How do you manage your money/budget structure

If you make more than you spend (i.e. Don't buy a house that you can't afford the mortgage and monthly expenses) then building equity is absolutely a good thing.

Agreed, but US banks are giving 350k to young couples straight out of university with no savings and little to no credit background. They get sweet deals with fixed 5 years low interest rates and once the rates go up after 5 years, they were so tight in the beginning that they are no where near able to afford the new mortages. Banks come back into play, take the house leaving the poor young couple riddled with debt and back to renting an appartment.

My bank calls me once every 2 months telling me i'm such a good spender and they are willing to up my credit line higher and higher. My CC limit is 5000$ and last call the bank pushed for 25k. They keep giving people credit, leading irresponsible people into spending money that they don't have.
 
I've always been pretty good with my money. I take transit, bring my own lunch to school or work, only buy stuff on sale at the grocery store, buy in bulk, only spend money with cash and credit, never debit. Never buy video games.

The only stupid things I do with my money is gamble (When I have disposable income), or go out to restaurants with the girlfriend.

I have a very good chunk saved up as my rainy day fund, and don't drink near enough for it to be a real expense. Maybe a glass of wine per week.
 
in a sense household management is a taboo subject here in the US, but i think this is a great talk to have.

when i took over as CEO of the house, for the first two years i kept track of all income and expenses. i dont pay much attention to it these days because we save a decent amount every month.

one place we save tons in comparison to our friends is cars. the wife finds used rides for like 2-3k and we drive them. until i am going to blow 70g's or up on a car, i find it pointless to spend 30k (plus insurance) on a regular ride.

so - our car expenses are super low.

edit = bringing your lunch to work is a huge saver. i need to get back to that. im spending more than 100 a week just because i am too lazy to plan ahead.
ps - my car expenses would be high if i was single. since i am married, i dont care and we just save.
 
Agreed, but US banks are giving 350k to young couples straight out of university with no savings and little to no credit background. They get sweet deals with fixed 5 years low interest rates and once the rates go up after 5 years, they were so tight in the beginning that they are no where near able to afford the new mortages. Banks come back into play, take the house leaving the poor young couple riddled with debt and back to renting an appartment.

My bank calls me once every 2 months telling me i'm such a good spender and they are willing to up my credit line higher and higher. My CC limit is 5000$ and last call the bank pushed for 25k. They keep giving people credit, leading irresponsible people into spending money that they don't have.

Like i said if you cant afford it then you should not buy it. thetefore if you choose to ignore this concept then you are responsible for your own demise.

A good rule of thumb is to have a mortgage that is 3-4 times your household income.
 
Like i said if you cant afford it then you should not buy it. thetefore if you choose to ignore this concept then you are responsible for your own demise.

A good rule of thumb is to have a mortgage that is 3-4 times your household income.

Brokedown to a lower tier, its recommended to be able to pay your rent/mortage in one weeks pay.
 
Out of college each paycheck was 25% for spending, 25% for necessities and 50% for saving. Almost never spent all of the 25% and as I hit different benchmarks in my bank account ($5k, $10k, $50k, etc.) shifted the percentages around to more investing and less spending. Have never needed to itemize everything.

You just itemized you spending in the first sentence.

Smart ass northwestern grad.
 
I pretty much do all of the money management for me and my wife. I've figured out what our monthly expenses are (mortgage, insurance, utility bills, groceries, etc) and we both put a percentage of our paycheques into a joint account to make sure everything is covered. We also both make automatic payments to our retirement savings. I try to go through our spending at least a few times/year to make sure that it's still correct. I should probably do it more often but it works and I've got other things to do.

You should get her to do it too. It works better if she understands the "WHY" as well -- not just the "WHAT".
 
If you make more than you spend (i.e. Don't buy a house that you can't afford the mortgage and monthly expenses) then building equity is absolutely a good thing.

I don't agree. I own two houses (in two different cities), I've never had to make a mortgage payment in my life (or loan payment) and I would almost always advise people against buying a house.

the misdirection in the rent vs. own analysis is that you don't rent the same place as the house you would typically buy. My advise is ALWAYS the same, buy a house only if you really want to own a house.
 
Agreed, but US banks are giving 350k to young couples straight out of university with no savings and little to no credit background. They get sweet deals with fixed 5 years low interest rates and once the rates go up after 5 years, they were so tight in the beginning that they are no where near able to afford the new mortages. Banks come back into play, take the house leaving the poor young couple riddled with debt and back to renting an appartment.

My bank calls me once every 2 months telling me i'm such a good spender and they are willing to up my credit line higher and higher. My CC limit is 5000$ and last call the bank pushed for 25k. They keep giving people credit, leading irresponsible people into spending money that they don't have.

The problem in the above isn't homeownership, it's stupid consumers. Although adjustable rates aren't common anymore, it doesn't really matter. It utterly boggles my mind how many times people refinance. Right now, interest rates are extremely low. They are only bound to go up in the next few years. These people with interest rates around 4% will need to get their refi fix in. By that point, it will be up to 6% or whatever. It just amazes me how people can refinance ever 3 years when they have barely cut into the principal due to the amortization schedule starting with mainly interest.

