' when you can have it RIGHT NOW? Just put it on your credit card and worry about it later. Live life now!!! Buy, buy, buy!!

You know... I think I'm secretly hoping someone might post up just to say that this is exactly how they are and why they're in debt. I mean, I expect these people are out there, and think it's a ridiculous way to live, but I'm betting it's far more prevalant than I'd hope.

I wonder though, whether the people who live like this really understand how much they're paying for stuff. I mean, if you realize that you're paying 4 grand for that $2000 TV... do you still take it on credit? Do you just not care? How does this mindset work?

[Wild Weasel]

I wish I could go back in time and slap myself in the head. If I saved every dime up until now, I could have a down payment on a house already.

Pissing away money and ending up with very little is worlds apart though from going into debt and ending up in the hole.

I'm sure we all could have done a better job of saving over the years, but if you have some extra money, sometimes it's ok to live for the moment. It sounds like you've got all your ducks in a row by putting money away now into savings so you can move forward.

[kevcol74]

Alot of good points coming out here, especially when discussing the housing market. What you "qualify" for isn't necessarily what you can afford!

Also, watching your interest rates on balances carried too. For example, how many have financed their cars? And at what rate over what time period? A good eample is my 2006 Escape, 0.5% over 60 months... I have other debts I'll concentrate on paying off first, as this loan costs me very little to carry. Student Loans, they give you a tax break on interest, so consolidating them is a bad move, unless the savings over the life of the consolidation loan outweights the tax savings. Lots to consider with these. But if you get in deep, you need to get a plan. Pay off those high interest loans first.
It can be very frustrating at times too, when you just feel like you can't get out of the hole. But it takes time, so patience is the key. You are not going to get yourself out nearly as fast as you went in!!! And if you have to, play the shifting game! Keep shifting your debt around to the lower interest accounts when possible!

Oh, and Go Habs Go (nice name btw!), Plasma is so out dude! OLED is the way now!!! (Sony)

[06Touring3]

I have an RRSP i've had since I was 17 and a % of my pay goes into a share ownership plan setup through my work. I tend to run low on cash between paychecks after paying for my house and car but i don't feel bad about it since all my bills get paid early every month, i'm saving in 2 different places, and I'm never in the red.

My credit cards however. I have 2 and I didn't use them EVER for well over a year (got my first when I was 21). Then I lost my mind and got spend happy so I'm paying off one now and the other has a couple charges on them and will be paid off very soon. If i were to do it again I would still use my credit card (1 not 2) but only for 1 purchase a month. I however am not panicking becuase carrying a balance isn't nevessarily a bad thing as long as you consistantly pay MORE than your minimum payment. Which I do, I make 2 payments a month on each card.

[Wild Weasel]

Note that using a credit card is not necessarily bad, but carrying a balance on one IS BAD.

Credit cards are one of the most expensive credit options available. If you're in a position where you NEED to carry a balance for something, you should look into whether you can get a line of credit with a reasonable interest rate. This should be used for things that you have to buy, don't have the money for, and can't put off until you save enough. Something like home or car repair would qualify here. Something like a new TV would not.

Credit cards should be used for convenience, NOT for carrying a balance. By all means, use them for all your gas, grocery, and other purchases, but pay it off IN FULL at the end of the month. If you're using it for regular purchases, and can't pay it off when the bill comes in, then you're spending too much money and need to work out a better budget.

If you're carrying a balance to buy discretionary stuff like car mods or electronics, take the time to work out the actual cost of what you're buying once you incorporate the interest. If you're not so good with the math, get someone to help you. It may really open your eyes up to how much you're paying for things.

By saving first and then spending, you can actually end up getting more of the stuff you want but don't necessarily need!

[Go_Habs_Go]

*Sighs*

Go Habs Go and I sound like our parents.

*Runs screaming...*

ahahaha yeah it doesn't take long to start becoming our parents. Hopefully we get most of the good traits and not too many of the bad ones :)

[condor888000]

I just never buy something I don't have the cash for. I live check to check but that's mostly because I put as much of my pay as possible in savings for big purchases. I prefer it that way, make a little bit in interest on it and when I find something I'd really like I have the money to buy it. My credit card gets paid off first thing every two weeks, then 75% of what is left goes into my savings.

Goal is a small townhouse in 5 years. Between some inheritance and my savings it should be doable...just have to get a good job when I graduate.

[dentinger]

$50 every paycheck gets put away into savings, and i try to put any extra cash into my savings as well.
i pay off just about everything on debit, so i dont have to worry about my mastercard bills. i dont think my bill has ever exceeded $100.

