Money Saving Habits

[disneysteve]

1) Don't Ever use CC
2) Pay what you can afford

If you follow #2, there is no reason to follow #1.

If you are only making purchases that you can afford, what's the difference how you pay for them?

[Nutria]

If you are only making purchases that you can afford, what's the difference how you pay for them?

Dogma, naturally.

Credit cards are Eeeeevil because St. Dave of Ramsey says so. In church.

[tripods68]

If you follow #2, there is no reason to follow #1.

If you are only making purchases that you can afford, what's the difference how you pay for them?

Step 1. Avoid CC

Step 2: Pay what you can afford. Debit card is a form of cash too since they are link to a checking account. Spent only what you have available in checking account.

[disneysteve]

Dogma, naturally.

Credit cards are Eeeeevil because St. Dave of Ramsey says so. In church.

Seriously, as I've said, I don't disagree with Dave Ramsey's teachings. His system has rescued thousands of people. His advice for getting out of debt is spot on.

There is a population of people who shouldn't go anywhere near a credit card as long as they live because they simply lack the capacity to behave responsibly. For those folks, I agree 100% with a cash-based life. That doesn't eliminate poor spending decisions but it reduces the magnitude of them.

That said, I think many or most of those problems could have been avoided had they been taught proper money management at a young age by parents who knew what they were doing themselves. Rather than telling our child to never use a credit card, I would much rather teach her how to properly and responsibly use a credit card, following the example that my wife and I have set.

Credit cards are just a tool. Tools can be used to your advantage or you could chop off your hand if you're not careful. Rather than saying, "stay away from tools" I prefer to teach safe use.

[tripods68]

Dogma, naturally.

Credit cards are Eeeeevil because St. Dave of Ramsey says so. In church.

I'm guessing you don't like DR? I'm guessing the part about CC.

Have attended Dave Ramsey FPU class, or read any of his book?

[Nutria]

Rather than telling our child to never use a credit card, I would much rather teach her how to properly and responsibly use a credit card, following the example that my wife and I have set.

But which is easier and satisfies the religious urge for simplistic, absolute answers?

[corn18]

I take the same approach to teaching my kids about CC's as I have with guns. Both can be dangerous if used improperly. I would rather I teach them the proper way to use them than teach them they are evil and should never touch them. The former greatly reduces the risk they will abuse them. The latter is irresponsible.

[disneysteve]

But which is easier and satisfies the religious urge for simplistic, absolute answers?

Some people need absolutes. For some people, things need to be black and white. And I in no way mean that as criticism. I just don't happen to be one of those people.

[Gailete]

Disney Steve said

Cash, on the other hand, is not as "real" to me. I know that sounds strange but in my mind, once the cash is out of my account, it's as good as spent. I'm not as careful spending actual cash as I am using my credit card because with the card, I'm always cognizant of the fact that there will be a bill to pay later. Does that make sense? I know I'm weird in that sense. It's just how my mind has always worked.

I will admit to the same 'problem'. I rarely have any money at all on me other than a quarter, dime, nickle and penny for parking meters in my town, and yes we actually have some penny meters! I want to be sure I don't end up having to PAY a parking fine for lack of a dime. Money in my wallet always equals money I can spend!

We have something like about 12 different bank accounts. Hubby can't even begin to undertand why I do it that way, but as I am the one that handles the money, I have to do it in a way I can handle. He always had a checking and savings account and could handle things that way, although once I married him I found that he had monthly auto payments for things he wasn't using as he never inspected his cc bills before paying them. One of those line item things was $40/month! I pay most bills on line, so saving the cost of a check and stamp. But the reason for the different accounts is so I know what has been set aside for what. As self employeed people was have to pay estimated taxes every quarter, so we have a tax account. We own a rental property so an account for that so that when the fire insurance, etc. comes due, we are pulling it out of the rental money, not the grocery money. We have a Christmas Club account so that each Christmas we have enough for the simple presents we give, etc.

Years ago I read and reread a book by Carol Keeffe called How to Get What You Want In Life With the Money You Already Have available at Amazon at http://amzn.to/1syE01K It is a profound book for people trapped into the debt cycle and trying to get out. But an easily understandable book tht Dave Ramsey would never approve of. I found this book during the time I was married to the moneyholic. He would tell me something would run around $40 and that meant usually around $200. In a year and a half we were $42K in debt! I was desparate to get on stable ground. And I did. But I had to divorce him and sell our house, car etc. in the process. But it was this book that got me thinking of having more than one account. Every time I happening along a 'spare' dollar or so, I tucked it into an envelope in my day timer (where he wouldn't look for cash). After about a year we went to an eyeglass place so I could get the new glasses I had very much needed. We he saw me pull out this wad of CASH to pay, his eyes about fell out of their sockets. You see he could never ever delay gratification. We got calls from creditors for years after he was out of our lives. But knowing that setting aside little bits to achieve a big goal was life changing for me. I had always been frugal and a saver, but that helped me be much more focused although due to the irratic pay that we get it does make things harder and we do have cc cards that we can't always pay off each month. Do I like that? NO. But I try hard to keep the cost minimal. Even to making cc payments weekly to avoid some of the interest monthly if it comes to that.

