Budgeting

[ramssuperbowl99]

13 minutes ago, Mossburg said:

Depends on the car maybe? I don't think it was 4 years, but when I was buying a car some years ago, there were older cars on the lot they were trying to get rid of that they were offering 0% before any kind of price negotiation. Maybe they'd not lower the sticker price as much as on others that aren't 0% financing, but the sales guy tried really hard to get me to take interest.

I would guess that the dealership was given metrics on the number of 0% financed sales they wanted to hit, and the sales guy was looking for some type of bonus.

Ultimately, the car dealership math comes down to them having a certain car that they need to clear $X on to make a profit. They're going to get $X for it, whether that's $X in principal on a 0% interest loan or $Y in principal plus $Z in interest where X=Y+Z.

[MWil23]

17 minutes ago, ramssuperbowl99 said:

Not directing this at you, but as a heads up to anyone who is getting a new car, the 0% interest thing is really just a mathematical quirk. If you want 0% interest, the car dealership will raise the initial price of the car so that the new principal would equal the old principal plus the interest they'd expect you to pay.

Yeah, I should probably have specified that I lied a tad. I actually have an interest payment, but the cost of buying the car with the same month commitment (72 months) was LOWER with the interest than it was with 0%, so that's the route we did. 

I was just trying to reinforce the "debt free besides the house" part. Apologies if I was misleading.

[Mossburg]

8 minutes ago, CWood21 said:

I should have elaborated a bit.  I was trying to explain that the people who really need to budget are those who work full-time.  I mean, how many PT high school workers have significant expenses?  Most are probably still on their parents' insurance, maybe paying car insurance, etc.  Overall, they've got very minimal responsibilities financially.  Once you are working full-time, you're likely living on your own, responsible for your own health insurance, etc.

I think everyone should at least track their expenses, even if they don't want or don't feel the need to budget. Seeing those cumulative numbers over a period of time is pretty valuable IMO.

[CWood21]

Just now, Mossburg said:

I think everyone should at least track their expenses, even if they don't want or don't feel the need to budget. Seeing those cumulative numbers over a period of time is pretty valuable IMO.

Your spending habits as a 17 year old compared to a 27 year old are vastly difference.  You might learn some stuff, but if you're applying what you did when you were 17 to what you do when you're 27, you're going to have issues with money IMO.

[ramssuperbowl99]

1 minute ago, CWood21 said:

Your spending habits as a 17 year old compared to a 27 year old are vastly difference.  You might learn some stuff, but if you're applying what you did when you were 17 to what you do when you're 27, you're going to have issues with money IMO.

But you learn the skillset that you can take with you as an adult. "What money do I have coming in, what money do I have coming out" is a fundamental personal finance question that is much easier to wrangle when you have 2 expenses: gas and movie tickets as a 17 year old instead of all of the expenses that you have as a 27 year old.

It's a harder as an adult, sure. If the 27 year old thinks that he can spend 10% of that paycheck going to see Star Wars, it's gonna be a rough month. But it's the same principles.

[ramssuperbowl99]

8 minutes ago, MWil23 said:

Yeah, I should probably have specified that I lied a tad. I actually have an interest payment, but the cost of buying the car with the same month commitment (72 months) was LOWER with the interest than it was with 0%, so that's the route we did. 

I was just trying to reinforce the "debt free besides the house" part. Apologies if I was misleading.

You weren't misleading. It was a PSA for anyone who is new to buying cars. I had friends brag about getting 0% interest on high principal loans and always regretted not saying anything. Some learned their lesson, some didn't.

[MWil23]

3 minutes ago, ramssuperbowl99 said:

But you learn the skillset that you can take with you as an adult. "What money do I have coming in, what money do I have coming out" is a fundamental personal finance question that is much easier to wrangle when you have 2 expenses: gas and movie tickets as a 17 year old instead of all of the expenses that you have as a 27 year old.

It's a harder as an adult, sure. If the 27 year old thinks that he can spend 10% of that paycheck going to see Star Wars, it's gonna be a rough month. But it's the same principles.

I'm a HS teacher, and one of the best real life conversations was with one of my 16 year old students who came into class every single day with a $4 Starbucks drink. Aside from the nutrition conversation, I explained to her that she was spending upwards of $25 a week on coffee and $120-$125 a month on coffee. We calculated, CONSERVATIVELY, as she also would get smoothies, etc. that she spent $1,500 a YEAR on coffee/specialty drinks.

She was horrified, so we came up with some basic budgeting principles/hints, like purchasing a coffee pot (which she did) and some other things. It worked and she learned some life lessons.

It's not the same as a "budget" per say, but these spending vs. savings principles have stuck with her.

JMHO

[LETSGOBROWNIES]

24 minutes ago, Mossburg said:

I mean anyone who put any research before they bought a car should know how that works. Once I narrowed down the car I wanted, I visited multiple dealerships and got them to give me the out the door price in writing. The variance was somewhere between $1500-2000 from lowest to highest. The place where I bought definitely made money off me (as any business would), but I feel better knowing someone somewhere else would have made even more.

