Money Discussion

[SoCalZX2]

Here Vit and anyone else... This is where you can discuss this with me. If you actually care to.

I'm the crazy fool here that believes you don't NEED debt to create wealth or succeed financially. I'm the guy that won't ever have a car payment again. Or CC's or Loans for anything... (again, except a house)

Yes, there are some FANTASTIC ways that you CAN make things behave (like CC). The problem with that, is without proper planning to do so (I.E. a decent amount '3-6 months expenses') in savings, there WILL be more risk of falling behind and becoming trapped in CC companies games.

Jon will come in here and provide numbers for the other side of the coin, and I don't doubt his work, or his plan for his money. He's well educated. The fact remains that Jon is in the minority when it comes to handeling money.

70% of americans are living paycheck to paycheck and are in over their head in debt. Whether it be CC or cars or whatever. Most people can't live within their means. So getting things like CC's to behave for you isn't a good point when MOST that have them can't use them properly.

Also, car payments... The average car payment in america is 464$/mo. If you were to make 80-100k/yr 464/mo isn't a big deal. Problem is, the AVERAGE american make 40k/yr... so 464/mo out of about 2k take home is a BIG DEAL. Especially when you consider Rent, Food, Gas, Insurance and other bills.

So yell at me all you want... call me stupid, call me crazy. I don't care. This is my way of looking at things. I'm not cramming it down anyones throat, I never have. I've never thought I'm better then anyone for my view of money, and I've never made any blanket statements that if you have a car payment then you're crazy or stupid. I've simply tried to show a different point of view.

[SoCalZX2]

You obviously care enough vit... I mean you followed the link... read my post and then went back to the other post to try and make a point ;)

I never said you were either american or average. You two are in the minority then if you actualy have your money under control. A lot of people who make a lot of money are just "broke at a higher level"... Making 2k a paycheck or more is no better then making 1k a month if you don't control your money.

[xtremecaraudio]

I personally commend you for having the will power to live that way. I do use a credit card once in awhile for larger purchases, but generally it is just to build my credit so I can buy a house someday and quit renting. I couldn't imagine saving enough money to buy a house outright though, if you need a larger house (or a house for that matter) it would be nearly impossible to save the amount of money to buy it when you actually need it. By the time you spend 20 or 30 years saving the money for it your kids are gone and you don't need it anymore. For some things it seems logical to pay up front and for others it's nice to spread it out a bit and pay over time. People just need to learn to handle their money and they would be fine with credit and it can be very helpful, but people can be very impulsive as well. Crap, I'm rambling and probably not making any sense so I'm done, take what you will from what I said. Just my humble opinion.

[SoCalZX2]

I agree. A home will be the only thing that I'd be buying on "credit". My wife and I both have 750+ scores and will for at least another 2-3 years based on how FICO is calculated. So when we have our down payment it won't be a big deal to get a decent home mortgage.

It shouldn't take 20-30 years to save up... Although I guess that depends on personal income / housing costs in your area.

[CraZx2ing]

Excuse the randomness, my mind is all over right now...

i'm 23, and started out at 18 using credit cards w/ 0% to buy things and pay off before the 6 months was up. Eventually, it caught up with me and i couldn't keep transferring around. Then I used credit to pay for some additional expenses for my wedding.

Since 16 i have had a car payment and the past 2 have been in the $550/mo range.

My wife is viet and was raised to work hard and buy everything in cash. Our goal now is to spend the next year or so busting butt to pay off the last 2 years of my jeep and all of my credit debt. Once that is done it will all be about cash. I already own my home and only owe about $85k on it. We are going to try and pay it off ASAP since it is a small amount.

After playing around with debt thinking i could handle it and now need to get it all paid i couldn't agree more with the OP. The debt isn't worth it.

Set a goal to save and buy something while letting your money work for you (savings, money market, etc) that a way you can dream about the item you want to purchase and will be happy and feel rewarded instead of worrying "oh man, i only worked 25 hours this week, how will i pay this bill and that bill"

I'm currently making very, very good money for my age/education level (HS). I can not think of a friend that is within $15,000 of me, even the ones with degrees. Yet, at the end of the day, i have as much in the bank as my friends that barely take home 200/wk. That is all starting to change now that i've reassessed my spending, saving, and debt habits.

