"No Spend" February

[ErikO]

This month the wife and I (along with some of our friends) are trying an experiment to improve our financial liquidity.

No extraneous spending.

We're going to use the shortest month of the year to try and get our finances back into shape. We're only going to use our money to cover rent, bills, gas, other transportation, food and medical costs for the month of February.

We're making two caveats; we each get $50 'mad money' and the 14th doesn't count as being in February.

So starting tomorrow no eating out, no spending on any projects aside from the $50. The fact that we don't have to worry about range fees means that we should see an uptick in range trips.

Wish us luck!

[waksupi]

That sounds like every month for me, minus the $50 mad money. And I don't have a 14th in any of my months. I don't even remember the last time I ate out.

[sundog]

I did that same sort of thing for a number of years (maybe not quite so intense), including dumping merit and COLA raises into 401k, until it got to the point I was on the verge of not having enough to cover expenses, rising costs being what they are. A little rearrangement at that point and everything was again okay. At that point retirement funds were comfortable, but still being added to. It takes discipline, for sure.

[725]

Funny you picked the shortest month of the year :) Best of luck. I'm kind of with waksupi on this one.

[Recluse]

I did that same sort of thing for a number of years (maybe not quite so intense), including dumping merit and COLA raises into 401k,

That's exactly how the wife and I retired in our mid/late 40's. No matter how much of a raise or bonus we got, it all went into the investment/IRA/retirement accounts and we continued to live on a very meager base salary.

Now the added bonus after living like that for twenty years is that we take a pretty hard look at every purchase we make, every trip we take, etc.

Amazing how much stuff we are still able to easily live without and not miss a thing.

Good job, Erik. Go for it.

:coffee:

P.S. Never knew a liberal who had fiscal discipline. :kidding:

[ErikO]

Financial responsability is part of what I'll be giving myself for my 40th in March. ;) Increasing our savings over the next 25 years will definitely help out.

I'm sure it will carry over, we're both good cooks so adjusting things to eat at home more will not be a hardship, that's for sure. Reducing the take-out spending will make a huge difference even if we don't fix anything else.

We first thought of doing it for one pay period, but then wee realized that 29 days would be more of a challenge and have a much higher payoff as well. This should help us un-***** our monitary situtation which is a good thing. :)

[ErikO]

P.S. Never knew a liberal who had fiscal discipline. :kidding:

lol I love breaking steriotypes. ;)

[bowfin]

Our country would really benefit from more savings and less personal debt.

I told my wife I am going to wipe out one piece of debt we have if I have to sell everything in the basement.

I have started a notebook and will see how long it takes me to get that number to zero.

I wouldn't put too much of that surplus money in the hands of Wall Street, though. A lot of that goes up in smoke.

[ErikO]

Thankfully, we have no credit cards, just a debit card. No checks, just cash. We've still managed to get into trouble here and there which depleted our savings.

I don't really believe in 401(k), but my work puts in 3% extra for me. I put in 1% just in case it's still there when I turn 65. Long-term, US-only investments is where I've put the money.

Lovelife, it will be nice to be able to get my wife nice things from time to time. :)

[ErikO]

Her gun is next after I get the S&W M&P15 lower. :)

She has a list of guns I can get w/o her being mad as long as other things are covered as well. I am a VERY lucky guy.

[starreloader]

Erik,

The wife and I did the same thing when I decided I wanted to retire at 60.. We spent nothing on anything we did not need... Only went out once a month for dinner... Took us 4 years but in that time we paid off every loan ( car, both home loans, her credit card, college tuition ).. Today at 66 I can happly say, "I don't owe a dollar to anyone"... We are living well within our means and have no plans on ever going back to "owing anyone"...

Now spending on the grandchildren and enjoying it!!!!!

Erik you can do this, it just takes discipline and determination.. Start with you smallest debt first and pay it off, then take on the next smaller.... Do this until you have reached you goal..

[KohlerK91]

Erik,

( car, both home loans, her credit card, college tuition ).. Today at 66 I can happly say, "I don't owe a dollar to anyone"... We are living well within our means and have no plans on ever going back to "owing anyone"...


.



No one will ever own their house...........We will always owe taxes on it.

[Ickisrulz]

Stick with it. You will discover 2 things.

1. You really don't need much
2. You will be amazed at what you can do with what you already have.

Gee...this could be applied to firearms and reloading equipment couldn't it?

