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Escaping the mindset of a poor person, help please.


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33 replies to this topic

#25 Donald LaFell

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Posted 21 January 2013 - 05:02 PM

i would stay frugal!

#26 frash.exe

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Posted 22 January 2013 - 03:00 AM

Vegas

#27 stirs

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Posted 22 January 2013 - 09:05 AM

Delhommey advice was very good.

Don't put "savings" in the bank drawing 1% while still having debt which charges you 10-20% interest. Obviously going in the hole there.

Look at all your debts. Pick one, pay it off. Take the monthly payment you were paying and then apply it to the next one. Knock em off one by one. The poor mindset will be transformed by your success.

Being out of debt is a wonderful feeling. Then, all the debt money is going into your bank account each month. Soon, you can buy things with cash. You have no idea what kind of car deals you can get when you offer cash rather than the bad credit stuff they are used to. You can take advantage of bargains, etc.


Glad you are headed down this path. Not saying you can't spend on some stuff, but the out of debt feeling is pretty good in itself.

#28 Epistaxis

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Posted 22 January 2013 - 01:12 PM

Lots of good advice here.

Something MPF mentioned has been what is giving me pause lately.

I wonder if all my frugality is going to leave me with regret in the future.

Perhaps there is something to be said for dying penniless...like you timed it just right and crapped out at the finish line.

Dunno, not even sure I can do it since my nature is "frugal"...which is just churchin up being a cheapass bastard.

#29 frash.exe

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Posted 22 January 2013 - 05:03 PM

But seriously mutual funds

#30 thefuzz

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Posted 24 January 2013 - 10:49 AM

I don't understand this idea of never using credit cards. As long as you don't buy more than you could afford to pay with cash anyway, THEY PAY YOU TO USE THEM.



Many people can handle it like you described, but sooooo many more cannot. That's how they PAY YOU to use them.

Credit cards for many are used for non essential items...don't have the cash this month to take Mom and Dad to the chop house for their birthdays....put it on the card. Have a bad month at work, need new cleats for football for the son, and new tires....put it on the card.

Can't remember what the % is, but it's crazy high, how many Americans are two weeks from being broke if they don't have a paycheck.

IMO it's safer to stick with cash, and to keep 6 months living expenses on hand and not use credit.

How many homes were foreclosed on that were paid off in full?

#31 Carolina Husker

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Posted 24 January 2013 - 11:45 AM

I put everything except my car payments and my mortgage payment on my credit cards, and that's only because they won't let me.

#32 Happy Panther

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Posted 24 January 2013 - 12:10 PM

One thing I would do is make a retirement spreadsheet. Figure out when you will retire and how much you will need in the bank at that age. Excel has some nice scenario testing options so you can vary your interest rates and retirement age. Will give you a good range.

Make sure you add in college expenses for your kids and that sort of thing.

Once you see the monthly savings needed you may be surprised. Most people are.

#33 thefuzz

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Posted 24 January 2013 - 01:13 PM

One thing I would do is make a retirement spreadsheet. Figure out when you will retire and how much you will need in the bank at that age. Excel has some nice scenario testing options so you can vary your interest rates and retirement age. Will give you a good range.

Make sure you add in college expenses for your kids and that sort of thing.

Once you see the monthly savings needed you may be surprised. Most people are.



I have a slight issue with the bolded part.

I think that I will probably let them take out student loans, and if and when they graduate, I will pay them off, or at least pay off most of them.

Also, probably won't allow them to attend out of state, or private schools if I am going to pay it back.

#34 Happy Panther

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Posted 24 January 2013 - 02:04 PM

I have a slight issue with the bolded part.

I think that I will probably let them take out student loans, and if and when they graduate, I will pay them off, or at least pay off most of them.

Also, probably won't allow them to attend out of state, or private schools if I am going to pay it back.


That's fine. If you are going to pay it back then you still need include it as an expense especially if you are paying in retirement.