If you've gone from financial survival to prosperity...

[Amy Jo]

what habits/thought patterns did you change?

 

We are trying to make this shift, and I know we need to change our habits & ways of dealing with money. We've also been without for so long that we are buying with an 'if I don't get it now I never will' type mentality.

 

Any other tips (besides make more and/or spend less) are appreciated.

[OrganicAnn]

I haven't gone from poverty to prosperity. I have always been financial stable. It is really simple - don't buy it if you don't have the money to pay for it now. That goes for everything except houses (which usually need to be financed). You are not entitled to anything unless you can afford it. "If I don't get it now" will not serve you well. People how finance what they think they need now end up paying significantly more for everything (just calculate what you pay in interest expense on a credit card and it will make you ill). Don't feel you have to have X because everyone else does. Really you don't have to have cable, internet, cellphones, vacations, gym memberships, the latest styles, etc.

 

It may not help you now, but get a good education and get a good job/career/business so that you have a good income was advice my parents always gave. There are two parts to the equation - the income and the expenses. If you cut the expenses and can't make it, then you need to increase the income (extra jobs, selling assets etc).

 

Dave Ramsey and the other financial gurus have more detailed advise. If you can't do it on your own, follow one of their plans.

[Anne Rittenhouse]

The first step is to write down everything you spend. Everything! Write down the mortgage, the car payment, the utilities, the grocery reciept, the starbucks coffee, the manicure, the impulse buy at TJ Max, the parking lot fee, the kid's allowance, the paypal purchase at amazon....every SINGLE penny.

Write it down for three months. (or use some finacial software to the track expenses.)

 

After three months, look at where your money is going. Make some informed decisions about your particular habits. Choose one where you are going to make a change. ONLY one, too many changes too fast will make the new habits seem "too hard" or "too restrictive".

 

Keep writing down expenses, next month look again at the data and continue working on your first change. Can you make another?

 

Now that you've started to think about your outgoing. Think about your incoming. Can you change that? Think about your savings goals? Start with a three month emergency fund. Save until you have complete three month saving account. Delay purchases, make lists for "needs", plan to shop rarely, look at the list well before you go and seperate the needs from the wants. (example, my son wants new headphones, he needs new trainers.)

 

There are lots of free sites that can help. Don't spend any money on this. (this said, however, the money we spend on our finacial software, has paid for itself over and over again.)

 

Going from finacial disaster to prosperity is a process. Start small and build one small succes on top of the other.

 

Finally, pat yourself on the back for simply asking the question. Recognizing the problem is the biggest step, the rest will be tough, but not undoable.

[mathwonk]

I borrowed money and earned my PhD and became a professor and then my wife went to med school we borrowed more money, and then she became a physician. Until a little while ago, we had negative net worth, but finally with two incomes, after a while we entered the plus column. Finally in my sixties I was able to buy a new car, on time of course.

 

We are not especially frugal. We have always believed in spending money on education. People who do not pay so much tuition seem to have more in the bank. (I have come to believe my sioux name would be "pays tuition".)

Edited August 6, 2012 by mathwonk

[SKL]

The first step is to write down everything you spend. Everything! Write down the mortgage, the car payment, the utilities, the grocery reciept, the starbucks coffee, the manicure, the impulse buy at TJ Max, the parking lot fee, the kid's allowance, the paypal purchase at amazon....every SINGLE penny.

 

:iagree:This is how I got started. I also had a detailed spreadsheet of my bills, including their interest rates etc. (I had a lot of student loans.) Once I listed everything out in spreadsheet form and observed the existing trend, I expanded it out into a bare-bones budget and tracked my adherence to that budget, to the penny.

 

Keeping aware of day-to-day financial choices (especially the little ones that are easy to change) motivated me to come up with ideas to stretch pennies and cut out non-essentials.

 

Some easy changes that made a worthwhile difference were:

 

• Review W-4 and reduce tax withholding to the least allowed without paying a tax penalty. Use the difference to pay down the debt with the highest interest.

• Observe and revise electricity usage habits at home. I was able to cut our energy bills by 50%.

• Review phone/cable/internet usage, fees, options. Don't pay for anything you don't need.

