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#1 - get rid of the car payment --- you should only buy used cars and with cash. Car loans are a bad deal. Your car will only go down in value over time - don't take out a loan for it.
#2 - pay off all your credit card debt - each month. Never carry a balance
#3 - cancel cablevision - won't hurt you in any way and indeed with the proper modern antenna you will be able to pick up channels on your TV without a monthly payment
#4 - cancel your cell phone contracts & instead buy one or two pay as you go cell phones. In all seriousness your family probably only needs one - evaluate if that is true.
#5 - buy secondhand clothes for yourself and your kids (Good Will or Salvation Army), and don't buy things for them just to keep up with the Jone's.
#6 - Tax-wise I suspect that you are paying a lot of taxes annually. Do you have an accountant? If not get one and get some advice for potential deductions you'll be able to take advantage of next cycle.
#7 - make certain you are contributing to your 401 or IRA's every paycheck - at least 10% of your income. This is important - you will need money when you retire as Social Security will not be there for you.
#8 - don't go out to eat - pack your own lunches to eat at work and use the coupons which come in everyone's Sunday paper. Have relatives or friends give you their's if they don't use them. Coupons can be a huge monthly savings for the smart shopper.
#9 - investigate starting your own business. It's an unadvertised fact of life - you will not get rich working for other people. Ask any millionaire you know and you will learn the trickle down theory doesn't work in corporate america. The earlier you start your own business the better off you'll be. The more tax write-offs you'll have, and the more you'll feel empowered as the amount of work you put in will directly correlate to your income.
lastly - you need to lighten up a bit and perhaps start meditating or worshipping or doing whatever clears your mind of your financial woes. Perhaps watch the movie called "The Secret" (if you do an online search for it also include the phrase: Law of Attraction). The concepts aren't bad and applicable to most people.
Location: Stuck on the East Coast, hoping to head West
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we went through something similar years ago and learned a great deal--maybe some of it will help you.
1) Our house cost us much more than we ever budgeted for. I'm not talking about monthly payment, either. I'm talking about all of the maintenance that goes into owning a home. Our biggest issue was that we did not have enough money set aside for emergencies. When we had a plumbing issue, for example, we had no choice but to charge and then play catch up with the credit cards. It seemed like we never got ahead. Now we have x amount of $ in the bank at all times and we took on part time jobs to get that money (and we have kids so it was a struggle for a little while). Huge psychological lift to have that cash there.
2) we stopped using our credit cards cold turkey. Really. If we didn't have the cash, we didn't buy it. Now if we use a credit card, we write it down on a running log so that we keep cash in the bank to pay it off at the end of the month.
3) Regarding cars, I buy new or used depending on the circumstances surrounding the deal. But I have never had more than one car payment at a time and I've never had an upside down car loan. We drive cars into the ground.
4) Decide what you can't live without and be willing to make sacrifices to keep it. For us, we love family trips. So we take them--always paying cash. The trade off is that I have old, slip-covered furniture, a bare bones cell phone (I don't even have texting) and no big-screen tv. But to me its worth it. Find something that brings you pure joy and keep it in your life. Every choice we make precludes another so make sure that everything you're working so hard for is worth it.
I feel for you. First, get your expenses straight. It may be dull as Hell not being able to spend money as you wish, but you need to start saving. It will make you feel better long term than spending. Second, don't think of yourself as poor. Think of yourself as where you want to be. I know it sounds like mindwashing but it works. Sit down with your bride and write down your goals for the next 3 years. Then break them down into yearly goals, then quarterly, then monthly, then weekly and yes, daily. Hold one another accountable for meeting these goals. Think of yourself where you want to be in 3 years - and that is not poor. Also, don't confuse assets with liabilities. If you own something, and it cost you more money to own it than it brings in income, it's a liability. Go buy yourself a decent book on personal finance. Read it and discuss it with your bride. Together you can work to pull yourself out of the situation you dislike and into a lifestyle you can rejoice in. And you'll be proud of yourself and each other that you did it together. Best of luck to you!
Just posting this means you are brighter than most! You got excellent advice and the OP are all right. You don't need to make millions to do well, you just need to use what you have well.
The digging yourself out period is no fun but the rewards are worth it.
One little thing I can add. Buy a small notebook and for a month or 2 write down every cent you spend. You will learn a lot!
Write down every penny you spend. You are living beyond your means and if you write down every penny as you spend it you will see where it is going. Also, listen to Dave Ramsey on the radio.
#1 - get rid of the car payment --- you should only buy used cars and with cash. Car loans are a bad deal. Your car will only go down in value over time - don't take out a loan for it.