[MT Gianni]

I don't really believe in 401(k), but my work puts in 3% extra for me. I put in 1% just in case it's still there when I turn 65. Long-term, US-only investments is where I've put the money.
:)

You need to make sure that you put in as much as your employeer matches. Even if you don't believe it will be there you can get a loan against your balance to pay for your house, home improvement etc. If you are wrong and they are confiscated into general fund or not available at all on paper you are your own debtor not an entity that has forclosure capabilities.

[Ickisrulz]

One of the best decisions my wife and I made was buying a house that was not too expensive for us and met our needs without being extravagant. Our house is outside the city limits of Shawnee, OK meaning fewer taxes as well. We have 2.5 acres now and hope to add an adjacent property.

The price of the house was right and the low mortgage enabled us to pay it off in just 9 years. We have also been able to pretty much do what we want as far as discretionary spending, vacations, etc. since we are not paying a huge mortgage.

I'm retired from the AF and my wife will be in 2013. No mortgage, low cost of living and no current debt will mean we can live without either of us working if we so desire (as long as the retirement checks keep coming anyway). We are both in our 40’s.

[Ickisrulz]

No sir. Firearms and reloading equipment are specifically excluded in the great household budget amendment passed in the Love Life house back in 2005 as long as the following conditions is met:

Debt free
Bills paid
Money in savings
I take an extra odd job here and there to make some extra spending cash outside of my salary.

:bigsmyl2:

Our agreement is that we each get $200/month do do whatever we want with. We've been doing this for almost 20 years. Works well.

[andremajic]

No one will ever own their house...........We will always owe taxes on it.

Yep, sad but true.

Render to Caeser what is his due.

[Recluse]

Thankfully, we have no credit cards, just a debit card. No checks, just cash. We've still managed to get into trouble here and there which depleted our savings.

I don't really believe in 401(k), but my work puts in 3% extra for me. I put in 1% just in case it's still there when I turn 65. Long-term, US-only investments is where I've put the money.



Credit cards are financial heroin. We have two--one for travel in which we're not comfortable using our debit card (especially for hotel and car rentals), and the other for a catastrophic event--it has a rather high limit on it.

Both stay locked up in the gun safe.

As far as 401(k) plans, I'm a huge believer in them. Huge. You need to study and be financially aware of what is going on in the investment world, and if you do that, even putting in the minimal amount will garner you a lot of money in a relatively short period of time.

You're in St. Louis. There is a bank there called UMB. They did our financials back when we lived and worked in Kansas City in the mid-90's and because of their work and investing philosophies, we will have zero financial worries when we're ready to start cracking into those accounts.

Anytime an employer even contributes to your 401, it's a win-win situation. It's up to YOU to manage the account so as to not lose money.

I've been in 401 plans since the early 90's and have yet to lose money.

:coffee:

[ErikO]

You need to make sure that you put in as much as your employeer matches. Even if you don't believe it will be there you can get a loan against your balance to pay for your house, home improvement etc. If you are wrong and they are confiscated into general fund or not available at all on paper you are your own debtor not an entity that has forclosure capabilities.

That's why I don't have much in 401(k) at the moment. When I changed jobs, the company I was working through didn't offer a 401(k) so I took a payout. That got us much further ahead than the $200 I ended up oweing in taxes on the dispersal. Most of the payout went to pay back a hardship loan I took out.

We've been renting for the last 16 years, made relocating for work much easier. Now, we have an excellent landlord - a younger fellow just starting his family. While I don't have 'equity' in my house, he owes nothing for the house we're renting aside from taxes which he has paid up for the next few years. My rent covers part of his mortgage on his personal house and I really don't mind.

The housing bubble had little direct impact on us aside from getting a decent house at a fair rent that's held steady since we moved in a few years back.

[ErikO]

Our agreement is that we each get $200/month do do whatever we want with. We've been doing this for almost 20 years. Works well.

That is where we should be at. With this current plan, even if we only do it once a quarter, we should be there by 4/2013 when the car is paid off. :)

[ErikO]

You're in St. Louis. There is a bank there called UMB. They did our financials back when we lived and worked in Kansas City in the mid-90's and because of their work and investing philosophies, we will have zero financial worries when we're ready to start cracking into those accounts.

Anytime an employer even contributes to your 401, it's a win-win situation. It's up to YOU to manage the account so as to not lose money.