• Review car insurance and eliminate anything that isn't really needed. For example, do you really need comprehensive/collision insurance if your car's bluebook value is $1,000? Check geico.com to see if they have a better rate than you're paying now. (But don't switch until you check the penalty policy for your current carrier.)

• Don't keep a cash balance where there isn't at least about 1% interest being earned. Keep the minimum balance (for no fees) in your checking account and open an account with ING (all online). You can move cash with a few days lead time and make a few bucks of interest.

• Get/use a credit card that has no regular fees but provides "cash back." Use the "cash back" for Christmas gifts or to pay down the balance. As far as possible, pay off the balance every month and never make a late payment.

• Pay bills online to save the cost of checks. Bank online and do whatever else you can do to save bank fees.

• Drive at 55mph or as close to it as possible. Can save a ton of gas.

• Use the cash you save to pay down the debt that has the highest interest.

 

[Carrie12345]

I wouldn't call us "prosperous" today, but I no longer dig for change in the couch! ;)

When we got married, dh took an hourly wage job that had nothing to do with his degree in order to pay the bills. I sometimes worked various jobs. He climbed the ladder, and I began to sah. He's more than quadrupled our income (well above where his degree would have taken him.) Of course, we have 4 more kids than we did back then, a second car (that actually has reverse, unlike my "emergency vehicle" from back then), 4 pets, and a house. So it's not like our expenses are the same, especially with the increase in gas and food prices.

 

We are gearing up to risk all that security with our own business. Big payoffs are likely, but I'm watching frugal threads like a hawk in order to hedge my bets!

 

We've had an extraordinary combination of luck, hard work/ambition, and negotiating smarts. When I sit and think about it, it seems almost ridiculous.

[Lily_Grace]

Depends on your definition of prosperity, I guess, but I feel we're there. The income hasn't changed a whit, but what we do with it has.

 

Before:

In over our heads in debt, a leased vehicle, and not sure where our money disappeared to - we only knew we were "broke" just like all of our friends.

 

After:

Debt free, including owning our cars outright, money in savings, and living on less than half of dh's paycheck. Oh, and actually being able to take the vacation we want.

 

 

We did a modified Dave Ramsey plan along with a major move.

 

Step 1. Write down exactly what you spend. Keep your grocery receipts for a month. The amount we were spending on coffee runs, junk food, and Target's One Spot were appalling. It was only a dollar or two here and there, but it added up to about $400/mo.

 

Step 2. Create a working budget. I like cutesy, inspirational budgets. It took us quite a while to face up to what we were spending vs. what we wanted to spend and quit trying to pretend on paper. We also had to make ourselves important and put money in savings FIRST before we touched the rest.

 

Step 3. Use CASH. It's a lot different to feel that you have 10 twenty dollar bills than $200 in the bank. You have to count them out, pay attention to them. It's not a random figure.

 

Step 4. Zero out every payday. Until we got debt free, dh and I would take the extra money and put it on a bill the night before the new paycheck hit. We always started with zero in the bank. Now we put the money into savings.

 

 

I have a few rules to help keep me grounded:

 

1. I don't pay for financial advice. If it's not free, it's not worth my time.

2. I don't buy anything I can't picture in my head going in a specific place in my home.

3. I take a few minutes at night to prepare for the next day. We invested in insulated water bottles and nice snack containers to avoid the gimmes when we're out.

4. I keep the budget up on the computer at all times. Not only does it make it easy to debit from the different columns when we spend, but it keeps our decisions family ones. The Kid is old enough to see imbalances in the columns and we can talk about them.

5. I never, EVER say "we can't afford it." That's the biggest lie in the world and it screams that our money controls us. Bad, bad, bad! We make the decision to say "that's not in the budget this time" or "we didn't plan for that expense." WE are in control!

 

 

 

ETA: one of my biggest helps was an online support group. It was embarrassing to have to say we made no progress or slipped backward. Having the personal accountability made us stronger in our desire to get control of our finances once and for all.!

Edited August 6, 2012 by Lily_Grace

[TravelingChris]

It wasn't a gimmick or anything for us. It was my dh's talents and hard, long work on the part of both of us. We aren't there quite yet but probably will be in the next few years when dh retires from the USAF. So we will be in our early 50's.

