Personal Finance Thread

[naptownskinsfan]

We’ve had a couple of recent discussions here in the WAYTA thread about personal finance.  So that’s what this thread is for.  This is NOT for specific stock market/coin discussion.  

So start us off, a couple questions: 

1.) How do you track your budget?  Specific app, spreadsheet, etc 

2.) If you have a HYSA, what bank is it with?  

3.) Top 3 financial podcasts/shows/persons to listen to? 

[ramssuperbowl99]

Great topic. Please don't let this turn into reddit wallstreetbets.

Posting the flowchart:

 

This is not perfect, interest rates have changed so the concept of what is moderate debt is outdated in today's goofy environment, and I will argue that an HSA is a superior retirement account to a 401k. But this is the best graphical representation of how to be wealthy for a newbie that I've seen.

[Tank4Drake]

15 minutes ago, ramssuperbowl99 said:

Great topic. Please don't let this turn into reddit wallstreetbets.

Posting the flowchart:

 

This is not perfect, interest rates have changed so the concept of what is moderate debt is outdated in today's goofy environment, and I will argue that an HSA is a superior retirement account to a 401k. But this is the best graphical representation of how to be wealthy for a newbie that I've seen.

Pretty good list. I'd make Step 3 as Step 2... hate debt. Also would make Step 6 as Step 5, switch the two. Like if you're maxing out a IRA and doing like 6-10% in a 401k already, I'd rather save money to start a business than do 20% in 401k. But that's just me, I'm more of a risk taker. I actually did start a business recently and pulling 15-20k a month. I think everyone in the country should start some kind of online business as long as you can bootstrap it. Never go in debt.

Edited Monday at 08:53 PM by Tank4Drake

[ramssuperbowl99]

10 minutes ago, Tank4Drake said:

Pretty good list. I'd make Step 3 as Step 2... hate debt. Also would make Step 6 as Step 5, switch the two. Like if you're maxing out a IRA and doing like 6-10% in a 401k already, I'd rather save money to start a business than do 20% in 401k. But that's just me, I'm more of a risk taker. I actually did start a business recently and pulling 15-20k a month. I think everyone in the country should start some kind of online business as long as you can bootstrap it. Never go in debt.

Consider the target audience, and think 80/20 rule.

If you are financially savvy enough where you can start your own business with a reasonable expectation of profit, you do not need the flowchart.

If every exception was included, it'd be 8 miles long. Things like pursuing student loan forgiveness, or pursuing a military-based 0% down home loan would be far more applicable to the general PF-newbie population, but aren't included here. This is a starting point for people who need a rough idea and don't want to resort to Dave Ramsey, not a be-all-end-all for every situation.

[naptownskinsfan]

14 hours ago, Tank4Drake said:

Pretty good list. I'd make Step 3 as Step 2... hate debt. Also would make Step 6 as Step 5, switch the two. Like if you're maxing out a IRA and doing like 6-10% in a 401k already, I'd rather save money to start a business than do 20% in 401k. But that's just me, I'm more of a risk taker. I actually did start a business recently and pulling 15-20k a month. I think everyone in the country should start some kind of online business as long as you can bootstrap it. Never go in debt.

I see your point on the last one, and I hate debt too and am working my way out of the last of mine, but the matching funds for retirement is way too big of a thing to ignore.  Would it speed up my time to get out of it?  Yeah, but then I also wouldn’t have the matching funds as well.  So while that could free up, say, $500-$600 a month per person in a household, you are also giving up the same $500-$600 in employee match, which is also compounding over time. 

I wouldn’t spend a cent over the employee match while trying to get out of debt, but I don’t like leaving money on the table either. 

[MWil23]

1 hour ago, naptownskinsfan said:

I see your point on the last one, and I hate debt too and am working my way out of the last of mine, but the matching funds for retirement is way too big of a thing to ignore.  Would it speed up my time to get out of it?  Yeah, but then I also wouldn’t have the matching funds as well.  So while that could free up, say, $500-$600 a month per person in a household, you are also giving up the same $500-$600 in employee match, which is also compounding over time. 

I wouldn’t spend a cent over the employee match while trying to get out of debt, but I don’t like leaving money on the table either. 

Well said;

And there is a good follow that falls more in line with @ramssuperbowl99's flow chart that I would recommend (Money Guy):

They break down an "emergency savings" early on as make sure you can cover your HIGHEST insurance deductible, and make sure you don't leave money on the table in an employer match. From there, focus on eliminating all higher interest debt, and that way, if something breaks, you likely can cover those expenses with your insurance deductible.

From there, once you have that debt eliminated, build that 3-6 month nest egg emergency fund in a high yield savings or Money Market account. If you have anything leftover after that, then invest into a ROTH/HSA and make sure you max out your retirement from there.

He makes the important note that almost nobody can get past FOO #5 (Financial Order of Operations) or FOO #6 for a long time, and uses the analogy that you should "put your oxygen mask on before helping others), meaning save for your own self/future self as opposed to college expenses and such for kids.

[TLO]

Need @mission27 to weigh in on this thread tbh