I've been in 401 plans since the early 90's and have yet to lose money.

:coffee:

That is good advice. I'll check into UMB and see what they can do for us.

[Houndog]

Erick,

You and the Wife are setting out on a course that WILL lead to financial independence, and in FAR less time than you might think! I learned my lesson the hard way under the second worst president in American history's administration. I had a new Wife ,a new Daughter and loaded to the max with debt. I lost an above average paying job and had to buy a VERY worn out truck and go on the road as NO jobs were to be had at any wage. We put ourselves on a cash only plan (pay cash or do without) and started attacking the bills, smallest ones first, with a vengence. In one year we eliminated all our debt except the house and in three years were debt free, ALL during the Carter recession! Long story short, plan where you want to go, formulate your plan to get there and STICK WITH IT!!!!!! You will be amazed how much more money you will have, even at your current wage, when you are debt free. Interest on what you owe turns into extra cash to invest to make even more money. That little piece of plastic in your pocket is the WORST threat to financial security you can have!

[starreloader]

Erick,

You and the Wife are setting out on a course that WILL lead to financial independence, and in FAR less time than you might think! I learned my lesson the hard way under the second worst president in American history's administration. I had a new Wife ,a new Daughter and loaded to the max with debt. I lost an above average paying job and had to buy a VERY worn out truck and go on the road as NO jobs were to be had at any wage. We put ourselves on a cash only plan (pay cash or do without) and started attacking the bills, smallest ones first, with a vengence. In one year we eliminated all our debt except the house and in three years were debt free, ALL during the Carter recession! Long story short, plan where you want to go, formulate your plan to get there and STICK WITH IT!!!!!! You will be amazed how much more money you will have, even at your current wage, when you are debt free. Interest on what you owe turns into extra cash to invest to make even more money. That little piece of plastic in your pocket is the WORST threat to financial security you can have!

ERIK,

That is how the Wife and I did it... Although I didn't loose a job we attacked our debt with a vengence also.. Everything paid off in 4 years and have been debt free (except for taxes ) ever since...

Make a sustainable plan and STAY WITH IT!!!!... Like Houndog and others have said, pay off the smallest debt first , then the next and the next and before you know it the phone will stop ringing and the letters will stop... This strategy of attacking one bill at a time does work.. By paying off the smallest debt first you will have more to apply to the next highest debt.. MAKE THIS WORK FOR YOU!!!!

[Blacksmith]

Eric

When you pay off that car, keep on driving it and keep putting that payment ammount in a bank account for the next one. Keep the one you have as long as you can and then replace it with something compriable preferably lightly used so you don't loose a bunch when you drive it off the lot. Use what you saved to make the loan shorter not lower payments and eventually you will be able to walk in and pay cash and keep all the interest for yourself.

401K up to the company match, then Roth IRA untill you get to the maximum (you can withdraw principle at any time with no penalty but not the earnings); then go back to either 401K or conventional IRA. Start learning how to invest because this will be a big part of your income for after you retire. You can do better than the "experts" who are more interested in how much they make than how much you do.

Start by exploring this site: http://www.dogsofthedow.com/

[Recluse]

This is all superb, on-the-money advice from Blacksmith.


Eric

When you pay off that car, keep on driving it and keep putting that payment ammount in a bank account for the next one. Keep the one you have as long as you can and then replace it with something compriable preferably lightly used so you don't loose a bunch when you drive it off the lot. Use what you saved to make the loan shorter not lower payments and eventually you will be able to walk in and pay cash and keep all the interest for yourself.

Been doing this since we paid off our two car notes in the late 90's and have not made a car payment since--paid cash. Also did NOT buy brand new, but rather between one and three years old, depending upon mileage and condition. Let someone else take the massive depreciation hit.

Another way to save on cars is to take care of them. I've kept a maintenance log book (a little pocket-size flip pad you get at office supply stores) for every vehicle I've ever had. Also keep one for the boat. They're required for airplanes.

Track your mileage and DO the preventive maintenance on time. . . like oil and filter changes, tire rotation, belt replacement, flush/fill cooling systems, etc.

You can save even more money by doing many of these things yourself. You don't have to be a "shadetree mechanic" to do oil changes or flush/fills, belt changes. With all the videos out on YouTube and all the "how to" information on the web--including specialized forums (just like this one), you can do much of the routine maintenance yourself.

