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Thread: OT managing personal finances

  1. #1
    Join Date
    Feb 2009
    Location
    Bedminster NJ
    Posts
    200

    Default OT managing personal finances

    In 2004 I bought my first house with a 0 down, 30 yr VA loan. 10 years later, having about 20% equity, I refinanced it with a conventional 15 yr loan. A local credit union charged me $100 for the refinancing. My payments stayed almost exactly the same but I only had 15 years of payments to go instead of 20. I knocked off 5 years of payments for $100. Since that original (VA) loan was paid off by the new conventional loan, that restored my VA loan eligibility and allowed me to buy another house for 0 down. I rent out the first house and it's been paying for itself for a few years. I have been fortunate to have good tenants.

    The above is just an example of choices that make a big difference regarding personal financial well being. I have a long way to go to reach my goal of being debt free and comfortable with my finances. I'd like to hear from others of you who have made choices regarding personal finances that turned out well. Please keep your advise and experiences in laymen's terms- I have dirt under my finger nails. The following are examples of what I'm asking for:

    1) I am trying to finagle it so the wife and I only need one car. I believe eliminating a second car will be life-altering.
    2) I've been trying to implement a cash-based budget. Something similar to Dave Ramsey's program, only without the bible.

    Those are examples of what I'm asking for.

    Thank you in advance,
    Roland
    -Roland
    Golf Course Mechanic

    Bedminster NJ

  2. #2
    Join Date
    Jun 2009
    Location
    san jose, ca. usa
    Posts
    811

    Default

    I ride a bike to work, saves gas. I rent cars for long trips. I still have a truck.

  3. #3
    Join Date
    Dec 2004
    Location
    East Coast, USA
    Posts
    7,473

    Default

    Always maximize your principle payments. If your mortgage is $1000, but you can afford $1500, then pay an additional $500 towards the principle every month. Don't put that $500 in the bank. It's earning a lot more in reduced interest charges on your loan.
    Work hard play hard

  4. #4
    Join Date
    Dec 2004
    Location
    East Coast, USA
    Posts
    7,473

    Default

    If your company offers you a 401K, always take full advantage of it including the maximum matching.
    Work hard play hard

  5. #5
    Join Date
    Dec 2004
    Location
    East Coast, USA
    Posts
    7,473

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    If you can, always max out your 401K up to the current IRS yearly limits ($19K/year for 2019). Also max out the IRA limit ($6k/year for 2019). When you retire and you're no longer in the highest bracket, you can withdraw the money from lower brackets if you choose to limit the amount you pull.
    Work hard play hard

  6. #6
    Join Date
    Oct 2013
    Location
    USA MD 21030
    Posts
    4,813

    Default

    Just a few ways I have saved money over the years:

    1. Except for my first motor vehicle (Honda CA160) I have always bought used (some really rough and cheap), and did most repairs myself.

    2. Got an apartment when I first moved out on my own, about $140/mo, Every year it went up, $150, $160, $170. But then in 1977 I bought a duplex house on 1 acre for $17,500, owner financed mortgage $158/mo, and I had tenants who paid $25/wk and mowed the grass. Bought adjacent 1 acre in 1982 for $12,500, and in 1989 I bought my neighbor's house on 1/2 acre for $35,000. Combined properties now worth probably $400,000 or so.

    3. I installed a wood stove and have heated with wood (mostly), along with kerosene space heaters.

    4. I've never carried much credit card debt, almost always paying balances in full.

    5. I've been self-employed since 1989, and was able to purchase tools, machines, instruments, and electronic parts as business expense.

    6. Most of my vehicles have been fuel efficient, and I've usually never had long commutes.

    7. I've made regular contributions to IRAs and SSA, so now I can get by on income from those sources.

    8. Never married, and no children. I've spent some money on girlfriends, though, but not all that much.

    9. Always lived frugally, shopping sales, flea markets, second hand stores, Craig's list, etc.. My mother remarked that I would wear off a dollar's worth of shoe leather to save 50 cents.
    Last edited by PStechPaul; 01-07-2019 at 05:16 PM. Reason: typos

  7. #7
    Join Date
    Aug 2018
    Location
    Tai Tokerau - NZ
    Posts
    143

    Default

    Spend less than you have. Pretty simple.

    The repayents are 0. The interest is 0. The banks / moneyprinters don't benefit much by it.

  8. #8
    Join Date
    Dec 2004
    Location
    East Coast, USA
    Posts
    7,473

    Default

    Also, if your over 50, take full advantage of the additional "catch-up" contributions allowed to your 401K. That's an additional $6K in 2018 so in 2019 the total for 401K if your over 50 is $25K. Take full advantage of it.
    Work hard play hard

  9. #9
    Join Date
    Jun 2001
    Location
    North Central Texas
    Posts
    2,470

    Default

    A few off the top of my head:
    #1 - Don't waste money (or anything else). The easiest money to 'make' is the money you don't piss away.
    Live within/below your means. You don't actually HAVE to have the latest and greatest of most anything.
    Don't use credit/never pay interest (except on a house). Pay cash, and don't buy it until you can (certain emergencies aside).
    Look at your monthly bills. Things that you pay for regularly eat up your income more than many people realize.
    Pay attention to the small purchases (track ALL expenditures) - the little stuff can really add up.
    Take care of your stuff. Maintain it, don't abuse/break it, don't let it get stolen, etc.
    Be organized. Look ahead and stop problems before they become more expensive.
    ALWAYS keep a financial cushion.
    Pay attention, compromise, be aware, and think - always!
    As mentioned, buy high initial loss items used and always maximize any matching funding.

    I have a book started on this very subject and have been 100% debt free for quite awhile (and have more nice stuff than people who make 10x what I did).
    Last edited by Joel; 01-07-2019 at 05:32 PM.

  10. #10
    Join Date
    Jan 2002
    Location
    Huntsville Ala
    Posts
    5,563

    Default

    One of the book list best sellers about 15 or 20 years ago was "The Millionaire Next door!" I haven't read it in a long time, but I happened across it the other day. Don't recall much of the specifics, but it was chock full of strategies for financial independence for us minions. Much of it involved living within your means and realizing that saving pennies adds up to dollars. ..."get rich slowly!"

    This is the one area that our educational system is woefully lacking. That really hit me years ago when a coworker who was about 25 years younger than I (probably in his mid 40s then) explained his situation. We worked in a large IT department, and while he was a plain ol' country boy (some would say 'redneck') but he was sharp and down to earth.

    He said that all of his buddies, after finishing school and getting jobs all saved just enough to buy new cars and make the payments.. But he just bought an old clunker and saved enough to make a down payment on some land, about 80 acres of pasture and woodland. By the time of this discussion he owned the land, along with 20 or 30 head of cattle.

    That was one of his frequent topics for discussion: Our education systems prepares people for a career, but does nothing to train them for further growing the fruits of their success. Eventually most of us tumble to the idea of investing, but wouldn't it be nice "if we knew back then what we know now?"
    Last edited by lynnl; 01-07-2019 at 05:55 PM.

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