 

What I mean by long, hard work is that dh always went the extra mile to get a job done well and to make sure others who were deserving of credit were getting it. It was never a nine to five job for him and at times, was more like an 80 hour a week job. He has also worked smartly= between choosing a great topic for his dissertation, to always taking advantage of gaining new skills, to being a very good writer (a anomaly in the physics world) and one that I think is sometimes missed, but actually caring for your underlings- he always put in people for every award opportunity or special recognition and between writing well and doing that, he was rewarded with workers who also went the extra mile.

[Soror]

We haven't made that huge turnaround as some but have definitely made a good amount of progress in the last few years.

 

For us to make the biggest process was:

1- Tracking Expenses and Budgeting

2- Making Goals and keeping a focus on them

3- Not feeling we are entitled to anything, unless it is a necessity. Wanting our goals more than those things.

4- Setting ourselves up for success, planning for crockpot meals and leftovers so we don't want to eat out. Bringing water bottles. Anticipating needs and asking around or look for used before they needed and save the cash before the item is needed.

5- Budgeting in saving and not counting that as money to spend, unless it is an EMERGENCY, pay yourself first as they say

 

My parents were really poor when they married but have worked themselves up fairly well, mostly because Dad worked his way through the ranks in army and secured a good paying job with awesome benefits. Mom worked for years at 2 jobs though. Despite that a lot of it is on Mom and her keeping them to a budget. My Dad still has the poor person mentality in that whenever he gets extra money he thinks he should get to buy any toys he wants. They could be doing so much more if he would restrain his wants more. Dave Ramsey says it often and I think it is true, it is acting like a child to think you deserve something and have to buy it, even if you cannot afford it. As we mature we have to learn to control our wants and delay gratification.

 

I do think however that it helps to build in some rewards as well to help keep you on track, but make them reasonable for your income and budget them. Of those wants I think it is good to make a list and prioritize them as you can so you don't end up just spending willy nilly but with thought. But I think until a person gets out of debt then that is a very, very small amount. You have to realize though that every one of those wants that get bought put you one step further away from bigger goals. None of us can have everything. I also think as well that it helps me to think, what is the true measure of success? Is it to have toys and such or to be secure, not to have debt and savings? Really what would I rather have?

[lmrich]

It all adds up.

 

I worked as a nanny, a tutor, a house sitter, a pet sitter, sold children's clothing, did anything when I first quit my job to stay at home. None of those jobs paid well, but it added up. Even now while my dh makes a fantastic salary I still work a little tutoring, teaching community classes, etc. I don't make much, but it helps.

 

Also, do not go shopping except for food. Target, Walmart etc.. Too much temptation.

 

We still track every penny we spend. Always have even when it was not a lot of pennies.

[Annie G]

Like others said, keep a detailed budget and view it OFTEN. I play games- here's how much is in our food budget, how much can I have at the end of the pay period? We get paid every two weeks so that's how we budget discretionary income. Well, I'm happy to say that this past two week period, we didn't eat out at all- none of us! So I have that money left over and in the savings it goes. That kind of thing keeps me interested and motivated.

 

The other big change we made was being really strict with our spending- but after about 12 weeks, we were all itching to go on a shopping trip. So we did- and about four times a year we spent money- but that was down from 12 times a year so that was a huge savings for us. Well, that's now just naturally extended to about 5 months between shopping 'binges' as we call them. And the last time we did that, ds and I spent less than $20. We've just found that 'things' don't hold appeal to us. Dh and dd aren't there yet- boy do they like 'stuff'.

[Melissa in Australia]

what we have done is put away a % of our income always. We stick it in term deposit. and in both DH"s and my mind if it is in term deposit it is untouchable. We also never get anything on credit, and always take several days, or even up to a month before we purchase something. this gives us a cooling off period to think if we really need it or not.

[d.g.]

We've also been without for so long that we are buying with an 'if I don't get it now I never will' type mentality.

 

 

THIS is the hardest part to do. It's not just about learning to make a budget, how to rein in the unnecessary spending, spend less than you earn, etc. The PP have given some good practical advice for those things. But, if you've been living the "poor" mentality for so long, you have to break ingrained habits of thinking and doing that you may not even realize you have. And that's much, much harder than learning how to write out a budget and crunch numbers and resist that latte.