[ZX2guy19]

I think the biggest problem with your view of debt is that you are classifying debt owed on a house or a car the same as debt owed to a retail store, such as Target, Best Buy, or Kohls. Cars and houses are a necessity (go ahead and say a car isn't one, then try without it for a week) where as the other's are luxuries.

[scortched]

but at the same time a $20-$30k car is not a necessity, and many people do fine without cars where mass transportation is readily available. that's what living within your means is all about.

[CJW]

I live on about 40% of my paycheck week to week. The rest goes into my house fund.

I use my credit card for everything I am going to buy because I will pay it off at the end of the month and not be charged anything for it and am given incentives for doing this. Such as cash back and rewards at the disney store(I have a mickey mouse card OH YEAH)

I don't get cash back or rewards for handing people cash or using my debit card.

Unlike the masses of people who can't control themselves with plastic...I can. Because of this, it is a smart move for me to use it.

[scortched]

Well there you go. It's about responsibility. I know that I won't be responsible so I stay away from the plastic. I just need to find a way to get rewards at the Disney store too.

[SoCalZX2]

Unlike the masses of people who can't control themselves with plastic...I can. Because of this, it is a smart move for me to use it.

This was the whole basis of my first post. Good for you dubbs.


ZX2guy19 - Debt is Debt... However, if you read carefully, I will be going into debt for a home. I live in san diego and even without debt it would take far too long to save up and pay for a home in cash here.

The difference between a home and a car... Homes generally go UP in value while cars ALWAYS go down (unless a rare classic or something of that nature).

While a car is a need, (although there is mass transit, but I've always owned a car...) it's already been pointed out that a 20k or 30k car is a luxury, not a need.

So please, actually look at what is a NEED in life and what is a WANT in life. You don't NEED a new car... or a 4000sqft home. Those are wants. But you do NEED reliable transportation and a roof over your head.

[ZX2guy19]

I actually had a whole explanation for that, but I hit the back button on my mouse when I went to hit post and it was lost and I don't feel like typing it again.

And don't start getting butt hurt by this thread. You made it to discuss money and that is what I did. Quit crying.

[SoCalZX2]

I actually had a whole explanation for that, but I hit the back button on my mouse when I went to hit post and it was lost and I don't feel like typing it again.

And don't start getting butt hurt by this thread. You made it to discuss money and that is what I did. Quit crying.

LOL what? How am I getting but hurt? You made a post and I responded? What the heck? Please, explain to me how I was getting butt hurt or crying... Geeze.

[SeRiousZX2]

How is your credit score so high without established credit?

[JonsZX2SR]

Actually, I am somewhat aligned with what you (SoCalZX2) present.

You don't need debt to succeed financially, in fact, you should avoid 'debt' in the traditional sense. But don't confuse 'debt' and taking a loan that makes financial sense.

Note that you can borrow money and still have a 'balanced' budget. As long as the payments to service and pay off the debt over the planned period are included in the balanced budget.

However, if you have an opportunity to borrow money under terms where you can make money AND you are comfortably able to pay off the loan it may be wise to borrow money. Examples are a company that has a quality product with expected demand well in excess of capacity. The company would be foolish to limit expansion as long as the loan terms are reasonable. Another example is a good student who is studying in a lucrative field. If they can get an interest deferred student loan, they should do so (but avoid spending the loan on non-school items, no car, no vacations, etc.)

...on the other hand, the basis to wealth is deferred spending which results in capital growth and formation. In simple terms, I'm talking about saving and investing. Part of the discipline is to defer or avoid spending to divert money into savings. 20% of annual take home income is a good target.

Can you make the car last 2 years longer, can you put off buying items for an extra 2 or 3 months, do you really need that newest video game controller ?? Can you do the work yourself and take a local vacation ?? It helps if you have a like-minded partner. It hurts if the partner is a 'spender'.

The trick is to start early, recognize the invested money is not available for spending (but investment income might be) and choose to put off spending to maximize savings. Most important, if you choose to be in a long term relationship, choose someone with the same goals.

[SoCalZX2]

How is your credit score so high without established credit?

