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We (as a society) have become fixated on temporary happiness, and try to buy it -- latest gadgets, clothes, cars, trendy restaurants, vacation spots. But in reality, what makes many (not all) people happy is having a nice warm place to come home to, where all of the utilities work because they're paid for. Where the cupboards and fridge are full because there was plenty of money to provide for food. These things should be a priority. Not living under a bridge -- that makes me ecstatic!
I do this too. Plus, I'm secretly fascinated by what other people make, and what they choose to spend money on.
Me too. Being secure -- now THAT makes me happy!! I was laid off and didn't panic because I had built up a substantial emergency fund.
I completely agree with you, material things don't make you happy, doing what you like with a comfy place to live and enough to eat, is good enough for me!
Actually, I think the author of that site is a sociopath. She's very much into spirituality, evil energy and all that baloney. There's probably some truth to what she said about Suze, but can't believe everything this Sharon woman says, either. Who knows what really happened...
Yes, that was the conclusion I came to, as well. And on that web site kept repeating the same information over and over again. That was annoying. If she really wasn't intending to trash Suze, she would have said what she needed to once and been done with it.
Last edited by mysticaltyger; 10-27-2013 at 01:49 PM..
She is right about that. I think her "If you can't afford to pay it off in 3 years" standard is reasonable. I prefer to pay cash myself...but for someone just starting out after school, etc, a 3 year loan would be reasonable. She's also right about keeping your car for 10 to 15 years.
Regarding the question "how can you save X% when you 'only' earn $Y?", the answer is kinda simple - live the way you'd live if you only earned 85% (or whatever) of $Y. In the end it's all about how you prioritize limited resources (time as well as money).
Let's say you're going to spend $55,000. What you would want to do is figure out how best to spend that $55,000 to essentially maximize the value to you of that $55,000 worth of "stuff". So imagine virtually listing that out, from top priority to bottom. Imagine that exercise WITHOUT CONSIDERING INCOME EARNED. If you're taking home $70,000, then woo-hoo, you've got everything covered and can save $15,000 above that.
Let's now change that and say that you've been spending $55K but only taking home $50K. OOPS! You're running $5K in the hole every year, and given interest and such on that growing debt it's only going to get worse. OK, so take your list and cut it back to...I dunno, let's say $45K. Get rid of that bottom priority $10K in expenses, essentially. Now, some of that might be completely getting rid of actual items ("I'm not gonna spend another $2K on an annual subscription to the 'Fish-Of-The-Month' club"), and some of it might be reducing other expenses ("I can spend $200 a month eating out instead of $350").
Now, MY priorities will be different from yours (whoever "you" are reading this). We can suggest general areas where most people tend to spend a bunch that they likely can cut without too much pain (make your own coffee in the AM instead of spending $3+ at Starbucks every day, cook your own food and eat out less, drive less expensive cars, whatever), but really, everybody assigns different values to different things. As long as it's not illegal or harming your children or something like that, I don't really care if you spend $2K/month dining out but sleep in your car instead of renting an apartment. Certainly not the choice I'd make, but whatever.
Point is that we have a tendency to think of all of our expenses as "necessities" rather than "choices". This is why you hear people earning 200K/yr complaining about how they can possibly get by on a 5% pay cut or 2% increase in taxes or whatever it is while someone earning 50K is shaking their head thinking "give me 'only' 150K and I'd get by JUST FINE, thank you! Quityerbritchin!" Of course that 50K/yr person probably thinks they're hanging on by their fingernails while someone earning only 30K/yr is thinking "yeah, I can only DREAM of what life would be like on $50K/yr".
Again, the simple answer is - to save money, live your life with a "spending budget" somewhere less than what you're actually taking in. The secret is to optimize that spending budget to get the most out of it to fit YOUR personal desires and life goals/interests. Again, EVERYBODY has a "spending budget", it's just that for many people that budget is LARGER than the income they're taking in.
And last - yes, the choices get cr#ppier the smaller that spending budget gets. At fifteen hundred a month vs. twenty-five hundred, you're often choosing between living in a bad area and a really bad area, a tiny apartment or a really tiny apartment, a "beater" car vs. walking and taking the bus, a bean and rice heavy diet vs. occasionally eating chicken or (*gasp*) dining out at Olive Garden or whatever. By contrast, at 15 MILLION a month vs. 25 million, your personally owned tropical island may be smaller and less easily accessible than you'd prefer. We all have our crosses to bear.
Last edited by synchronicity; 10-27-2013 at 02:00 PM..
First remind me again are we talking about saving a percentgage of gross or net?
All of my previous info I gave you was based on my gross income.
As far as the rest goes. Everyone thinks they know what will make them happy. I would hope that at 53, you're actually better at predicting that than someone in their 20s. At 43, I know I am better at that now than I was when I was younger. That said, there's always room for improvement.
I will concede one point...Saving $500 more per month at 53 is going to have less of an impact than saving $500 more per month at 23 or 33. I am projecting retiring in 12 years at age 55 and saving an extra $500 per month at 9% would only buy me an extra year (two at the most).
That said, restaurant food tends to have too much sugar, salt, and fat in it....so there could be potential hidden health care costs.
She is right about that. I think her "If you can't afford to pay it off in 3 years" standard is reasonable. I prefer to pay cash myself...but for someone just starting out after school, etc, a 3 year loan would be reasonable. She's also right about keeping your car for 10 to 15 years.
If that car has issues or is stolen you will owe more money on it than the car may
Be worth.
My friend had an issue like that . The vehicle started having mechanical issues and reliability sucked.
He even bought an extended warranty but having a car that spent more time going up vertically on a lift than horizontally on the road became an issue.
There will always be exceptions to the rule. But I think a lot of these 0% deals are a scam...they just build the interest into a higher car price. Oh, I know...I'm sure you didn't fall for that...but all those other people out there do.
Suze Orman committed what I consider to be a bit of financial malpractice tonight. A woman was talking about a potential annuity with a guaranteed 5% rate of return per year, and Suze said "oh, that's probably only for one year. Nobody could guarantee 5% per year in this interest rate environment."
I have an annuity that guarantees 7% per year, so I know Suze is wrong about that. Putting that aside, it's wrong to jump to conclusions based on your own biases without truly knowing what is being offered.
Suze Orman committed what I consider to be a bit of financial malpractice tonight. A woman was talking about a potential annuity with a guaranteed 5% rate of return per year, and Suze said "oh, that's probably only for one year. Nobody could guarantee 5% per year in this interest rate environment."
I have an annuity that guarantees 7% per year, so I know Suze is wrong about that. Putting that aside, it's wrong to jump to conclusions based on your own biases without truly knowing what is being offered.
Is this a SPIA (Single premium immediate annuity) that you or Suze's caller was talking about, or a fixed annuity, or a variable or what? In the case of a SPIA, that 5% or 7% isn't really a "rate of return", it's a payout amount.
I'm amazed at how many ANNUITY SALESPEOPLE don't fully understand annuities, much less the general public.
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