Comments on: The State of Things (Logan Has $138.95, Mike Has Some Stress)

By: Caitlin Young@twitter

Caitlin Young@twitter — Thu, 07 Jun 2012 01:00:47 +0000

Remembering that I ACTUALLY have X amount of money instead of Y amount because my landlord hasn’t deposited my rent check yet has been one of my biggest money pitfalls for years. I have a budget spreadsheet, but I seem to have graduated from “never check my bank balance” to “monitor my bank balance, but avoid my budget spreadsheet like looking at it will turn me to stone”. Progress?

By: bibliostitute

bibliostitute — Tue, 05 Jun 2012 17:03:58 +0000

@Scarlton Banks it is in hebrew! why not in english!?

By: Katzen-party

Katzen-party — Tue, 05 Jun 2012 17:01:40 +0000

@Megano! YES! I don’t know why more people don’t treat their credit card as cash. It has worked so well for me, I can’t recommend it enough. I guess I’m really old-fashioned in that I balance my checkbook religiously (I feel like I haven’t seen anyone talk about a checkbook on this site, but I’ve had such success using mine!)–every debit transaction, ATM withdrawal, deposit, and now credit card transaction goes into it so I know EXACTLY how much money I have available. I practically never pay interest on my credit card (I once carried a balance for about three months, five or six years ago because something ended up costing me more than I thought, but otherwise that’s it!).

By: Saralyn@twitter

Saralyn@twitter — Tue, 05 Jun 2012 16:20:49 +0000

@Megano! I would always keep my rent money in savings. As soon as I got one of my two paychecks for the month, I’d pull out 1/2-2/3 of what my rent is and put it in the savings account. When my second paycheck got deposited shortly before rent was due, I’d pay all my other bills and then transfer whatever I needed to cover rent from the savings account. Usually it ended up with a little leftover in savings – to be applied to a Future Scooter Purchase.

….I have no idea how this will work now that I’m only getting one paycheck at the end of the month.

By: redheaded&crazy

redheaded&crazy — Tue, 05 Jun 2012 15:44:45 +0000

@Megano! I think I’m going to adopt your strategy of paying off bills at the beginning of the month regardless of due date. It drives me up the wall that bills all have different due dates.

By: stuffisthings

stuffisthings — Tue, 05 Jun 2012 15:37:10 +0000

@forget it i quit There’s an exercise that economics/finance teachers do to explain the concept of net present value and discount rates. Basically, the game is: would you rather have $100 today, or $110 in a year? $120? $130?

Whatever that amount ends up being is your personal discount rate — often much higher than what an institution, company, or government would use (people like Logan and myself are sometimes said to suffer from “hyperbolic discounting” where the discount rate increases with the length of the delay). If you can get an interest rate less than that, and you can afford to make the payments, then borrowing “makes sense” for you.

The most intuitive example is buying a house: for people who want to own a home, getting a mortgage at a low interest rate almost always makes more sense than spending 30 years to save up the cash price of the house. Likewise, as bad as student loans are, it would probably be silly to try to save up four years of college tuition by working at McDonalds, only to graduate debt-free when you are 40 (especially with costs increasing as they are).

By: Megano!

Megano! — Tue, 05 Jun 2012 15:33:52 +0000

What I do is keep all my bill money in savings, and know how much I have to spend on groceries and stuff, and that goes in a separate savings account. Usually bills get paid off at the beginning of the month regardless of when the due date is, because that’s when I have the money to pay it.
If I want to actually use the money, I have to transfer it into chequeing, which takes a day. I almost never have more in chequeing than I plan on using. That way I always know what’s going in and out, and I have to think about it before I transfer it. Plus if there’s no money in chequeing, nothing I can do about it until the next day.
Also I have said it before, but I treat my CC as cash. My full balance comes out of my monthly budget, and if I need more money on the card to buy like furniture or something online, I put more on. I have only ever paid interest once, and it like 20 cents or something.

By: stuffisthings

stuffisthings — Tue, 05 Jun 2012 15:25:02 +0000

@Sarah H. Yeah, cash does seem to evaporate on you, but I think I have the discipline for it. Usually when I’m down to my last $40 or $60 and payday is a few days away, I just withdraw it all. Makes you think HARD about what you’re buying, and also, no possibility of an overdraft unless some bill or something comes through.

By: redheaded&crazy

redheaded&crazy — Tue, 05 Jun 2012 15:22:42 +0000

@Sarah H. Yes! Agree with hiding the card! This is what I do most of the time. A while back I accidentally put all my money into my bills account and then had nothing left for my life account so things got a bit wonky. And as you say it’s good to have on hand for emergencies, but keeping it out of sight is a very good idea.

By: Sarah H.

Sarah H. — Tue, 05 Jun 2012 14:55:45 +0000

@Sarah H. Also, for the love of god, HIDE THE DEBIT CARD FOR THE BILLS ACCOUNT. Mostly so you don’t mix the two up (mine look exactly the same), but also so you aren’t tempted to go “oh, I can just put this one thing on it, it won’t be that bad…”

I actually do keep that card in my purse just in case (for example, to pay the copay at a doctor appointment since I factor those into bills), but it’s deep within a zippered compartment.