Money matters

In another forum I am active in one thread drifted badly from firearm spring life to money management and pawn shops and payday type loans. Well some of the participants did not seem to be able to convey their point without being insulting to those on the opposite side of the debate that broke out. So whomever chooses to respond here rest assured any post not worded as a Christian Teacher would speak an opinion will be deleted.

When it comes to finances of a household or homestead everyone does things a bit differently, and everyone has a different situation. For me I find that writing out 17 budgets is the only way I can keep things straight. The five are annual, quarterly, and monthly. The annual helps me place things like taxes and insurances in the monthly budget well ahead of the due date. Janurary and March are big bonus months, this is when the "emergency fund" gets replenished or bolstered depending on the year before. The second quarter of the year is when the garden is planted, so the first quarter when the garden expenses are budgeted.

One thing I stand firmly against is the use of credit cards. These feed the impulse buying, and the gotta have it now mentality. Some can resist temptation and pay the bill in full, avoiding interest charges. Dave Ramsey calls interest payments "stupid tax". I tend to agree. But what's worse than credit cards (higher interest, and harsher terms) are these "payday loan" places that promise quick cash, all you need is a job. Well they charge so much that once a person gets roped in, they can almost never get out of the pattern of use.

Being frugal means being smart with your money. Budget out a full month at a time. Stick to your plan. Buy smart. Start with necessities (cable and satalitte and restuarants are not necessities) food, shelter, utilities, transportation, and clothes, in about that order. Anything left over, on paper? Now look to outstanding loans, then lastly savings and luxury items.

Well that's my opinion, or advice if you prefer. Feel free to share yours, even differing opinions. But lets keep this on the level of hoping to teach those that may be struggling.
Thanks

I agree 100% about the credit cards. In fact, credit-other than a mortgage in general. My hubby makes really good money. We should have our own farm and have no debts. Instead, we're looking at about another 14 months or so to be out from under the majority of our debts.

Hubby would not let me handle the finances and would buy things w/out my knowledge-including a truck! Plus, he'd get a cash advance on one card to pay off another because of a lower interest charge. But, then he'd borrow more than was needed cuz he wanted to buy something. The majority of this was done w/out me knowing about it.

I would have preferred to pay off credit cards monthly, or else just carried a small balance for a few months to build up a good credit score. And for vehicles, I would have preferred to have enough money to buy what we needed, but get a loan just for 6 months or so for the same reason-and then pay it off.

While it's good to be able to pay cash for everything, in this day and age you do need to buy some stuff on credit. I know someone who has a very low credit rating because they always paid cash for everything. And when he did try to get a loan, he was turned down. This was in spite of the fact that he owned his home, cars and a good sum of money in the bank.

outside of a mortgage what would you NEED credit for? Dave Ramsey claims otherwise. (just for discussion) In theory you could save up and pay cash for vehicles even

Dizzy like many assume you need credit, you either need great credit or a score of Zero to get a loan or mortgage. If you have no payments I would think 500 a month would be a reasonable amount to be saving. That is $6,000 / year plus interest, over five years... 30,000 dollars ... Go pay cash for that car. I bet you can't let yourself spend more than half of it.

OK, let's say you want to make vacation reservations. Are they going to want to know how much money you have in the bank? No, they're going to want a credit card number. If you make an order either on line or by phone, again, you need a credit card number. And, if you have it tied to your bank account and someone gets a hold of it, they can wipe you out-unless you have a separate account for just that and don't have more in it than what you need at any one time.

You're in the mall shopping. Do you want to carry a lot of cash, or a credit card for in case someone steals your wallet? You can't cancel cash, but you can cancel a credit card.

Personally, I could not tell you when the last time was that I used a credit card. I've been using a Visa check card, but once we get bills paid off, I plan on using one and managing it properly. In other words, buy only what I can afford and pay off the balance each and every month. And, my hubby will NOT be allowed to put anything on it.

debit card, one tied to a secondary account that has only a limited amount of funds available, works for car rentals too.

12acrehome,
I agree with you as to no credit cards for most people. I have a credit card and use it to make many purchases and have never paid one penny interest. I have it through Cabela's and I do get a build up of points and am able to use them like cash which I do as they are available. But this takes some discipline to not spend money you do not have so that you can pay off the balance every month.

I agree that paying cash for an automobile is the best way to go. I believe gives you more leverage when you go to buy. And it saves you plenty of money in interest. Most people don't need new autos and can get along fine with a good used one. Remember when purchasing an automobile that its job is to get you from point A to point B. Who cares that it is not a top of the line and has all the bells and whistles. Drive it till it totally dies. It is worth it not having a payment to deal with.

I am allergic to payments and I won't put up with them!

That's my two cents worth.

We don't like credit cards either but did run into a few times that we had to have them like reservations, etc. We got a visa money card from Wal-Mart and granted it does cost $3.00 each load we put on it but we budget exactly what to put on it to pay those bills that require the card. We also use it for gas now that we get a discount for using it at the Wal-Mart gas pumps. We budget our gas strictly as we drive a lot of miles daily. Like 12acrehome said we budget it monthly so one time a month it costs us the $3.00. It helps out and we still save a little.

I also want to point out that many years ago when we first were married we did the credit card thing and it took years to get out of that mess. We got a little inheritance money from my grandmother and used it to pay off any remaining debt. We will never go there again.