[06Touring3]

Note that using a credit card is not necessarily bad, but carrying a balance on one IS BAD.

Credit cards are one of the most expensive credit options available. If you're in a position where you NEED to carry a balance for something, you should look into whether you can get a line of credit with a reasonable interest rate. This should be used for things that you have to buy, don't have the money for, and can't put off until you save enough. Something like home or car repair would qualify here. Something like a new TV would not.

Credit cards should be used for convenience, NOT for carrying a balance. By all means, use them for all your gas, grocery, and other purchases, but pay it off IN FULL at the end of the month. If you're using it for regular purchases, and can't pay it off when the bill comes in, then you're spending too much money and need to work out a better budget.

If you're carrying a balance to buy discretionary stuff like car mods or electronics, take the time to work out the actual cost of what you're buying once you incorporate the interest. If you're not so good with the math, get someone to help you. It may really open your eyes up to how much you're paying for things.

By saving first and then spending, you can actually end up getting more of the stuff you want but don't necessarily need!

That is all sound advice and he's right everyone SHOULD use their credit card as such!!!

But...if you have a balance and can't pay it off in full it's not a big deal AS LONG as you are paying MORE than your min payment...in which case you are paying down your balanace and not interest alone. But keeping a balance and paying it down gradually is not bad and does not affect your credit rating in a negative way which is what's most important when using/paying-down a credit card or LOC aside from, of course, not maxing it out or using it for garbage

I made that mistake and thankfully it wasn't any major sum of $...but I have 2 friends that have both filed for bankruptcy before the age of 22 because they did not understand interest and overdraft

[mdass52]

yep bankruptcy is becoming more frequent here in Canada. The $2k I racked up is already taken care of. I purchase on my canadian tire mastercard to get Canadian Tire money and a few pennies off gas. lol

[silvermist99]

to be honest I am not even too sure how I manage my money. When I see things that I feel like buying I just buy it.

I am a averagery paid F/T professional and still lives with parents, I save about 60-65% of my net monthly income on investment. 70% of my saving is mortgage for my own place, 20% sinking stocks and about 10% in company retirement funds. After all these I usually still have over a grand to blow each month for food, gas, shopping, going out, friends, women. Sometimes my work hrs are ridiculous and the only thing I do is go to work then go home and sleep. On those days my spending are close to $0... just 60km of gas.

I buy random things quite often that I 'want' definately not need. Such as ipod touch last week, an portable hard drive enclosure this week, an intake three weeks ago. Also kind of big on travelling, at least 2 trips on plane a year now. But being the young one in family I always get sponsered from grandparents/relatives.

Somehow after all my spending, I still manage to make my bank account $ grow every month even with more then half my take home paycheque invested and debt always remain 0. I never paid interest rate to credit cards before even with my spending and investment habits.

If the economy goes to shiet and I loose my job and everything I don't think its that big of a deal for me. My own property closes next year and I can rent that out and continue staying with parents to ride it out. I started out 2 years ago with $1000 in my bank out of school and built all this wealth today. If I loose my job it won't be the end of the world, I'll start over again just like how I did 2 years ago. If worst comes to worst things doesn't work out in TO, I have 4 countries citizenship and can always live elsewhere to work.

Anyways very good point you made here, I really should try harder to save and stop blowing money on those things I want not need.
I think right now I am still blowing money on 'wants' because I am comfortable with my job security and savings... however things can change soon, this year's been crazy.

[Flagrum_3]

I'm not friggen loaded but I've done quite well considering alot of curve balls thrown my way.Alot of what your saying Weasel is the way I was taught growing up....Don't buy something unless you already have the money was the strongest point I think, of course some purchases are exempt from that, like a house, maybe even a car is fine aslong as you know you can pay it down quickly...this also helps your credit.Always pay yourself was another one, like $50 a week for example; you'd be amazed what you have at the end of the year.Take advantage of RRSPs, I started at 24, a little late but what the heck and managed to max-out my contribution for 12 years straight; one of the best investment methods, especially at tax time :) One other thing I did and am very proud of is started a Canadian Scholarship fund for my daughter when she was born, I now have enough built up to put her thru atleast 4 years at U of T! :)

Best thing I can say is don't get caught up in the Rat Race everything will come in its own time.


