How do you manage your money/budget structure

[therealdope]

you're shooting yourself in the foot if thats what you think.

interest rate on mortgage?
notary fees?
welcoming tax?
yearly taxes?
general house maintenance/repairs?
higher utility payments?

You're fighting a losing battle. The real estate and mortgage businesses have brainwashed people into believing that renting is flushing your money down the toilet and owning a house and building equity is a smart move.

 

[MSK1010]

I breifly go over what i have to pay for and when i realize i didnt make enough to pay childsupport, rent, utilities, food and gas. I pick one that i dont need, usually food and i go with the bare minimum for the week. lost over 70 pounds last year. Lots of pb&j's.

 

[Oblivian]

We track everything. I would highly advise you all do the same. You should run your personal expenses like a business and that involves more than just tracking expenses.

1. track expenses: know what you need, and what you spend
2. Budget: what you need to spend, and what you would like to spend
3. control: stick to the budget plan.

Sounds boring but it beats having financial trouble.

I'm glad I'm not the only one here. I felt like the only budgeting nerd.

 

[Neb]

You're fighting a losing battle. The real estate and mortgage businesses have brainwashed people into believing that renting is flushing your money down the toilet and owning a house and building equity is a smart move.

Its really market dependent, its easy to say people are brainwashed and acting biased, but why dont you break it down with numbers?

I dont know where TS lives, but where I live the house prices are going down, but the rental prices are staying up because lots of embassy personnel and expats live in my city.

 

[Blackdanger***]

I did the calculation already, its almost the same as renting where I live, you only mentioned the cons of buying, not the pros. I pay around 1300 USD rent a month, I can get quite a good mortgage with the same monthly fee (with all the extra costs included). When my situation changes, I will either sell the property or rent it.

I really don't want to start an arguement with you but i think the way you are viewing this will get you into deep shit. If you think you can just sell or rent out if you get into trouble, well by the time your option is to sell or rent, it will be because you are in deep trouble.

this is rough mathematics but if your mortage is 1300$/monthly, you will have taken out a 400k mortgage (1300 x12months x 25 years). You need at least 15k cashdown for any bank to take your seriously and give you this type of money. If you're lucky you get a 3% interest rate.

 

[Blackdanger***]

Its really market dependent, its easy to say people are brainwashed and acting biased, but why dont you break it down with numbers?

I dont know where TS lives, but where I live the house prices are going down, but the rental prices are staying up because lots of embassy personnel and expats live in my city.

I live in Montreal, one of the most expensive cities in the world.

 

[theocean]

i have a wife

 

[Oblivian]

Its really market dependent, its easy to say people are brainwashed and acting biased, but why dont you break it down with numbers?

I dont know where TS lives, but where I live the house prices are going down, but the rental prices are staying up because lots of embassy personnel and expats live in my city.

In my market, rental prices are significantly more expensive than mortgage payments. The landlord is paying A LOT more in property taxes due to lack of homestead exemption, the landlord is paying a higher interest rate on the mortgage, the landlord is also budgeting for lack of renter, repairs, etc. If I were to put my house on the rental market right now, it would be roughly 150% of the mortgage payment including escrows financed at 100%.

 

[aldeniro78]

I don't really keep a budget, but I do figure what bills I have coming up that week and other expenses, so I'll know what I'll have when I get paid again. Probably not the best system, but it's never failed me, believe it or not.

 

[Neb]

this is rough mathematics but if your mortage is 1300$/monthly, you will have taken out a 400k mortgage (1300 x12months x 25 years). You need at least 15k cashdown for any bank to take your seriously and give you this type of money. If you're lucky you get a 3% interest rate.

I dont want to argue either, but for 80k less you can buy the appartment here. Also in my country, depending on your income you can get a tax refund on the interest of the mortgage which is returned monthly. For example I have a 1000 $ mortgage and for 800 of that is interest. Lets say I pay 40% income tax. I get a refund of 320$ a month. This refund is valid for 30 years per person in his lifetime.

Edit: So I pay 1000, and at the end of the month I get returned 320, so in fact I only paid 680. The same appartment if I would rent it, would cost me almost double that.

 

[Blackdanger***]

^^^thats a pretty sweet deal, contigeant on the fact that your mortage rate and monthly payments stay the same for 30 years, which is highly unlikely. We saw what this type on constraint did to the US housing market in the mid 00s

 

[Bolshevik***]

try to spend less money during the month than i make in a month. the past month was, and the next month is going to be, tough.

 

[Neb]

^^^thats a pretty sweet deal, contigeant on the fact that your mortage rate and monthly payments stay the same for 30 years, which is highly unlikely. We saw what this type on constraint did to the US housing market in the mid 00s

It was a deal of the government to help people who buy their first house. There are plans to scrap it gradually as it costs the government quite a bit. Also there are people who dont use this deal for their first house, but later in their life. They buy a multi million dollar house, high mortgage on it and since their income tax is also high (50%) they get half of it returned

 

[DrBdan]

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.

 

[UA34]

I had my wake up call in college i over drafted the shit out of my checking account and my old man had to bail me out around $800. Luckily one of my good friends in college was a finance/accounting major and we sat down one day and he showed me how to have a budget.

pretty much said if you arent spending a big amount on one item (tv, engagement ring, washer, dryer fridge etc..) try and pay cash for it instead.

he also said if you are buying a big item on your cc to have enough cash on hand on the side to pay off at least 3-6 mo of it no problem.

When one goes out try and take cash only. only keep cc's for emergencies

try and set aside $20 or so bucks a week for savings, doesnt sound like much but it will add up eventually.

pretty much little things here and there.

 

[YPMG]

Nice thread TS.

When I first moved out of hm I was much like you, broke every week a day or 2 days before pay. Since then I too sat down to work out what I was spending and was blown away at the amount I spent on absolute crap (I.e. drinking, food, entertainment). Since then I put everything onto a spreadsheet - the money I need for my bills and mortgage I subtract from my pay the moment it's in so I have the sense that its all taken car of. I use a CC for all purchases such as food, petrol and entertainment and I zero it at the end of every month. I don't eat out and if I want something I save for a few weeks until I can get it.

To give you an indication of how well it's worked; I just bought a new car and have paid for a 5week vacation for myself and my girl to the States (she has saved her own spending money). It's great to sit here and not have to worry about bills when I get back or if ill have enough money to sustain our trip. Hell, I even came under budget by 3k with my spending money

 

[jrams]

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.

 

[WalkenWouldOwn]

Being buried in debt and bills is one of my biggest fears. I grew up with a mother incapable of managing her money who was ALWAYS broke even though she worked her ass off every day.

That said... I'm not a strict budgeter, I just try to be careful and have as little debt as possible. I just bought a house (yay for 2.5% interest rate fixed!) so I am definitely broke right now, but the lady of the house is a banker and knows how to manage money pretty well so I'll hand over my paychecks and trust her skills!

 

[wlu29]

You're fighting a losing battle. The real estate and mortgage businesses have brainwashed people into believing that renting is flushing your money down the toilet and owning a house and building equity is a smart move.

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.

 

[skarface]

I'm a dead beat loser that lives paycheck to paycheck