 

I *still* fight against habits from my childhood, when we definitely qualified as poor (bouncing back and forth over the poverty line most of the time) and I've been out of that life for 12 years now.

 

The first step to changing the habits is to recognize you have them. Then you have to be vigilant... every time you catch yourself thinking or acting that way, you have to choose to stop and change the thought/behavior. For example, it's payday and you have a certain amount of $$ in your budget for food for the next two weeks or for the month. The temptation is to spend it all, and to buy that really great deal because it won't be there next week!! (cue panicked freak-out when you consider not doing it.. oh wait, that's me...:D ) You have to step back and intentionally walk away, reminding yourself that money doesn't actually melt, that there will be another sale, that you don't have to spend every $ right that moment. It's not easy. Like I said, I still fight it. Especially in times of stress, which is when you're most likely to revert to earlier habits and ways of thinking.

 

Good luck. It's a hard journey, but it's worth it. Despite our income being half of what it was in 2008, we've paid down half of our debt and cash-flowed some major house and vehicle repairs since April 09. With luck and lots of hard work, we'll be debt-free next spring or summer. It can be done!

 

And just for fun, a link: The 5 Stupidest Habits You Develop Growing Up Poor. Warning: lots of crude language, but it hit close to home, too.

[The Girls' Mom]

For us, we try not to spend more than we make. I don't consider us as high income, but we are comfortable. We have spent any unexpected money wisely. (Like using an inheritance to pay off our mortgage, tax returns for doctor bills, etc).

 

*We don't go on lavish vacations (only dh has EVER been to Disney :lol:)

* I try to adjust our lifestyle weekly to the money available. If we are going to be tight that week..then no eating out, etc.

*The kids aren't in a ton of sports. That seems to eat a LOT of money in many families

*We have ONE credit card and pay it off monthly whenever possible. The longest I've had a balance on it is about 3 months.

*I rarely buy clothes at full price. We use thrift stores and clearance racks.

*Our tithe comes out of our check first.

 

That said, we DO probably spend more money than we should. I don't skimp on groceries. We have a family book fetish. We love techie gadgets. I like to eat out..lol.

[Lily_Grace]

And just for fun, a link: The 5 Stupidest Habits You Develop Growing Up Poor. Warning: lots of crude language, but it hit close to home, too.

 

 

:lol: Oh, so true!

[d.g.]

:lol: Oh, so true!

 

It is, isn't it?

 

My DH grew up very middle class. I sent him the link, and he just didn't get it. I think it's something you can really only get if you've lived it.

[kubiac]

Learning about class differences is actually very helpful--or at least it has been for me! I've read that the poor buy for right now, the middle class buy and maintain, and the rich buy investments.

 

One of the things we always work on as a couple is how much money to spend on maintaining and storing stuff, and how much cash to invest in higher-quality goods. So much stuff is "designed for the dump" and we're working to wean ourselves off those products and habits, but it takes a tremendous amount of time and skill (and some money) to learn to maintain your things properly. Sigh. We'll get there.

 

The best financial book I've ever read--one I revisit every couple years for a refresher and for sheer pleasure--is The Millionaire Next Door. It completely changed my thinking about money and status. A good blog based on similar principles is called The Simple Dollar. The Tightwad Gazette by Amy Dacyzyn is also a great resource.

Edited August 6, 2012 by kubiac

[plansrme]

The "make more" of spend less/make more seems to get short shrift, but you cannot underestimate the value of career planning, short- and long-term. It is a lot easier to get to prosperous with a family income in the six figures than it is with one working spouse who makes $9/hour.

 

Terri

[Mama Geek]

I think one more big thing that nobody has touched on is to be willing to think outside the box and take on some amount of risk when it comes to jobs.

 

Dh and I decided years ago to take a chance on contracting. We had both worked salary jobs on the east coast that paid decent we had a 30 year mortgage that we could have made payments on 1 salary if necessary. Well with inflation and income not keeping up with inflation we were still making some headway, but not as much as we wanted.