I even learned when paying cc bills to help get the big balance down, I would round off the mount owed. At first if was only to the next dollar, then next five dollars and so on. It helps. Once you are in that trap, it takes a big shovel and a lot of smaller things to get back out.

[tripods68]

But which is easier and satisfies the religious urge for simplistic, absolute answers?

It's not about religious but you seems to keep bringing church or religious faithful into the discussions that I never brought up. You seems to associate Dave Principle as some Republican fanatic or cult; therefore I am. Wrong.

I follow DR principle not a fanatic religious cult BUT against DEBT period. Nothing more. Most people starts with CC, small charges here and there, and eventually they run up their bills beyond their control to impress friends and the "joneses". What I am saying to those who want to stay responsible or thinking about using it simply AVOID IT at all cost.

So you avoid the long term consequences that breaks up marriages, divorces, bankruptcy, and depression. If CC is evil because of this consequences, so be it because it happens a lot, every day people are binging on CC usages. Credit card companies loves those who uses their credit card/reward points system because eventually many more won't be paying their credit card balances on time, racking up thousand/millions/billions of interest charges In some ways you are playing (house money) their game.

Most end up in SA forum asking "I need help to get rid of my $15K CC".

As for our children, you can teach child how to operate guns too. But eventually something terrible happens. I don't have a gun, nor own one. We've never been robbed either.

I teach my daughter the affect of credit cards on people (referring to family/friends why many of them in so much debt). You can be responsible and teach them how to be responsible and ways to avoid not be on debt while they live at home. Eventually they will be on their own and some might outlier will spend a $1200 Louis Vuitton purse on CC that they can't pay. I can only "hope" my teaching at young age will resonate when she is in college and beyond.

Statistic don't lie, numbers don't lie. You may choose to ignore the math, but the truth is people will always overspend those using CCs versus Debit/cash transactions.

Imagine, if there were no CC, just debit/cash what do you think our economy would look like today? How this affect your life psychological or financially? Would you invest more, or spend more on junk things...Would you be rich, or wealthy today without debt?

Certainly you would NOT say, I'm RICH and Wealthy because I got free bonus points on my reward card, "dinner is on me" Not because we became wealthy because we saved a lot. And I'm not referring to those who say, "I got wealthy because of real estate". There are those got rich using other's people money". I'm fine with that. In general, the majority of people get rich because they invest, invest consistently and probably avoided debt as much as possible. You can define "rich" however you want. The point: Avoid debt to be Rich. That's my ultimate end game in all this.

[41Fin]

Unless I am planning on making a big purchase or getting gas, I usually leave my cards at home. I have a co worker who goes to 2-3 retail stores a week and I usually come with just to get out of the office. I try to have discipline but we all slip up so just to avoid temptation I can't spend what I literally don't have.

Keep a little cash on my person but my best money saving habit is just not to keep it on me.

Also direct deposit to a savings account with no debit card helps.

[disneysteve]

It's not about religious but you seems to keep bringing church or religious faithful into the discussions

Come on, tripods. If you have ever listened to Dave Ramsey you know it is a religion-based program. He quotes scripture constantly. Where is FPU held? If I'm not mistaken, it is almost entirely a church-based program. I just did a search for FPU classes in this area. Every single result was a church. No community centers. No schools. No synagogues or mosques. All churches.

There's nothing necessarily wrong with it being a religious program so don't think I'm criticizing that aspect of it. Just understand that it isn't something that everyone is into personally.

[tripods68]

Come on, tripods. If you have ever listened to Dave Ramsey you know it is a religion-based program. He quotes scripture constantly. Where is FPU held? If I'm not mistaken, it is almost entirely a church-based program. I just did a search for FPU classes in this area. Every single result was a church. No community centers. No schools. No synagogues or mosques. All churches.

There's nothing necessarily wrong with it being a religious program so don't think I'm criticizing that aspect of it. Just understand that it isn't something that everyone is into personally.

I listen to DR every week. Dave Ramsey is religious man but in this discussion (current topic) I didn't bring up church or religion. I don't want to offend other people. However, Nutria did bring it up. So he may have against Dave R and his religious cult.

[DaveInPgh]

Step 1. Avoid CC

Step 2: Pay what you can afford. Debit card is a form of cash too since they are link to a checking account. Spent only what you have available in checking account.

I use a Credit Card to pay for almost everything. In the past 25 years, I haven't paid a single penny in CC interest and I have earned money for my purchases.

[tripods68]

I use a Credit Card to pay for almost everything. In the past 25 years, I haven't paid a single penny in CC interest and I have earned money for my purchases.

You're the good guy.