I truly think there will be another mini bubble. I see a lot of young people buying their long term home since interest rates are so low. In their mind, interest rates are never going to be this low so they'll jump on what they can afford at < 4%. It's not really bad thinking, but it's only for disciplined consumers (which are rare). They don't realize there are higher expenses with more expensive houses, interest rates will rise so you shouldn't refi, you should be paying extra to principal, etc.
 
I don't agree. I own two houses (in two different cities), I've never had to make a mortgage payment in my life (or loan payment) and I would almost always advise people against buying a house.

the misdirection in the rent vs. own analysis is that you don't rent the same place as the house you would typically buy. My advise is ALWAYS the same, buy a house only if you really want to own a house.

Now you are simply being biased.
 
I don't agree. I own two houses (in two different cities), I've never had to make a mortgage payment in my life (or loan payment) and I would almost always advise people against buying a house.

the misdirection in the rent vs. own analysis is that you don't rent the same place as the house you would typically buy. My advise is ALWAYS the same, buy a house only if you really want to own a house.

It's a misdirection to compare apples to apples?
 
I haven't had money problems since I started my 2nd job when I was 19. It's been almost 10 years since then and I haven't been close to running my savings down since. I'm cheap and before I would make a purchase I would think "Do I really need this? Will the happiness I get from it outweigh the price?". If yes, then I'd go ahead and buy it and enjoy it. If not, I'd pass and just keep saving my money until something good really caught my eye. This allowed me to save up money and then I could waste it on food or entertainment from time to time without worrying for a second about my budget.

The single biggest thing people in their late teens and 20's waste their money on is a car payment. Society has tricked you into believing you're a piece of shit if you don't own a new ride. I bought an older car and did research online when it came to working on it. I did 95% of the repairs myself and saved thousands of dollars by not only maintaining my own cheap vehicle, but only paying for liability insurance as well. All my friends who bought their vehicles new are living at home with their parents or with multiple roommates. One friend had a new truck but after he wrecked it, he used the money to buy an older car and paid off his debt. He now owns a house. I drove my old car for years and saved up my money. I now own a house, an extra project car and I'll be buying another house in a few years.

I'm no financial expert but here is my advice. Never, ever spend money you don't have. Don't ever spend money you expect to have. If you don't need it, don't buy it. If you don't have money at the end of the month, start making cuts until you do. Make your small purchases with a credit card and pay them off at the end of each week to build credit. Quit acting like you can't live without your smart phone with unlimited everything. Either have internet on your phone or have it at home but you don't need both. If your cable bill is too high, start using the internet for TV. Sign up for cheaper gas, water and electric. Most companies have a program for this if you don't make much money. Eat lots of grilled chicken and frozen vegetables. Not only are they cheap, but they're good for you. Once you build up $2000 in savings, that is now your poverty line. Never dip below $2000, no matter what. Hopefully the things you've learned will keep your savings piling up while you're still able to go out and buy the things you want and do the things you want to do without worrying about whether or not you can afford it.
 
You can make savings here and there..

Dont leave electrical items on standby and dont leave unnecessary lights on. Slashes your electrical bill.
Most of your water bill comes from flushing the toilet. Maybe you can cut back on flushing it as much with a bit of bleach tossed in there .
Dont have the heating on as much to slash the gas bill.

I guess im partly lucky I live in an area with low living costs here in the UK .
 
I don't budget but I am aware of all my expenses. I spend around 50% of my takehome every month and never carry a credit card balance.
 
You can make savings here and there..

Dont leave electrical items on standby and dont leave unnecessary lights on. Slashes your electrical bill.
Most of your water bill comes from flushing the toilet. Maybe you can cut back on flushing it as much with a bit of bleach tossed in there .
Dont have the heating on as much to slash the gas bill.

I guess im partly lucky I live in an area with low living costs here in the UK .

Good tips. Here In Australia the Government is actually subsidising the instalment of units which turn off your appliances (TV etc) when you're not using them. I try not to turn anything on unless its necessary and go as long as I can before turning on the heater or air con.

Every little bit counts! Also, my girl is very good and very tight with money, it helps and rubs off on me.
 
i go to work she spends it, then i hope for the best
 
It's a misdirection to compare apples to apples?

In practice it's not comparing apples to apples. It's analogous to car leasing vs. purchase only far more distorted. People rent cars they can afford while they lease cars they could not afford to purchase.
 
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when I left home and bought my house I took my income and estimated all the
expenses... mortgage... property taxes, utilities and figured out a rough budget.
It was a little tight the first year but after that things got better.

I have avoided car debt which is a big thing and I am really good with taking care
of the needs over the wants.

I have too many friends who just cant do this and they are always at best living
pay cheque to pay cheque. I have one friend who has to declare bankruptcy then
after a few years his wife did too.

The bring your own lunches to work is a bit of a myth imo. I do not find it saves a huge
amount of money in my situation since I basically have to cook a bunch of lunches as
I dont do huge meals so I do not end up with left overs.
 
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