_3

[x_o_k_x]

Well I started RRSP when I was 17.. I have High Interest Savings account for big stuff, like mods or vacations. I also have credit card to keep that credit history clean. So yeah as long as you dont spen more then you get paid, you become rich lol:chuckle

[Jeff-TheBiz]

I now have enough built up to put her thru atleast 4 years at U of T! :)


At todays rates..

By the time she is old enough to go to University your savings will cover a book.... maybe 2.

[DingBat]

If you do nothing else in Canada, you MUST take advantage of RRSP's. It's an incredible advantage that many others in the world would kill for.

My wife and I have been maxing our contributions for well over 10 years now. It's amazing how fast your retirement savings grow when you do that.

Your biggest debt is obviously your mortgage. We went weekly, and payed the maximum additional allowed. We payed off our first house in 10 years and saved tens of thousands in interest. Paying off a mortgage is an incredible feeling, btw. We've just bought a new house and we're taking the same tactic.

I won't kid you, it can hurt. There are times when you find yourself with $20 left with 2 days until pay day, where pizza and a movie is a big night out, but it 's all worth it. We're paper millionaires now and feeling like we're going to be ok, no matter what.

[Unoriginalusername]

within our means

[TRICK]

At todays rates..

By the time she is old enough to go to University your savings will cover a book.... maybe 2.

And God forbid she goes into Commerce....tuition fees double 2nd year!

[Flagrum_3]

At todays rates..

By the time she is old enough to go to University your savings will cover a book.... maybe 2.

Actually, She'll be 17 in 6 months, not too far away! And I've checked recent tuitions for several routes she might choose and I'm still doing okay.........mind you it won't cover any book costs or anything else, just tuition.


_3

[Wild Weasel]

But...if you have a balance and can't pay it off in full it's not a big deal AS LONG as you are paying MORE than your min payment...in which case you are paying down your balanace and not interest alone. But keeping a balance and paying it down gradually is not bad and does not affect your credit rating in a negative way which is what's most important when using/paying-down a credit card or LOC aside from, of course, not maxing it out or using it for garbage


This is what the credit card companies would like you to believe but, as I mentioned earlier, credit cards are one of the most expensive forms of credit available. I think the only thing worse might be those payday loan places, and if someone is going to those then they're either in serious trouble, or REALLY have no clue how interest works.

You're right in that this is not bad for your credit rating, but it's bad in that things will end up costing you much more than you might expect. The more gradual your payment plan is, the more you pay and it can really add up.

[06Touring3]

This is what the credit card companies would like you to believe but, as I mentioned earlier, credit cards are one of the most expensive forms of credit available. I think the only thing worse might be those payday loan places, and if someone is going to those then they're either in serious trouble, or REALLY have no clue how interest works.

You're right in that this is not bad for your credit rating, but it's bad in that things will end up costing you much more than you might expect. The more gradual your payment plan is, the more you pay and it can really add up.

Oh absoulutely agree, which is why i'm making it a habit to pay down as much as possible everytime I'm paid so the overage is at least less than paying just the min payment. But it's still shitty no doubt lol

[JMAK74]

Well it seems based on the posts that TM3 members manage their money well or at the least are trying to.

Here's my $0.02 (Sorry if I haven't referenced your thoughts and a note - like others here, I too have had money management issues and have learnt - it ain't easy when you get yourself in over your head)