 

Some friends of ours talked to us about doing contract work and what the benefits were. I then talked to a few people at work who had successfully contracted in the past. I called up a contact that I had from 10 years before and dh and I both ended up with high paying contract jobs in Alaska. We turned in 2 weeks notice packed our bags and got on an airplane. We spent the first couple of weeks in a hotel and we bought a vehicle the first week we were there. 1 1/2 years later the work dried up and we headed home. We had our house paid off and a good amount in savings. We took 1 1/2 years off from working during which I became pregnant with dd. Dh has been contracting off and on since then.

 

We could not convince 1 person that we worked with to come to Alaska. They were just as capable of doing the work as we were, but they wanted what they were comfortable with. They are still working the same types of jobs and trying to pay off the same 30 year mortgages and taking home less every year.

 

We have tried to convince friends and family who are out of work in the construction industry to go to N. Dakota and work. The pay is great, it isn't easy and the weather is a problem, but there is tons of work and there has been for probably 2 years or more now. We have come across a few people who have gone up there to work for 6 months and made more than a years salary.

 

It takes some guts to make these types of changes, a lot of hard work when you do, and some sacrifice along the way, but we have reaped so many benefits that it isn't even funny. So few people are willing to take these types of chances.

[Scuff]

THIS is the hardest part to do. It's not just about learning to make a budget, how to rein in the unnecessary spending, spend less than you earn, etc. The PP have given some good practical advice for those things. But, if you've been living the "poor" mentality for so long, you have to break ingrained habits of thinking and doing that you may not even realize you have. And that's much, much harder than learning how to write out a budget and crunch numbers and resist that latte.

 

I *still* fight against habits from my childhood, when we definitely qualified as poor (bouncing back and forth over the poverty line most of the time) and I've been out of that life for 12 years now.

 

The first step to changing the habits is to recognize you have them. Then you have to be vigilant... every time you catch yourself thinking or acting that way, you have to choose to stop and change the thought/behavior. For example, it's payday and you have a certain amount of $$ in your budget for food for the next two weeks or for the month. The temptation is to spend it all, and to buy that really great deal because it won't be there next week!! (cue panicked freak-out when you consider not doing it.. oh wait, that's me...:D ) You have to step back and intentionally walk away, reminding yourself that money doesn't actually melt, that there will be another sale, that you don't have to spend every $ right that moment. It's not easy. Like I said, I still fight it. Especially in times of stress, which is when you're most likely to revert to earlier habits and ways of thinking.

 

Good luck. It's a hard journey, but it's worth it. Despite our income being half of what it was in 2008, we've paid down half of our debt and cash-flowed some major house and vehicle repairs since April 09. With luck and lots of hard work, we'll be debt-free next spring or summer. It can be done!

 

And just for fun, a link: The 5 Stupidest Habits You Develop Growing Up Poor. Warning: lots of crude language, but it hit close to home, too.

 

 

 

Interesting read. I kinda had the opposite reaction. (maybe because we weren't living in complete poverty.) i did have to relearn eating habits. In our house, if it was there, you ate it. It won't be there later, so there was no saving/waiting until you were actually hungry or craving chocolate. But, it's also made me an extreme saver. If I didn't have dh, my savings account would be huge, my pantry overflowing and my closet empty. I would buy nothing that wasn't absolutely neccessary and stockpile things that were. Dh does keep that in check. But he grew up poor, too, and has more of the tendancies on that list. I guess we balance each other out.

[Lily_Grace]

It is, isn't it?

 

My DH grew up very middle class. I sent him the link, and he just didn't get it. I think it's something you can really only get if you've lived it.

 

More'n likely. Dh and I both came from very blue collar backgrounds. We watched our parents struggle, we ate food because it was there, and there was never enough of whatever it was that needed to go around. And then to grow up and fall into the same trap...ugh. We're lucky to have clawed our way out but still work on not falling to one or the other extremes.

[tntgoodwin]

1. Emergency Fund - it really is Murphy Insurance

2. Budget for a whole year at a time. Birthdays, holidays, back to school shopping, etc... they happen the same time every year. Spread those expenses out evenly throughout the year.

3. Envelope system - helps with the behavioral side of not spending what you don't have.

4. Don't go into debt for anything that loses value. A house (and possibly education) would be the only things to even consider going into debt for. - even then, try to avoid it.

5. Career planning.

 

Basically, follow the Dave Ramsey plan to get out of debt. I don't care for his investing advice, but the other stuff is pretty solid.