Our scores are high becuase this is a relatively (within the last 14mo) process for my wife and I. We still have 17k to pay off, but no longer have any CC debt. Just the Z, the escape and a sig loan.

[SoCalZX2]

Actually, I am somewhat aligned with what you (SoCalZX2) present.

You don't need debt to succeed financially, in fact, you should avoid 'debt' in the traditional sense. But don't confuse 'debt' and taking a loan that makes financial sense.

Note that you can borrow money and still have a 'balanced' budget. As long as the payments to service and pay off the debt over the planned period are included in the balanced budget.

However, if you have an opportunity to borrow money under terms where you can make money AND you are comfortably able to pay off the loan it may be wise to borrow money. Examples are a company that has a quality product with expected demand well in excess of capacity. The company would be foolish to limit expansion as long as the loan terms are reasonable. Another example is a good student who is studying in a lucrative field. If they can get an interest deferred stiudent loan, they should do so (but avoid spending the loan on non-school items, no car, no vacations, etc.)

...on the other hand, the basis to wealth is deferred spending which results in capital growth and formation. In simple terms, I'm talking about saving and investing. Part of the discipline is to defer or avoid spending to divert money into savings. 20% of annual take home income is a good target.

Can you make the car last 2 years longer, can you put off buying items for an extra 2 or 3 months, do you really need that newest video game controller ?? Can you do the work yourself and take a local vacation ?? It helps if you have a like-minded partner. It hurts if the partner is a 'spender'.

The trick is to start early, recognize the invested money is not available for spending (but investment income might be) and choose to put off spending to maximize savings. Most important, if you choose to be in a long term relationship, choose someone with the same goals.

The voice of reason who has always had good points to agree with and also point in another direction the ideas stated in my OP. I knew Jon would be in here, and I welcome his opinion as it's almost always free of negative comments, but provides an alternative thought.

[SeRiousZX2]

I see.

[SoCalZX2]

TBH my wife and I were part of the "average" equation. We had poor spending habits, little to no savings...

With a child on the way (now born and 3mo old), we came to realize (with the help of some family and good reading / audio material) that living that way has ZERO long term benefits. So we've made changes and haven't used a CC literally in over a year. We still use debit of course, but haven't used CC. Mostly we pay for everything online or in cash and just live within our pay.

Knowing what we know now, we could EASILY live correctly with CC, but we just choose not to. I'm pretty sure we may get another down the line for things like Hotels / Car rental... Which CAN be done with a debit card, but in all honesty, it's not easy and can be very frustrating.

[SeRiousZX2]

I don't believe in CCs either. The only thing I use is a debit card with a Visa logo.

[SoCalZX2]

Same here. We actually have a Debit Mastercard via ING. Great savings accounts for short term savings. With the electric orange checking, access is instant. So we'll be putting our "emergency fund" there. We also have other savings funds for things like car maint / repair, vacation, large item purchse and for my '66 mustang resto fund lol.

[CraZx2ing]

TBH my wife and I were part of the "average" equation. We had poor spending habits, little to no savings...

With a child on the way (now born and 3mo old), we came to realize (with the help of some family and good reading / audio material) that living that way has ZERO long term benefits. So we've made changes and haven't used a CC literally in over a year. We still use debit of course, but haven't used CC. Mostly we pay for everything online or in cash and just live within our pay.

Knowing what we know now, we could EASILY live correctly with CC, but we just choose not to. I'm pretty sure we may get another down the line for things like Hotels / Car rental... Which CAN be done with a debit card, but in all honesty, it's not easy and can be very frustrating.

Exactly how I feel. It took my wife to help me realize it. The little changes we've already started making are already making an impact on our budget. Its nice to have money left over at the end of the month.

[JonsZX2SR]

I started "investing" around age 19. I had about $150 for beer money while an undergrad in college and decided I wanted to double my money (to double my beer consumption.) So I looked around for money making schemes and determined a lot of friends just were not handy with cars, electronics, etc.

I invested in a decent starter toolkit and offered services. At first a lot of friends figured I should work for free. Lesson #1, if you value your skills never work for free, even for family. You can exchange help, but if the friends or family don't come through you have to draw the line.