1) Think of your purchases/spending in terms of how much money you have available to you after taxes and/or how much before tax you'd have to make to make the purchase - Your gross salary is $50,000 - assuming for easy math 30% tax rate that means you have $35,000 available throughout the year for your expenses - that means that $2,000 TV doesn't represent 4%, it's 5% of your money or if you're thinking about that PS3 game for $50 - it's going to mean you have to make $71.43 to buy it (before sales taxes). Start applying that to when you're making purchases and you'll find yourself double checking about those "It's only $20 purchases"
2) Credit Cards are cash - that being said - so long as you can pay the balance off in full when you get the statement - they allow for 'time value of money' - you get goods into your possession immediately, and don't have to pay for it in say 30 days - which you can make interest/negate bank charges with. Again, I stress for that to work you have to pay the balance in full when the statement comes in
3) Make a budget and stick to it - it's not easy and I'm the first one to admit, I've have not followed my budget
4) Tight on cash? - pay everything in cash as in dollar bills and coin - that means do not use debit cards either - studies have shown that consumers will 'spend more' with credit cards, debit cards and gift cards as the activity of purchasing has changed - you don't see money leaving your hands - your just swiping a card and it gets very easy to say "It's only $50" - hence you more easily spend - and merchants and credit card companies are very well aware of this - have you noticed that almost every store chain has a 'gift card/convenience card' now - that's because you are more likely to spend more.
5) Buy on Deal - in other words - buy what you need, whether it's food, TV, etc when they're on sale (so long as you can - obviously fresh fruit and veg isn't as easy for instance) - check flyers, etc and shop accordingly - my father did that and he told me it worked out to around $600/year for groceries/household goods in savings by buying when something is on sale and it wasn't 'cheap' stuff either - we ate well and stocking up a bit based on the demand in the house - going back to point #1 - that $600 equals $857 before tax income. That saving can go into investments, a trip, etc.
6) Track you expenses - this will give you an idea of how much you're spending and where you can save money by changing shopping patterns, changing vendors, etc.
7) Tied to #5 - watch were you shop - my wife and I where shopping a lot at Superstore and I noticed that the grocery bill was getting a bit high to my liking - we changed to No Frills and overall - we're spending less but eating just as much and just as well
8) Remember credit cards (from my understanding) base interest charged on the average balance carried within a given period vs in a line of credit that charge interest based on the amount owing - that's were having a line of credit (which is to only be used for emergencies and major purchases like a home renovation, borrow to max out RRSP contributions) can help. To put in perspective:
Assume a $500 charge on a credit card and a line of credit on day one - assume both have 18% interest/year for comparison sake (remember though a line of credit typically have lower rates) - you pay half before the billing date in the given period (say one month):
Credit card - $250 balance + $5.63 interest = $255.63 owing
Line of Credit - $250 balance + $3.75 interest = $253.75 owing
Sure it's only a difference of $1.88 - but increase the amounts and see #1 and you will realize that you're paying a lot for a little.
9) When paying your credit cards - read the statement through and reconcile the purchases - it's easy to forget that $200 DVD set you bought at the beginning of the month and when you see it again - you may have a revelation as to your spending habits.
10) When buying certain goods and depending on your comfort level - when they offer insurance/warranty extension - a rule of thumb I have heard is if the cost of the insurance/warranty extension is greater than 10% of the purchase price - don't bother - when I bought an external hard drive for $150, they asked if I wanted warranty coverage for $30 - 20% increase in cost, for something that the most important part is the data, which can't be replaced if lost? No. The balance to this is if something is on sale and you were planning to buy it regardless and that the warranty extension/insurance will match the regular price, then depending on the value it is IMHO okay to do (which I did for my 40D and 37" Sharp Aqueous).

Anyhow - I should get back to work.

JMAK

[Cardinal Fang]

All great points JMAK. I wish more people thought through finances much the same way you do.

I used to think that what others did to their finances was of no concern to me because I wasn't abusing the system. After the market meltdown in the U.S. I now realize that everyone is affected. We will now all have to pay more to borrow money from the banks now that credit is tight. Even if your credit ratings is steller the banks will not take any more chances.

[dsichewski]

Well I have to say great advice from the above posters.

I have been working since the age of 16...I worked alot as a highschool student, would work weekends galore, extra shifts, worked 2 jobs my whole last yr of highschooland worked more often then i should have...one thing i do regret now is not spending as much time with my friends at partys and such, social life does take a beating....but from when i first started i split my paycheque into 3rds. one for me, one for my rents and one for school......By the time i was starting college for 1.5 yrs I paid my approx $15000.00 tuition bill in full and had my own car, also had money to buy food and do things while was at college and not working. I must say rents did pay for housing...but that was there way of helping...
Now that I'm out of college and have been working I split my paycheque up i have monthly withdrawls for a savings account, rent(which will be used toward downpayment on a house) I'm still living at home but I do pitch in and help with things and buy things...another savings account and also extra rrsp withdrawls biweekly. as well as a few bills. phone, insurance etc.
It took me a long time to finally get a credit card....I was a strong believer of not using a credit card for plain fear of going into debt...and liked only using my debit card so i knew if i used my debit card i had the money...Right now I only have once credit card which i use to put large items on and gas just to get a credit rating going as well as earn points to get free things at ct (sure helps when you want to buy camping gear)
I always pay on time! I feel I have done well with saving money over the yrs and have to thank my parents for it even though I didn't like it when i was younger. lol but I see now where it helps. I plan and save for anything big i want...small thing not so much as thats usually a go out for lunch or co camping for the weekend kinda thing.

I'm trying to prepare myself as best i can with financials now so when I do move out to a house or w/e I'll have a backing to fall on incase stuff comes up which i know it will.