#2 - pay off all your credit card debt - each month. Never carry a balance
#3 - cancel cablevision - won't hurt you in any way and indeed with the proper modern antenna you will be able to pick up channels on your TV without a monthly payment
#4 - cancel your cell phone contracts & instead buy one or two pay as you go cell phones. In all seriousness your family probably only needs one - evaluate if that is true.
#5 - buy secondhand clothes for yourself and your kids (Good Will or Salvation Army), and don't buy things for them just to keep up with the Jone's.
#6 - Tax-wise I suspect that you are paying a lot of taxes annually. Do you have an accountant? If not get one and get some advice for potential deductions you'll be able to take advantage of next cycle.
#7 - make certain you are contributing to your 401 or IRA's every paycheck - at least 10% of your income. This is important - you will need money when you retire as Social Security will not be there for you.
#8 - don't go out to eat - pack your own lunches to eat at work and use the coupons which come in everyone's Sunday paper. Have relatives or friends give you their's if they don't use them. Coupons can be a huge monthly savings for the smart shopper.
#9 - investigate starting your own business. It's an unadvertised fact of life - you will not get rich working for other people. Ask any millionaire you know and you will learn the trickle down theory doesn't work in corporate america. The earlier you start your own business the better off you'll be. The more tax write-offs you'll have, and the more you'll feel empowered as the amount of work you put in will directly correlate to your income.
lastly - you need to lighten up a bit and perhaps start meditating or worshipping or doing whatever clears your mind of your financial woes. Perhaps watch the movie called "The Secret" (if you do an online search for it also include the phrase: Law of Attraction). The concepts aren't bad and applicable to most people.
great points especially number 9....People really think its corporate america job to make them wealthy. Not unless your a shareholder do they care...start your own business and ye shall find salvation..If it fails, start another and another and another
I feel for you. First, get your expenses straight. It may be dull as Hell not being able to spend money as you wish, but you need to start saving. It will make you feel better long term than spending. Second, don't think of yourself as poor. Think of yourself as where you want to be. I know it sounds like mindwashing but it works. Sit down with your bride and write down your goals for the next 3 years. Then break them down into yearly goals, then quarterly, then monthly, then weekly and yes, daily. Hold one another accountable for meeting these goals. Think of yourself where you want to be in 3 years - and that is not poor. Also, don't confuse assets with liabilities. If you own something, and it cost you more money to own it than it brings in income, it's a liability. Go buy yourself a decent book on personal finance. Read it and discuss it with your bride. Together you can work to pull yourself out of the situation you dislike and into a lifestyle you can rejoice in. And you'll be proud of yourself and each other that you did it together. Best of luck to you!
Good, sound advice! The book which got me started towards understanding money was called "Sylvia Porter's Money Book." It gave me the tools I needed to understand budgeting and investing. Thirty years later, I can say it worked wonders for my financial well being.
Think about this. You buy a car for ... say... 30,000. Three years from now, you try to sell it and can only get.... what?? 20k? what kind of a deal is this?
I will never buy a new car again. I have 4 vehicles ranging from 5-10 years old. I sleep much better at night knowing that I have no car payment. This will save you at least 800 a month if you have 2 cars. To me, this is a big thing that people can cut to save money. Just because your car is older does not mean it can not be nice. If you are a person that likes to drive a nice car because it makes people think you are a success..... forget it. I have a great job and I make tripple numbers. Yet, I drive an old car. I rest easy knowing that I am saving money and making money by putting it in to my house and investments. These are what makes you money.
Student loans are yikes!!! At least for us they were. 10 years of debt burden. And with the ones we had, you could not pay off early to save $$ on interest either. Once you get done with those, you will breathe a lot easier. Unfortunately, there's nothing you can do about them that I know of.
Student loans s**k - I am hoping my kids won't have to take them out - which is why we are saving $ for them.
Put us back ten years from a house purchase and having children, so I had kids late in life - not something I really wanted to do.
Cut out all unnecessary expenses, like going to movies, eating out, etc. that helps.
Student loans are yikes!!! At least for us they were. 10 years of debt burden. And with the ones we had, you could not pay off early to save $$ on interest either. Once you get done with those, you will breathe a lot easier. Unfortunately, there's nothing you can do about them that I know of.
Student loans s**k - I am hoping my kids won't have to take them out - which is why we are saving $ for them.
Put us back ten years from a house purchase and having children, so I had kids late in life - not something I really wanted to do.
Cut out all unnecessary expenses, like going to movies, eating out, etc. that helps.
Educational loans are going to be a major topic of concern in the years to come. It's a relatively young political issue which is significant as people are graduating from college with enormous debts only to start careers which don't enable repayment in a reasonable amount of time.
Like you I don't want my kids to get indebted - but with the projected costs of education I doubt I could save fast enough starting today to cover all their costs unless they get full scholarships somewhere.
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