Budgeting

[I <3 Faulk]

6 hours ago, LETSGOBROWNIES said:

It’s not uncommon for one person in a relationship to be much better when it comes to budgeting than the other.

It’s the same in our house, except I’m the one who manages everything. My wife is the type of person who believes making a minimum credit card payment = my bill is paid.  I can’t do it.  She gets a set amount for fun money and I manage the rest.

I don't even mess with credit cards because I know myself too well. It's no bueno. 

[Mossburg]

5 minutes ago, I <3 Faulk said:

I don't even mess with credit cards because I know myself too well. It's no bueno. 

If this is the case, I'd still use a credit card but have the payment linked to a bank account that gets money (lets say $400 if that's your budget for a category, or sum for multiple categories) transferred in there automatically, so if you wanna buy something dumb, you know you won't have enough to pay for the CC bill. And the manual act of pulling money out of your savings or other funds to pay for frivolous spending is quite shameful.

[CWood21]

2 hours ago, Mossburg said:

"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

That's my point.  When you're younger, your spending is very limited.  It pretty much consists of food, gas, and the few luxuries (movies, video games, etc.).  It's a very basic budget at most.  And probably at the end of the day, not a real meaningful reason to have a budget.  That's not to say that you can't budget, but most 16, 17, 18, etc. year old aren't going to be making a budget.  As long as money out is equal or less to money in, there isn't an issue.  That isn't the case when you're working full-time generally speaking.  You're not just looking at a very simplified expenses.  You've got your necessities, your wants, your savings, and a rainy day slush fund if that's what you want to do.  There's more expense possibilities and you're more likely to spend more money than you're earning.

The point I'm trying to make is that when you're still rather young (16, 17, 18, etc.), there really isn't a whole lot of motivation or reason to budget.  You don't really have any real long term goals, and it's a pretty simple equation.

[I <3 Faulk]

8 minutes ago, Mossburg said:

If this is the case, I'd still use a credit card but have the payment linked to a bank account that gets money (lets say $400 if that's your budget for a category, or sum for multiple categories) transferred in there automatically, so if you wanna buy something dumb, you know you won't have enough to pay for the CC bill. And the manual act of pulling money out of your savings or other funds to pay for frivolous spending is quite shameful.

I don't buy things unless I have money for it seems easier that way. I have to want to pay interest for spending money that I worked to earn. 

[CWood21]

23 minutes ago, I <3 Faulk said:

I don't even mess with credit cards because I know myself too well. It's no bueno. 

If you're one of those that just instinctively pulls out a credit card for everything, that's probably a good mentality.  But at the same time, you need to build up your credit score.  Personally, that's the way I grew up.  I got a credit card in high school and I used it for two things: gas and food.  Now to limit myself, I made a rule that I could only eat out twice a week.  Between that and gas (~$30 every two weeks) I was spending roughly $35 a week.  Given that I was at a minimum wage job, that's essentially a shift at work would cover my weeks' worth expenses.  Beyond that, the money I made went in savings.

[CWood21]

1 minute ago, I <3 Faulk said:

I don't buy things unless I have money for it seems easier that way. I have to want to pay interest for spending money that I worked to earn. 

And what happens when you go to buy a house or a new car?

[I <3 Faulk]

Just now, CWood21 said:

If you're one of those that just instinctively pulls out a credit card for everything, that's probably a good mentality.  But at the same time, you need to build up your credit score.  Personally, that's the way I grew up.  I got a credit card in high school and I used it for two things: gas and food.  Now to limit myself, I made a rule that I could only eat out twice a week.  Between that and gas (~$30 every two weeks) I was spending roughly $35 a week.  Given that I was at a minimum wage job, that's essentially a shift at work would cover my weeks' worth expenses.  Beyond that, the money I made went in savings.

I had one when I was younger. A prepaid credit card that I put the money down to the bank. Cancelled it when my credit got better though. 

[I <3 Faulk]

1 minute ago, CWood21 said:

And what happens when you go to buy a house or a new car?

I've bought both. I currently have 2 cars and a home. One car was bought with cash, the other I'm making payments.

[I <3 Faulk]

3 minutes ago, CWood21 said:

If you're one of those that just instinctively pulls out a credit card for everything,

No I'm one of those that if I take home $1,800 for the week and my bills are only $600 for the week I end up broke. If I make $700 for the week and my bills are $650 I still end up broke, and my bills are still paid. I'll end up using a credit card to steal from Peter to pay Paul. That's why I'm not in charge of the money in my house though. Too many kids to not have discipline.

[Mossburg]

8 minutes ago, I <3 Faulk said:

I don't buy things unless I have money for it seems easier that way. I have to want to pay interest for spending money that I worked to earn. 

You don't have to pay interest. You can use the CC with a strict budget as a cash substitute while also getting the benefit of building your credit.

[I <3 Faulk]

1 minute ago, Mossburg said:

You don't have to pay interest. You can use the CC with a strict budget as a cash substitute while also getting the benefit of building your credit.

The reason why I cancelled the one I had was because after a year I started getting charged interested for every freaking purchase I made. 

 

I'll look into it. My credit is good right now (in the 7's) but it can always get better.

[CWood21]

23 minutes ago, I <3 Faulk said:

I've bought both. I currently have 2 cars and a home. One car was bought with cash, the other I'm making payments.

But you said it yourself, you used a credit card early to boost your credit score.  What happens had you not done that?  I'll use myself as an example, I'm in the "very good" category for credit score and tomorrow if I decided to go buy a new car and I get an offer of interest rate of 4%.  What do you think the person who has the same qualifications as me, but has no (or even bad) credit score going to get charged in terms of interest?  Probably 2 or 3 times as much as I am.  LIS, as long as you're not one of those people who just instinctively swipes your card, it's not a bad idea because it helps boost your credit.

[pwny]

Why do people always find it necessary to talk someone else into using a credit card? Yes, they’re great if you use them as an extension of your bank account. But if someone doesn’t trust themselves to do that, why are we trying to tell them to just do it and it’s going to be okay? He tried it before and ended up playing the interest game. He doesn’t think he’ll keep himself from doing it again. That’s fine. Going into debt just to get a good credit score is bad.

[LETSGOBROWNIES]

I’m all about credit cards.

I carry no balance, pay no interest, pay 80 bucks a year for the card and get 1k roughly in travel rewards annually while helping my credit score.

I use it for everything.  Last few cars I used the card for a down payment just for the points.

[LETSGOBROWNIES]

2 minutes ago, iPwn said:

Why do people always find it necessary to talk someone else into using a credit card? Yes, they’re great if you use them as an extension of your bank account. But if someone doesn’t trust themselves to do that, why are we trying to tell them to just do it and it’s going to be okay? He tried it before and ended up playing the interest game. He doesn’t think he’ll keep himself from doing it again. That’s fine. Going into debt just to get a good credit score is bad.

Yeah, they’re for sure not for everyone.