Thread: Are You Good With Money?

So I've been living in Japan for about 6 years now. When I came, I had nothing except craploads of debt...which I started to increase with my nice new Japanese credit card.

I am, and have been for years, terrible with money. Just aweful--spend it as soon as I get it, and when people gave me access to money I didn't have, I used that too. In college it was ok, my folks helped me out, but then when I got a job and stuff, I was constantly on the borderline--overdrafts and late bills were the norm.

I didn't mind, really. I mean, I was never hungry or anything, and I knew it would get better (it didn't), but looking back now, I think I am lucky I didn't utterly ruin my life.

The thing is, I was not that different from anyone I knew then. A few of my friends were good with money, but most of us were the same. And I don't think it's that rare--I was listening to a podcast of Fresh Air form NPR the other day and it was about how to choose bank accounts based on their low overdraft fees and the possibility to PREVENT overdrafts by cutting you off early. Not financial advice like "save, keep track of your spending, etc." but "Make sure the bank won't let you overdraft, because otherwise you will." So, perfect for me in other words.

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.

And this is NOT at all unusual in Japan. There is a VERY small poor class; there are homeless, sure but let me put this in numbers: By the age of 24, it is not at all unusual for a Japanese person to have saved over $10,000. The average Household savings rate in 2006 was 27%. 27!!! In the US, it was right around 2%.

Why is this? Why don't Americans know how to save?

Can you save? Do you save? I am really curious as to why this might be, in you guys' opinions...

Jim,

I don't know if you know who Dave Ramsey is, but I took his 13 week class called Financial Peace University last year. I followed his plans, and now I am down to only my primary mortgage. His plans work great for anybody at any point in their lives. Obviously, the earlier the better.

Just Google him and you can find his programs.

While I was taking his class, I build these Excel sheets for our group. This is a template with instructions. You will have to do some customizing in the income area, but overall it works well.

I have left all of the names of my expenses on the sheets to give you an idea how to fill out thos worksheets. I deleted my actual budgetary amounts. The tab that says Rodan and Fields is my wife's home based business.

Let me know if you want to use it and if you need any help.

David

Originally Posted by Alembic

Jim,

I don't know if you know who Dave Ramsey is, but I took his 13 week class called Financial Peace University last year. I followed his plans, and now I am down to only my primary mortgage. His plans work great for anybody at any point in their lives. Obviously, the earlier the better.

Just Google him and you can find his programs.

While I was taking his class, I build these Excel sheets for our group. This is a template with instructions. You will have to do some customizing in the income area, but overall it works well.

I have left all of the names of my expenses on the sheets to give you an idea how to fill out thos worksheets. I deleted my actual budgetary amounts. The tab that says Rodan and Fields is my wife's home based business.

Let me know if you want to use it and if you need any help.

David

Thanks for this David. I like to tell myself that I'm better, but I know it's just my wife's influence. If something were to happen, God forbid, who knows where I would end up...

Thanks for the info, and I'll definitely give it a look...

I was doing quite well at saving. I even saved enough to pay for a modest wedding. But now I have a wife and I'm poor. My wife is expensive.

Originally Posted by ndw76

I was doing quite well at saving. I even saved enough to pay for a modest wedding. But now I have a wife and I'm poor. My wife is expensive.

Arent they all, wait until she wants to gift you with children!LOL

Ya, just wait until they grow bigger and get even more expensive, especially the female ones.

Nice post Jim, you too David, and everyone else.

It's pretty much basic common sense and self discipline. I've heard Dave Ramsey, he is good, I got his book and checked it out just for good measure, he and his program are just plain old fashion common sense - live within your means, if you want more then work and earn more - I like it when after someone goes through the details of their situation and he says "Ok, so is what you are saying is that you got a bunch of stuff that you couldn't afford." (Duh!) or when he says "You only have one job? Why?", he has gotten rich from giving basic advise, good for him, I'm sure that he has helped many.

Here in America the problem is 'SALE!SALE!SALE!' "Save 50% this week only ..... blah blah blah." SAVE? SAVE 50%? - you will never get ahead by getting 'Good Deals'.
Plus the ever popular and obsessive American past time of "Keep Up With The Jones's" - 'Well so and so has it so I better get one too.', a terrible mental trap that lures in and enslaves people to debt and creditors.
Regretably a society built too much on greed and covetousness and materialism.
I know people here who remember the days before the dreaded evil 'Credit Card' and back then if you couldn't afford something then you just didn't get it, you wanted something then you work and save and when you save enough then you can get it if you still want to. And saving, many learn, can also be addictive - better than wanting more and more.
Like one old fella put it, that here in America "We buy junk that we don't need with money that we don't have to impress a lot of people many of who we don't even like." - well said.

I have been fairly fortunate, I'm a debt-aphobe, the Lord has and continues to bless me enough to have enough, and enough is plenty, I don't have any debt, I don't have much but I don't have any debt either.

I'm very good with money. Mostly because I'm usually broke enough that I have to be.

I've never had any debt over a couple hundred dollars, and on the very rare occasion I do owe money, I pay it back quickly.

I can easily become very bad with money. Just little things, that quickly add up to a big amount of money spent. But I'm hyper-aware of it, and I do a few things to keep my spending in line.

1. No credit card. Never have, never will.

2. I pay my rent when I get my paycheck, even if it's early. I also go shopping that day. So everything I absolutely need is paid for immediately.

3. I don't wander into shops. Once I'm there, I'm doomed. So I just don't.

I absolutely micro-manage my finances. I have to, to keep myself from over-spending.

But it's simply become habit now. I've had to do it since I was 18, and while there are people who will help me if I get into trouble, I really don't like to use it.

Mostly, I'm in foreign countries by myself. So I have to make sure I am reliable enough to keep myself afloat.

"My other piece of advice, Copperfield, said Mr. Micawber, you know. Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and in short, you are for ever floored. As I am"

Charles Dickens

I would say I'm good with money. I save well, I don't spend money I don't have, I generally don't dip into my savings account. Certainly not for things that provide only short term pleasure.

I hate not having money in the bank to fall back on.

I only have my parents to thank RE my attitude to money. My brother and I are very different people, but our attitude to money is extremely similar.

I would say that this is quite unusual though. Every one who I work with sends their wages into oblivion almost as quickly as they get it. I'm really not sure how they manage to do it to be honest.

I can't remember exactly the details but the case of Japan's saving rate is rather unique. It all started after the WWII when the economy was completely ruined.

And no, I am not good with money... but I try!