Pretty soon two other handy friends decided to join me and we had a small business doing electronics, cabinetry, car repair, welding, etc. We were able to store tools equipemnt in the basement of the frat house where I lived in exchange for basic services.

Instead of doubling my money I made more than $2500 each of the last two years of college which is worth about $12K-$14K today. The friends also did well.

I bought more tools and invested some of that money. The first $100 is probably kicking around in some account. I got the start of a great set of tools and of course I spent some $$ on beer. I also spent some of the $$ on dinners, dates, movies, etc. which got me a lot more nookie than if I was a lazy, drunk college student.

The reason I'm repeating thsi story, is whenever I wanted some kind of big ticket item I always seem to create some sort of 2nd job and use the cash to buy something I want or for investing. My audio business helped me survive a nasty divorce during grad school.

My suggestion to anyone who has ambition is to put together a business plan to make extra money outside of your regular job and use that money instead of credit cards to fund your lifestyle.

Most people have talent and ambition, but few put it to good use.

[SMusser]

I am 20 years old and got myself into debt when I got my first credit card at the age of 18. I still am paying off that debt today, but I'm sure glad I learned my lesson with a CC with a max of $2,000 at an early age haha. I still need some financial guidance as far as paying off the rest of my debt, so if anyone wants to help, let me know!

[freaktractor]

i myself have fallen prey to overspending and CC debt.
it will be 3.5 more years till i have re-established any line of credit and im ok with that.it has taught me to spend within my means. a hard lesson to learn that i hope no one else here has to.

funny,before i had a CC i used cash and did just fine.then it was like WOW! look at all the neat things i can get! now i just wished i had used it on my z cuz if i had,i would have one sweet ride...!

[JonsZX2SR]

That's exactly why credit card companies offer credit cards to young people who have no credit rating. To get them used to living beyond their means. People get used to this, their friends all do it and everyone assumes it is normal behavior.

When a credit counselor tells them to put some money in savings and learn to live on the rest it is as if the counselor is speaking a foreign language.

One of the best things a person can do before completing one year at their first full time 'career' job is to learn to live completely on cash and savings. This does allow for a car loan that is paid as part of normal cash flow. But no credit cards, no impulse buying, no figuring how to pay off an ever increasing balance at the end of each money.

If you don't have the money, you don't buy the item. Pure and simple. The first thing people learn to do is to plan and save for thr big ticket items. Once they do that, they learn to quickly manage cash flow.

Unfortunately, the lessons that most young people learn are the wrong ones, and getting out of debt is the first right lesson.

Too many people never learn, which is why there is a rash of bancruptcies from people in ages ranging from 19 to 70.

I'm glad more than a few of you are sharing experiences...

[random_hero]

Discuss Money?

I like it....alot.

Seriously though, I have no credit cards, just a checking account with all my hard earned dollars. I'm trying to get a CC just to buy gas on/pay off at the end of the month to hopefully establish some credit - but it's turning out not to be that easy.

[SoCalZX2]

That's exactly why credit card companies offer credit cards to young people who have no credit rating. To get them used to living beyond their means. People get used to this, their friends all do it and everyone assumes it is normal behavior.

When a credit counselor tells them to put some money in savings and learn to live on the rest it is as if the counselor is speaking a foreign language.

One of the best things a person can do before completing one year at their first full time 'career' job is to learn to live completely on cash and savings. This does allow for a car loan that is paid as part of normal cash flow. But no credit cards, no impulse buying, no figuring how to pay off an ever increasing balance at the end of each money.

If you don't have the money, you don't buy the item. Pure and simple. The first thing people learn to do is to plan and save for thr big ticket items. Once they do that, they learn to quickly manage cash flow.

Unfortunately, the lessons that most young people learn are the wrong ones, and getting out of debt is the first right lesson.

Unfortunately, too many people never learn, which is why there is a rash of bancruptcies from people in ages ranging form 19-70.

I'm glad more than afew of you are sharing experiences...

Couldn't agree more :)

LOL Random, we all <3 money :D

[ChillinZX]

Problem = American's making alot of money and paying a lot of tax (sometimes stressful jobs)
Solution = American's making less money and living off rich american's tax money (stress-free jobs)

I'll take a stress-free job any day of the week as long as it pays bills.