[zedtech]

Great points in this thread :) I'm currently clawing my way out of debt. I came across a site called Zen Habits a few months ago and it offers some great tips, some of which have been touched upon here already.

http://zenhabits.net/2007/12/the-10-key-actions-that-finally-got-me-out-of-debt-or-why-living-frugally-is-only-part-of-the-solution/

http://zenhabits.net/2007/02/how-to-stop-living-paycheck-to-paycheck/

[TheProfessor]

I'm pretty fortunate in that my wife is a banker and she takes care of all our finances. I haven't paid a bill for at least the last eight years!

Having said that, we just use common sense. We each earn a reasonable salary and buy stuff when we want it, but the catch is we are both quite responsible. We manage to live in a nice condo in a nice area of the city, two reasonably nice cars, RRSP's (though they have taken a beating the last few weeks), etc. Our only 'vice' is that we both love to travel and take at least two trips per month (going to Paris in 10 days - woohoo!). When we get raises or bonuses, we pocket/invest the money as we're living comfortably now and don't need to 'waste' it on anything else.

In the end it's just about control and common sense, plain and simple.

[Wild Weasel]

When we get raises or bonuses, we pocket/invest the money as we're living comfortably now and don't need to 'waste' it on anything else.


I'm thinking more and more that this is an extremely enviable position to be in. My own situation is similar, and I count myself lucky for it.

I was perfectly happy with my life a couple years ago. Since then, I've earned a bit of a raise, as has my wife, and we really haven't changed our lifestyle much. We're just a bit less worried now about bills and what not than we used to be.

I suppose this just comes from taking responsibility to not live beyond my means so that when my means improve, things can actually get better for me, rather than just getting a little less worse.

Let's take a bit of a different tact here...

Are there members here who feel they deserve better than what they have right now? Sure, we'd all like to be doing better... but do any of you feel that you're really entitled to more such that you'll try to live a grander lifestyle than you can afford? If so... what's your justification?

Not sure I'll get any takers on that one... but it's sure something I'd find interesting.

[TheProfessor]

I'm thinking more and more that this is an extremely enviable position to be in. My own situation is similar, and I count myself lucky for it.

I was perfectly happy with my life a couple years ago. Since then, I've earned a bit of a raise, as has my wife, and we really haven't changed our lifestyle much. We're just a bit less worried now about bills and what not than we used to be.

I suppose this just comes from taking responsibility to not live beyond my means so that when my means improve, things can actually get better for me, rather than just getting a little less worse.

Let's take a bit of a different tact here...

Are there members here who feel they deserve better than what they have right now? Sure, we'd all like to be doing better... but do any of you feel that you're really entitled to more such that you'll try to live a grander lifestyle than you can afford? If so... what's your justification?

Not sure I'll get any takers on that one... but it's sure something I'd find interesting.


I feel the exact opposite, sometimes I question whether I deserve everything I have. I have an awesome family (in-laws included LOL), everyone in my life is happy and healthy, all have good paying steady jobs, all with university educations, no major debts, etc. Granted we all work hard, but it's a tough pill for me to swallow sometimes when I see some less fortunate people who don't deserve the life they were dealt. They work just as hard, perhaps even harder, yet they live in bad areas, don't own a car, and have trouble making ends meet. I don't think it's because they were spending beyond their means either (at least not every case). I know I'm possibly going off topic here, but what you said just reminded me of how lucky I really am.

[Cardinal Fang]

Are there members here who feel they deserve better than what they have right now?


I'd like to be rolling with Catherine Zeta Jones or Kate Beckensdale just because.


If so... what's your justification?


Over active imagination.

[Go_Habs_Go]

I feel the exact opposite, sometimes I question whether I deserve everything I have.

...

I know I'm possibly going off topic here, but what you said just reminded me of how lucky I really am.


+1 on this comment Mr. Professor. We won the cosmic lottery just to be born/live in Canada. Yes, a lot of people in this country work really hard just to make a living, and sometimes struggle to make ends meet, but at least we are given a chance to make a living. Imagine being born in a 3rd world nation torn apart by war, famine, etc and living through that.

Yes sir, we won the cosmic lottery to be able to live here.

[Zoom Zoom Boy]

All great points JMAK. I wish more people thought through finances much the same way you do.

I used to think that what others did to their finances was of no concern to me because I wasn't abusing the system. After the market meltdown in the U.S. I now realize that everyone is affected. We will now all have to pay more to borrow money from the banks now that credit is tight. Even if your credit ratings is steller the banks will not take any more chances.