You be surprised... I used to work at a dealership and folks would leave believing we broke even.

[Mossburg]

11 minutes ago, CWood21 said:

Your spending habits as a 17 year old compared to a 27 year old are vastly difference.  You might learn some stuff, but if you're applying what you did when you were 17 to what you do when you're 27, you're going to have issues with money IMO.

"Cumulative numbers over a period of time" meant more like seeing what you send on lunch over a month, or a year, not comparing decades worth of spending (which could actually be interesting for different reasons, or at least amusing), people often get the "Whaaaa? That's how much I spend on food???" effect when they see the number

[theJ]

22 hours ago, iPwn said:

I still have habits to break, but they’re getting there.

It's hard when you're single.  There's no one to keep your accountable.  I had the same trouble before i got married.

[MWil23]

Just now, Mossburg said:

"Cumulative numbers of a period of time" meant more like seeing what you send on lunch over a month, or a year, not comparing decades worth of spending (which could actually be interesting for different reasons, or at least amusing), people often get the "Whaaaa? That's how much I spend on food???" effect when they see the number

Basically my reasoning on my boring example/story a couple of posts above.

[pwny]

3 hours ago, ramssuperbowl99 said:

I'm not knocking you. I just saw "not good with money", "joint checking account", "girlfriend".

If you trust this woman enough to marry her, you're in it for the long haul and besides, I don't think the joint checking account is a bad idea, especially if you guys are going to combine everything once you're married anyway.

I also think the way he’s doing it is the right way to do it. Each person has their individual accounts, and they have a joint account. The joint accounts are solely for things that both use on a monthly basis; rent, utilities, joint groceries, etc. The other money being personal monies.

My girlfriend and I have spent a lot of time talking about finances and we’ve both come to the conclusion that this is how we’re going to do things when the time is right. *Maybe* a joint savings account for things like vacations or other things we would jointly save on, but even that we’re iffy on. But aside from co-mingling money for things that we do together, money is going to stay separate. No joint credit cards. No co-signing on a car even if one person “totally promises they’re going to pay for it themselves”. That doesn’t mean I can’t pay for her dinner with my money should I choose to, but rather our individual money should be for what we individually choose to do with it.

There may be some caveats on that. Should one of us end up making a lot more than the other, we may decide to redistribute money so that the lesser earner has a reasonably close “equal share” or that one person pays a higher percentage of shared expenses or that the majority of the lesser earner’s *original wage* goes into savings accounts for us or other stuff.

But that’s basically the plan. 70% of couples fight about money more than any other topic combined. 46% of arguments are over frivolous purchases. 33% about household budgeting. 26% over credit card debt. 25% over insufficient emergency saving, and 22% about retirement savings. So I think laying a very strong framework that we work around, with checks in place for those things is going to make things run smoother.If our share of monthly expenses is automatically going into the joint account, our retirement savings are automatic, and our savings account is automatic, that kills 3 of the 5. Keeping personal money separate means I have no reason to care what her credit card balance is or what she’s spending her personal money on. It means nothing to me because it makes no impact on my life.

Having this all in place also seems like it would turn things into a “civil discussion” about how things should be going forward, rather than an argument about how things are already. If we agree to save 10% and someone changes their automatic debit, they’re in the wrong. But if they come and say “I can’t afford 10%,” then that gives an opportunity for a change.

But also maybe I’m living in a pipe dream and it’s an inevitability.

[pwny]

46 minutes ago, theJ said:

It's hard when you're single.  There's no one to keep your accountable.  I had the same trouble before i got married.

It really is. I have no one to look out for but myself. If my bills are paid, why not go buy a $200 pair of sunglasses? And since I’m downtown already, why not go drop $70 on a bar tab on the way home from buying them? Oh, now I’m hungry. Why not go drop $30 at a diner at 3am. And before I know it, I’ve spent $300 on stuff that doesn’t matter that much.

[Mossburg]

9 minutes ago, iPwn said:

It really is. I have no one to look out for but myself. If my bills are paid, why not go buy a $200 pair of sunglasses? And since I’m downtown already, why not go drop $70 on a bar tab on the way home from buying them? Oh, now I’m hungry. Why not go drop $30 at a diner at 3am. And before I know it, I’ve spent $300 on stuff that doesn’t matter that much.

This is a foreign concept to me, maybe because I was raised by cheapasses. I've done some frivolous spending on tech things, but my budgeting has taken care of that.

[pwny]

3 minutes ago, Mossburg said:

This is a foreign concept to me, maybe because I was raised by cheapasses. I've done some frivolous spending on tech things, but my budgeting has taken care of that.

It had the opposite impact on me. Of course, my mom was beyond just “cheap” though. So anytime I got money, I always had stuff I actually needed to get myself. I was working small jobs for neighbors when I was 13 so that I could buy myself deodorant, razors and new socks. So I developed a habit that as soon as money came in, it had to be going out. There was no large level saving, because saving meant that my bike didn’t get the brakes replaced or I didn’t get shaving cream or whatever. Money I got had to be spent on something that I was missing as soon as I got it. And it’s just kinda snowballed from there.