That's what I do. Pays all hospital bills, baby births, formula, gives parents free cheese, milk, eggs, bread, and juice, government can also supply supplemental income for housing expenses. Take advantage of it, it's not only to african-americans and mexicans (the majority of people taking advantage of it) it also applies to whites. You couldn't even tell we are living off the state and government just by looking at us and our life. As long as you make under $25,000 a year the state will give you money for food and housing, which can equal a $40,000 a year job.

I used to hate the people that eat up my tax dollars, but now that I understand it, I can use it to my benefit. I do not like scumbags with no life and ppl that use drugs take my tax dollars, but for families that do need it I understand why they go to the state wanting help.

I don't have any credit card debt anymore, just a car payment and mortgage. You make more money not having a credit card, if you want something thats 2G's, saving 2G's will be quicker then paying off 2G's.

[PHeller]

How does one accumlate credit for a house at an early age?

They tell us real estate is the best form of investment, yet its also the most expensive. Many say that having a CC makes it easier to gain credit for buying a house later on.

At 23 I'm in debt all of $6,000 for school loans, but I've had no car loans, no Credit Cards, and no other way of gaining credit.

I worry that someday I'll want to buy a house and not be able to get a loan because I've avoided Credit Cards.

[SoCalZX2]

No, it'll just be more difficult. If you want to go the easy route you could get CC and not buy for several more years as you build a good score. Or if you have a good savings, and down payment, you can find a company that still does Maunal Underwriting. You'll be able to get a good mortgage as long as you've "lived right" I.E. no late payments on stuff like Rent for at least 2 years.

It's a longer process because the company actually has to look at how you've lived, not just a number. It's possible to get a home mortgage without a FICO score and not get into the subprime area.

[ChillinZX]

A 50% down payment on a house any bank will accept you. I have 700 score and have rented for 3 years and had 10 cars financed and paid off, 6 credit cards paid off. I only have one now which has a 7000 limit but a 0 balance.

[CraZx2ing]

One of the best things a person can do before completing one year at their first full time 'career' job is to learn to live completely on cash and savings. This does allow for a car loan that is paid as part of normal cash flow. But no credit cards, no impulse buying, no figuring how to pay off an ever increasing balance at the end of each money.
I've just completed a year of this. Its amazingly hard and sucks bad when you see all your friends blowing money. The good news is, I'm turning a corner now and I am starting to see some extra cash. Now my wife is training me to use the extra cash to pay stuff off so we can have most of our income not going to credit peeps. I want to say i currently owe about $85k on a mortgage, $15k on a car, and about $6k on credit. I'm 23 turning 24. I hope to have the credit and car paid off within the next year, and will just stick with the mortgage and saving my money for any more purchases.

I used to hate the people that eat up my tax dollars, but now that I understand it, I can use it to my benefit. I do not like scumbags with no life and ppl that use drugs take my tax dollars, but for families that do need it I understand why they go to the state wanting help.
The state saved my family a long time ago. My mother was a housewife and my dad the bread winner. Then my dad got seriously injured and could no longer persue the career he was in. My family was able to stay on its feet while my mom was working a part timer. After a couple years she opened her own business and ended up breaking 6 figures with in 10 years.

I worry that someday I'll want to buy a house and not be able to get a loan because I've avoided Credit Cards.
I gained most of my credit by being a cosigner on my moms CC accounts, then I took out a couple of hefty loans for cars and paid them back. I *should* be sitting right around 700. My last score was in the 680s i believe. Not that it has anything to do with your situation.

[JonsZX2SR]

Two comments:

Its amazingly hard and sucks bad when you see all your friends blowing money. The good news is, I'm turning a corner now and I am starting to see some extra cash.

1. Once you learn they are buying themself in debt and you will be much better off it the future. it sucks to be them, not you. Discipline is often hard to learn, but once you have it, make it work for you.

2. When you learn to use discipline, you can then get one or two credit cards, use them to buy things you can already afford and pay off the credit cards. In this way you can build credit before buying a house.

If you apply for a mortgage with a 20% downpayment and a solid credit history of paying on your credit cards with no balance you will be a much better borrower than someone with a lon g credit card history who is carrying credit card balance and who has 0-5% downpayment.