[StaceyinLA]

dh is finally reaping some reward. I wouldn't say we have ever been poor, but we have struggled to raise our kids on a single income (I've had a couple of part-time jobs over the last 15 years, but nothing that ever made a huge difference in our budget). In the last 18 months though, dh's income has tripled, and within the next year, it will have quadrupled (based on the CPA's projections).

 

I don't find our lifestyle very different, but our savings account looks a LOT different, and they way we manage our monthly bills is much less stressful (always money for the entire month's bills on the 1st versus scrambling to get it paid, being a month AHEAD on our mortgage instead of down to the wire to get the payment in before it's 15 days late, cash on hand in envelopes at the house for things we know are coming up, etc.). We can also do things like vacation without devastating the budget, or struggling to do it as cheaply as possible.

 

We have been living debt-free except for our mortgage since we started listening to DR a few years ago. Within 3 years, will be able to have our home/property completely paid for. This is going to free us up tremendously to save even more for our future.

[Parrothead]

Interesting read. I kinda had the opposite reaction. (maybe because we weren't living in complete poverty.) i did have to relearn eating habits. In our house, if it was there, you ate it. It won't be there later, so there was no saving/waiting until you were actually hungry or craving chocolate. But, it's also made me an extreme saver. If I didn't have dh, my savings account would be huge, my pantry overflowing and my closet empty. I would buy nothing that wasn't absolutely neccessary and stockpile things that were. Dh does keep that in check. But he grew up poor, too, and has more of the tendancies on that list. I guess we balance each other out.

:iagree:The growing up poor mentality trickles down into successive generations. My grandmother grew up poor. She passed those tendencies on to her children (one being my mom). So my mom during my childhood when money was tight for a beginning family passed those habits on to me.

 

Now since I married and became a mom later in life my kiddo doesn't know about canned food or buying only what is needed immediately. She sees us investing and eating fresh produce. (She also sees me stockpiling food but i"m afraid of being a cat food lady.) Hopefully after 4 generations the poor mentality will be broken and she will be able to take her family up another step.

[SKL]

I forgot to add the most important thing. (I was in a hurry to log off when I posted my earlier comment.)

 

As soon as you have any discretionary cash at all, give to charity (and even before that, volunteer and give in kind). It's hard to explain why, but giving (with a positive attitude) breaks down subtle barriers to acquiring more wealth. Read Deepak Chopra's Seven Spiritual Laws of Success. (The first chapter is a tough read, but it is worth it.)

[Dolphin]

.

Edited August 7, 2012 by Northwest_Mama

[kubiac]

I think one more big thing that nobody has touched on is to be willing to think outside the box and take on some amount of risk when it comes to jobs.

 

It takes some guts to make these types of changes, a lot of hard work when you do, and some sacrifice along the way, but we have reaped so many benefits that it isn't even funny. So few people are willing to take these types of chances.

 

This has been true for us as well. It is absolutely positively terrifying for me--my dad worked for the same company for 30+ years (and did very well for himself) and I'm probably an "organization man" myself--but my husband has a much higher tolerance for risk and it's paid off. It involves regular emotional upheaval as he transitions from job to job, but there has been significant financial compensation for that lack of stability.

[speedmom4]

In September of 2009 I was fed up with our finances. We always had a cycle of accumulating debt and then paying it off. We never seemed to make any progress. That month I had an epiphany. I had always tried to do a budget based on each month. That did not work for us. My husband gets paid every 2 weeks. Twice a year we have 3 paychecks in a month. I bought an accounting ledger at Walmart and wrote out our monthly budget. But then I made a budget for each paycheck. I figured that if I stayed within the budget each and every paycheck by the end of the year we would have made a lot of progress. I also wrote down each and every debt in a separate page and crossed them out as they were paid. I had a page for savings as well.

 

Fast forward almost 3 years and I could never have imagined how that simple action would change our lives for the better. It felt so good from the very beginning to have control over our money and not the other way around. My husband was completely on board. Budgeting improved our marriage so much. We weren't stressed out about money all of the time. We had a common goal that we were working towards.

 

I didn't know in the beginning that I was basically following Dave Ramsey's plan. I really recommend him even if you don't agree with everything he has to say. I listen to his podcasts regularly. His book Total Money Makeover is probably worth it's weight in gold. I have heard that his class Financial Peace University is great as well.