True, we're all effected by global markets in one way or the other. However, don't kid yourself Fang that these will be drawn out ramifications. There will not be any serious lasting effects of this US economic meltdown. Maybe a year ot two at most and to be frank, 6 months would surprise me.

The reason is simple. There are two infinite human qualities in this world we live in:

1) Greed
2) Stupidity

Although it will go down in history books with a nice little footnote like every other great economic bubble/crash, the markets will soon forget all about it and start focusing on more ways to make money while capitilizing on the general greed and stupidity of investors. Tis the nature of the beast.

[dkwan416]

I work at a bank, and I deal with hundreds of clients a week. To be honest with you, i'd say that 70% of all people have less than $2000 in the bank (pllleeenttty have less than $1000). and of the 70%, i would say that at least 20% are in enough debt to qualify as financial trouble.

I used to think that money management problems were isolated and few before i started working at a bank. Now i realize that so many people mismanage their money that financial advice is a must.

If you ever need some advice on bank products (and what the catches are.. cause banking is full of fine print), how to set aside money, or where to put your money, don't hesitate to PM me.

On a side note, doctors make filthy amounts of cash. I haven't met many that don't have at least $100,000 in liquid assets (thats cash). Most hold about $150,000 to 200k.

[Candyman]

I've worked in different fields of finance. Mutual Funds, Mortgages, Credit Cards, & now banking. Here are some common pitfalls.

1) Qualifying for a mortgage is based on a % of your gross income. 32% for your mortgage, 40% for total debt monthly. However, this is their guideline, everyone's lifestyle is different. You need to ask yourself what can you reasonable afford every month (this includes property taxes & utilities) Most people don't realize how expensive a house is, such as unforeseen repairs. 107% financing is bad, if you couldn't save the downpayment, you are probably going to struggle paying the mortgage (107% financing is only good for those recent graduates who have a new high paying job & don't want to wait to save for their downpayment, they can afford it & are just impatient)
2) Carrying a balance on a credit card is BAD. Buying $5000 worth & paying $2000 of the balance, you will get charged interest on the whole $5000 til the $2000 payment is made (usually 30-45 days later) so you're paying interest on a purchase you actually had the money to pay for.
3) The mentality of I want this now, I'll pay it off later never works. There will always be something that you need/want every month . So it becomes a vicious cycle that never ends.
4) The "It's a Great Deal, 60% off" is only a deal if you need to buy it. Buying something you didn't need initially is still spending 40% more than you need.
5) Spend/invest money wisely. I have friends who are :well off, some are struggling, & some have next to nothing. Yet they are all in the same salary range. Spending $20K to renovate a townhouse in Malvern may not be the best investment. If the average value is $250K, spending $20-50K may not reap the return of your investment. Or buying the latest cell phone/handbag are money pits.

Having said all that, you do still need to live a little bit. Just make sure it's within your means. Otherwise that $299 XBOX360 may cost you $800 after all the interest. Not such a great deal.

I'm fortunate, we're a two income family, had one car, one baby & one on the way. Now my mother-in-law & sister-in-law moved in with us from the US. Not having a 2nd car & daycare is a huge savings.

I recently "sold" my Mazda to my sister-in-law & asked my mother-in-law to import a Porsche Cayenne for $57K. My co-workers are still wondering how I can afford it. This one car cost less than what most pay for 2 cars & daycare.

[Wild Weasel]

I used to think that money management problems were isolated and few before i started working at a bank. Now i realize that so many people mismanage their money that financial advice is a must.


Considering how prevalent these issues are, I think that there should be a course in grade 10 or 11 that's mandatory for graduation and teaches financial management for the comman man. Not a prep course for wannabe accountants or anything but, rather, a course that everyone has to take so that at least they don't end up totally blindsided by the world of personal finance when they get out into the real world.

I mean really... where the heck are we supposed to learn about this stuff? Some people get valuable lessons from their parents, but I believe that most don't.

Wouldn't this be far more valuable to a persons life than a single mandatory French credit?

[bhrm]

Wouldn't this be far more valuable to a persons life than a single mandatory French credit?


Not on a saturday night in Montreal! :chuckle

:bana

[bhrm]

Wouldn't this be far more valuable to a persons life than a single mandatory French credit?


Not on a saturday night in Montreal! :chuckle

:bana


If not a course, then a good full day workshop would be awesome. have banks sponsor it and bring in key speakers, good image for them. education for all.

[Go_Habs_Go]

Not on a saturday night in Montreal! :chuckle

:bana


I agree wholeheartedly :chuckle