I save huge amounts each year doing my own maintenance, and those savings go. . . you guessed it, right back in the bank.


401K up to the company match, then Roth IRA untill you get to the maximum (you can withdraw principle at any time with no penalty but not the earnings); then go back to either 401K or conventional IRA. Start learning how to invest because this will be a big part of your income for after you retire. You can do better than the "experts" who are more interested in how much they make than how much you do.


If I paid attention to those Saturday and Sunday shows you hear on the radio, I'd be broke as hell. Those are paid advertisers who want you do do things THEIR way.

There's a reason THEY'RE doing well--their listeners are paying for it.

The foundation of investing consists of a large degree of plain old common sense, the ability to research and a little bit of fortune telling based upon the previous two factors (common sense and research).

I bought a huge amount of American Airlines stock right after 9/11 when they were seriously flirting with Chapter 11 because nobody was flying. AA had just bought out TWA and had a lot of overlapping routes and were flying a lot of half-empty airplanes.

Then the ragheads struck and the airline industry was hit.

I watched AMR stock plummet to below $4/share, and that's when I drained several of our long-time IRAs and rolled over one 401(k) and bought a bunch. I rolled the dice on basically our entire savings portfolio.

Two year later, I sold 95% of it for $41/share.

How did I know to do this?

1. Common sense told me that the government wasn't going to let the world's largest airline go bankrupt, especially because of the worst terrorist attack in U.S. history.

2. Research and inquiries into the airline unions indicated the employees would do whatever was necessary to not let their airline fail because of the terrorist attacks.

3. From experience, I knew that Americans have short memories and our need for "instant gratification" would have folks back flying sooner rather than later.

My longterm 401(k)s and IRAs are through UMB Financial/Kansas City, and my stocks and investments are through American Century/Kansas City. It was in KC in the early/mid-90's that we finally began turning the corner financially by doing exactly what you and your wife are doing, and I left nothing to chance and sought out the best financial advisement I could from these two respected entities.

It doesn't take much at all to get started, and in fact, UMB used to have a division that specialized in helping people start up with only a minimum deposit/investment.

Common sense. Research. See the future based upon common sense and research. Do your homework. Develop and maintain discipline. Pay zero attention to "the Jones" and their brand new cars and swimming pool and swanky zip code and new eight bedroom house. Take care of what you have and squeeze every possible mile and day out of it. Plan. Plan some more. Stick with all of the above.

You'll get where you want to be.

:coffee:

[Houndog]

One thing I'll add to what Recluse said is to invest in what YOU know! Don't listen to what some talking head tells you to invest in! They are out to make more money FOR THEMSELVES, and don't put all your money in one pot! Some of my investments are Fidelity for a mutual fund, Caterpillar, Freightliner Corp, Cracker Barrel, Ford, ADM and Alliant. I have a transportation background. Recluse bet on American and won. I bet on Exide Battery (they hold the gooberment contract for naval batteries and OEM supplier for Chrysler and Ford) and lost. When you bet on a shakey company you can make it BIG and you can also loose. Be prepaired to loose occasionally and don't bet the farm on anybody.

[ErikO]

It's been ten+ years and I still curse at the fact I had no money to invest in Cisco when it was trading for $1/share in 2002.

I'd be retired now. ;)

Thanks again for the support and encuragement. I've been giving too much money away on late fees and bank fees. Once that stops, we'll be fine.

As far as cars go, I literally drive them until they don't run anymore. The 2000 Impala LS only has 140k on it, it's only about half dead at worst. I'm sure that my son will be learning to drive on it in five years.

[ErikO]

So far so good, used my $50 'mad money' to cover some 1911 stocks that have been on hold with a friend for way too long. We have our once-weekly dinner out tonight and then it's off to the range for some pre-paid 'group therapy'.

[ErikO]

1/2 way-ish through the month and so far so good. We've kept spending down and have been eating like royalty at home. :) The grips came in the mail and I am happy with the $50 I spent on them. Now to get the Rock Island tactical .45 I've been eyeing...

Our washer decided this month to lock up it's transmission so it won't spin out clothes but thankfully we had enough to get a replacement after I determined that it was gone enough to justify the expense. Thankfully the motor is good and the brand-new belt should be used for something, so I'll be building a tumbler and then recycling the remains. Total win/win, aside for the 2 trips to the 24-hr laundry to do some clothes in the meantime. ;)

How's everyone else's No Spend going?