 

I can't encourage you enough to get control of your money. Dave Ramsey always says, "Live like no one else now so you can live like no one else later." That saying kept me going many times when I didn't want to keep going.

 

Now we have no debt, except our mortgage. We have cut 8 years off the life of our mortgage by refinancing at a lower rate and reducing it to a 15 year fixed rate. We also are well on our way to having a fully funded 3-6 month emergency fund as well.

 

I really could go on and on. Budgeting has so drastically changed our lives and our future I am VERY passionate about it.

 

Good luck!

 

Elise in NC

[Joanne]

No advice. My situation is so unique that any cookie cutter list is a fail.

 

But I think this threat is encouraging, and helpful. Thank you.

[elfgivas]

for us, two things made a big difference.

 

1) only spending cash, which we put in envelopes labelled "food", "gas", etc. originally, we did it for a month, then for the two week paycheck, and then for me, i actually had to break it down to every week.

 

2) it sounds so silly, but it really helped. we adopted "sayings" that we reminded ourselves of again and again. cannywoman.com has many of the ones that helped us. (eg. shop at home first, do don't buy, etc). "do i need it or do i want it?" "just because i want it doesn't mean its wise", etc, etc.

 

(i also found that never going shopping until i needed something specific was a very good way to go. getting rid of all television helped us more than just about anything else, because we had no one telling us what we wanted or needed.)

 

:grouphug: its a journey.

ann

[Joyofsixreboot]

Good thread. For me generations of poverty means I never buy anything not absolutely necessary. Ever. It's a compulsion. Dh also grew up fairly strapped. He forgoes things he needs but likes to give gifts to me and the kids. I find the different reactions among people fascinating.

[Renee in NC]

I read an article several weeks ago about the attitudes that you take from poverty that can hinder you later. One of the items was what you said - that you will spend whatever money you get because you know it will be gone tomorrow anyway. I am working on that! What I did was to start a list of things that I know we needed or wanted to do. Some of the items on that list were:

• haircuts for the kids
  
• nicer clothes for the kids
  
• shoes for me
  
• new socks and underwear
  
• vet care for the dogs
  

 

and so on. I just worked down the list (and I am still working on it and adding to it!:tongue_smilie:)

 

Another point made in the article is that poor people tend to only buy what they need now, regardless if they will need it in the future. This can apply to food, clothes, household items, etc. This goes with the other idea, because you need to not spend money on other things in order to have the money to buy something that is a good deal even if you don't need it right now.

 

I have a spreadsheet where I create a cash plan (where each paycheck is going) and a kind of "envelope system" but electronic. I did that when we were poor, and I still do it now.

 

We aren't prosperous my most standards, but our income has quadrupled from where we were 3 years ago this month! It feels a lot better.

[kroe1]

For me, the only financing can be for houses and education. Everything else requires cash and this includes cars and furniture.

 

A hundred years ago, when I was in my twenties, my neighbor got a new car and said she paid cash for it. I couldn't believe it, and asked her how she did it. The first car she ever bought, she had to finance. She paid the bank each month and put an equal amount in her savings account each month. By the time she had to buy another car, she had the cash to do so. But she still put a "car payment" into her savings account each month. So from then on, she always had the cash for a new car. Luckily, I took her advice for cars. But that also got me in the habit for similar large purchases like furniture.

 

I also did not go to undergraduate school on loans. I had to support myself and family with a day job, so I could only go to school at night. It took forever, but I paid cash as I went. I was also saving like mad to quit work for 4 years so I could go to school full time. We ate a lot of dried beans and that's all I can say about those years. Then to pay for the rest of my education, I found a sponsor. I just hit the streets looking for someone who would need my post-graduate skills. Then I traded them years of work for money for school.

 

I think there are a ton of Dave Ramsey-like skills we can all learn to keep us financially healthy. But bottom-line, I think one needs a clearly defined financial goal to start. Whether it be a car paid in cash, a new career which pays more, or whatever, the goal must be clearly spelled out. Just a general dream of living comfortably with more stuff won't do it.

