Are You Good With Money?

One of the major differences between US and Europe is that the standard in the US is to use credit cards, while Europeans mostly use debit cards.

With credit cards, you spend money you might not have, but promise to pay off sometime in the future. With debit cards, you can only spend money that you have right now, and when you spend it is is gone from your account immediately.

With debit cards, you are forced to keep an eye on what you do and it is hard to overdraw. It also drives home the psychological lesson that you can only spend what you have. With credit cards, it is dead easy to lose sight of what you already spent and go in the hole for thousands before you hit a limit. It also delivers the message that it is not a problem to spend money you don't have.

Personally I think credit cards should only be issued to solvent people. Because if you already have no money to live off, spending money you don't have will only make it worse. And of course once you have credit debt, the credit suppliers charge hefty fines in order to keep you in the hole as long as possible to squeeze every last cent from you.

What's shocking IMO is that guys my age are in massive debt (forget about student loans) because they go to Uni, don't work and spend and spend and spend. Some of my friends who I would say were pretty level headed were coming home for the summer with maxed out £2500 overdrafts etc etc etc.

What's that about. I do not know a single person in uni who works at the weekend or does a couple of evening shifts or something. It's ridiculous.

The banks, and society, are saying to students in this country it's ok to spend money you don't have. They should be giving them tiny overdrafts, not several thousand pounds worth.

Some of you have let me know that they cannot open the budget spread sheet I posted.

It was made in Excel 2007. I have saved it in the 97-2003 format. Here is that version.

For the last year, we have paid cash for everything. If I don't have the cash, I save till I get it. It's called deferment of gratification. You have to get gratification from saving up for stuff like you did when you were a kid and had a paper route (boy did I just date myself).

But it is true. We start budgets for things we don't even want or need yet, and then contribute monthly to it. Then we have the money when we need it.

For this to work, you have to turn off the lust of your eye. When you see something or hear about what someone else has that is making their life so great - the lust starts, then the I gotta have it, then the poor prioritization starts, then the justification - then you own it! Now you can't pay the bills you need to and you probably dont' even like the think you spent money on.

Dave Ramsey helps you break this cycle.

David

I think I'm good with money, but that's only because i recognize the value of MORE strops and brushes and creams and soaps... I can be the best budgeter EVER if I have something to save for... However, if I don't have a goal to save for, I spend whenever on whatever.

However, Anyone who DOESN'T recognize the value of my shaving AD's thinks I'm TERRIBLE with money :P

I'm good at saving when there's something to save for, so as long as I set a goal, I'm safe.

Quote:

---

Originally Posted by JimR

However, something happened to me to change everything: I married a woman with a head for numbers. My wife has an associate's degree in bookkeeping, and has done semi-pro accounting work for years. She didn't have any savings when we got married, as she had spent all of hers on her family, but watching her with money is like watching magic.

IN THREE YEARS, we have paid off all of my debt, almost paid off a car, and put more money in the bank than my parents ever had (my parents are probably the source of my spending habits...)

Now, we do both work, and there are no kids in the picture, but the vast majority of our spending power comes from the simple fact that my wife 1.) knows how to budget, 2) KEEPS to the budget and 3) values savings more than credit.

That's it. We don't buy on credit. We have a credit card, sure, but we ALWAYS pay it off, every month.

.

---

Same here! When my wife and I were in college I kept our finances and just about ruined us! At one point we were over $1000 overdrawn on our checking account:banghead: !

Then my wife took over (enter sound of heavenly angels singing) and has done the same thing in our finances. We paid off all cards and cut them up and now only use cash/debit cards. We still have a huge school loan debt and a recently modest house loan ($78K) but have begun to rebuild our savings that was depleted in the purchase of our house a year ago.

At some point many people end up realizing that they don't own a bunch of stuff that they wanted, but they sure did get a whole lot of stuff that they wanted.

To eventually realize that ..... the 'stuff' owns them.

I am a librarian and the father of 5 children. What is this "money" of which you speak?

~Rich

+1 to all the posts about Dave Ramsey.

I am in baby step 2 of his program. It makes a lot of sense to me.

If your outgo
exceeds your income,
then your upkeep
will be your downfall. :)

I never used to be untill I gave myself an allowance....now I'm a pretty good saver.

Although I have WAY too many raw materials lying around for hobbying. And have spent quite a lot of money on that.