 

After the goal is defined, then the entire family needs to be focused on that goal above all other financial wants. That goal must be more important than any impulse purchase that might entice one along the way. I can remember passing by air freshener at the grocery store. Big tears started flowing down my face as I realized I could not buy those anymore if I wanted to go to school. Ha! It seems like a joke looking back. (And, my allergies cleared up.)

 

Good luck in your financial turnaround.

 

:)

[Soror]

But bottom-line, I think one needs a clearly defined financial goal to start. Whether it be a car paid in cash, a new career which pays more, or whatever, the goal must be clearly spelled out. Just a general dream of living comfortably with more stuff won't do it.

 

After the goal is defined, then the entire family needs to be focused on that goal above all other financial wants. That goal must be more important than any impulse purchase that might entice one along the way. I can remember passing by air freshener at the grocery store. Big tears started flowing down my face as I realized I could not buy those anymore if I wanted to go to school. Ha! It seems like a joke looking back. (And, my allergies cleared up.)

 

Good luck in your financial turnaround.

 

:)

:iagree::iagree::iagree:

[elegantlion]

I think there are a ton of Dave Ramsey-like skills we can all learn to keep us financially healthy. But bottom-line, I think one needs a clearly defined financial goal to start. Whether it be a car paid in cash, a new career which pays more, or whatever, the goal must be clearly spelled out. Just a general dream of living comfortably with more stuff won't do it.

 

After the goal is defined, then the entire family needs to be focused on that goal above all other financial wants. That goal must be more important than any impulse purchase that might entice one along the way. I can remember passing by air freshener at the grocery store. Big tears started flowing down my face as I realized I could not buy those anymore if I wanted to go to school. Ha! It seems like a joke looking back. (And, my allergies cleared up.)

 

Good luck in your financial turnaround.

 

:)

 

:iagree: We're not in prosperity right now, but we've had some good years. The ability to make it at just above poverty level income has been because we made good habits in some areas.

 

I think it's important that the entire family be on board. It's hard when one adult has one style of spending and the other adult, how shall I say this tactfully, spends more freely.

 

I also think housing and car expenses can play a huge role in getting ahead. We had two older cars that are paid for. They both need work, which we can't do because of lack of $, but we hold the title. They are decent working vehicles which we both bought used. One was financed over 2-3 years, the other was paid for with cash.

 

In the midst of our economic downfall we moved., It's a better house, near family, and our living expenses are less than any rent could be. We had to move further out of the city to get the price we wanted, but we're in a town where we can live locally (don't have to leave town to shop). It was a place I'd never thought I'd live, but it's better than I thought it would be.

 

 

Tracking expenses is another good habit. WE've done in 30 day increments before and the first time it was eye opening to see how much we spent on stupid stuff.

[fairfarmhand]

pay right now for everything.

 

Keep long term goals in mind all of the time.

 

We never borrow money, except for our house, and maybe a vehicle, but only if we can pay if off in less than a year.

[Jpoy85]

The first step is to write down everything you spend. Everything! Write down the mortgage, the car payment, the utilities, the grocery reciept, the starbucks coffee, the manicure, the impulse buy at TJ Max, the parking lot fee, the kid's allowance, the paypal purchase at amazon....every SINGLE penny.

Write it down for three months. (or use some finacial software to the track expenses.)

 

After three months, look at where your money is going. Make some informed decisions about your particular habits. Choose one where you are going to make a change. ONLY one, too many changes too fast will make the new habits seem "too hard" or "too restrictive".

 

Keep writing down expenses, next month look again at the data and continue working on your first change. Can you make another?

 

Now that you've started to think about your outgoing. Think about your incoming. Can you change that? Think about your savings goals? Start with a three month emergency fund. Save until you have complete three month saving account. Delay purchases, make lists for "needs", plan to shop rarely, look at the list well before you go and seperate the needs from the wants. (example, my son wants new headphones, he needs new trainers.)

 

There are lots of free sites that can help. Don't spend any money on this. (this said, however, the money we spend on our finacial software, has paid for itself over and over again.)

 

Going from finacial disaster to prosperity is a process. Start small and build one small succes on top of the other.

 

Finally, pat yourself on the back for simply asking the question. Recognizing the problem is the biggest step, the rest will be tough, but not undoable.

 

Good Advice!!