Author Topic: BEST Advice You've Heard OR Discovered!!!  (Read 17605 times)

v8rx7guy

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #50 on: May 11, 2016, 02:21:43 PM »
Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

You're right, probably no difference.  The difference comes when when you become more aware of your spending because of the cash aspect.  Take a grocery budget of $400/mo as an example.  In your case, you go out and you go shopping with your card only buying only the stuff you need... no problem, and you'll probably stick to your $400 because you have that self control.  If you're a cash budgeter, you take out that $400 at the beginning of the month and say., " damn thats a huge stack of $20's.  How the hell do I spend this much on food?  I'll bet I can do $380."  That's at the macro level.  At the micro level, you're subtly making mini decisions throughout the month that are based on the actual visual of how much you have left in your category and feeling the pain as it goes out.  You're feeling the breaking of that $50 bill, you're feeling that end of the month crunch, you're asking if the auto parts store has a cash discount, etc.  When you're more aware, you're more frugal... try it out for 3 months.

Zikoris

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #51 on: May 11, 2016, 02:28:08 PM »
Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

You're right, probably no difference.  The difference comes when when you become more aware of your spending because of the cash aspect.  Take a grocery budget of $400/mo as an example.  In your case, you go out and you go shopping with your card only buying only the stuff you need... no problem, and you'll probably stick to your $400 because you have that self control.  If you're a cash budgeter, you take out that $400 at the beginning of the month and say., " damn thats a huge stack of $20's.  How the hell do I spend this much on food?  I'll bet I can do $380."  That's at the macro level.  At the micro level, you're subtly making mini decisions throughout the month that are based on the actual visual of how much you have left in your category and feeling the pain as it goes out.  You're feeling the breaking of that $50 bill, you're feeling that end of the month crunch, you're asking if the auto parts store has a cash discount, etc.  When you're more aware, you're more frugal... try it out for 3 months.

I suppose it makes sense if you're not optimized yet, but having reached the point of only spending around $700/month (including my rent, food, bills, clothes, everything), I don't see making cutbacks as being at all beneficial. In fact, it would seem outright harmful in terms of groceries because you would lose your ability to stock up during sales.

v8rx7guy

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #52 on: May 11, 2016, 02:48:49 PM »
Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

You're right, probably no difference.  The difference comes when when you become more aware of your spending because of the cash aspect.  Take a grocery budget of $400/mo as an example.  In your case, you go out and you go shopping with your card only buying only the stuff you need... no problem, and you'll probably stick to your $400 because you have that self control.  If you're a cash budgeter, you take out that $400 at the beginning of the month and say., " damn thats a huge stack of $20's.  How the hell do I spend this much on food?  I'll bet I can do $380."  That's at the macro level.  At the micro level, you're subtly making mini decisions throughout the month that are based on the actual visual of how much you have left in your category and feeling the pain as it goes out.  You're feeling the breaking of that $50 bill, you're feeling that end of the month crunch, you're asking if the auto parts store has a cash discount, etc.  When you're more aware, you're more frugal... try it out for 3 months.

I suppose it makes sense if you're not optimized yet, but having reached the point of only spending around $700/month (including my rent, food, bills, clothes, everything), I don't see making cutbacks as being at all beneficial. In fact, it would seem outright harmful in terms of groceries because you would lose your ability to stock up during sales.

Just read your journal, and I'd recommend trying cash budgeting for your shopping category and food category if you want to try it instead of just theorizing that it won't be beneficial.

Zikoris

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #53 on: May 11, 2016, 03:19:34 PM »
Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

You're right, probably no difference.  The difference comes when when you become more aware of your spending because of the cash aspect.  Take a grocery budget of $400/mo as an example.  In your case, you go out and you go shopping with your card only buying only the stuff you need... no problem, and you'll probably stick to your $400 because you have that self control.  If you're a cash budgeter, you take out that $400 at the beginning of the month and say., " damn thats a huge stack of $20's.  How the hell do I spend this much on food?  I'll bet I can do $380."  That's at the macro level.  At the micro level, you're subtly making mini decisions throughout the month that are based on the actual visual of how much you have left in your category and feeling the pain as it goes out.  You're feeling the breaking of that $50 bill, you're feeling that end of the month crunch, you're asking if the auto parts store has a cash discount, etc.  When you're more aware, you're more frugal... try it out for 3 months.

I suppose it makes sense if you're not optimized yet, but having reached the point of only spending around $700/month (including my rent, food, bills, clothes, everything), I don't see making cutbacks as being at all beneficial. In fact, it would seem outright harmful in terms of groceries because you would lose your ability to stock up during sales.

Just read your journal, and I'd recommend trying cash budgeting for your shopping category and food category if you want to try it instead of just theorizing that it won't be beneficial.

You realize I spend about $100-$120/month on food, in Canada, right? Lowering it any more would require me to completely change the way I eat, for VERY little benefit. My shopping category runs between $40-$60/month, the vast majority being replacement items for things that break or wear out - and my shopping includes all household items, socks, underwear, clothes, shoes, and tools, in addition to video games and stuff like that. I'm just not sure where you're seeing fat to cut.

Mother Fussbudget

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #54 on: May 11, 2016, 05:05:52 PM »
Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

If you use a CC with grocery store category bonuses - a card that gives you 3x travel miles / points for every $1 spent at grocery stories (for example), then you could buy groceries with a CC, and pay off the card balance every month, you can pocket the free extra travel award points toward your FI travel / frequent flier account without paying interest as long as you pay off the balance every month.  Your card may not be 3x per $1, it might be 1x, or it might be 2% cash back.  Whatever. 

There are easy ways to make CC's a net positive toward FI as long as the borrower has the discipline to pay off the balance every month.

Kris

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #55 on: May 11, 2016, 05:08:43 PM »
Best advice I'd discovered: do your own taxes (using the IRS booklet) and DO THE MATH to understand how the parts interact.  That's when I learned just how much extra we could save from 401k and HSA contributions, since lowering AGI raised our EITC.  Since the phaseout rate is ~21%, and our state matches at 30%, we can gain up to nearly 50% (10% fed, 4% state, 21% phaseout, 6.3% state match, and 7.65% FICA for HSA part).  Even for the 401k after we hit 0 fed tax, we are at least getting 31.3% increase in our refund; almost no chance of hitting 0 state tax, the deductions/exemptions are ridiculously low, and we hit max EITC well above that level.

This. I need to do this.

I used to do my own taxes, until I met my DH, whose situation tax-wise was more complicated than any I had encountered, and then my own situation changed. I have been paying to get them done for the past ten years, and I really need to throw the crutches away.

Zikoris

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #56 on: May 11, 2016, 05:10:07 PM »
Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

If you use a CC with grocery store category bonuses - a card that gives you 3x travel miles / points for every $1 spent at grocery stories (for example), then you could buy groceries with a CC, and pay off the card balance every month, you can pocket the free extra travel award points toward your FI travel / frequent flier account without paying interest as long as you pay off the balance every month.  Your card may not be 3x per $1, it might be 1x, or it might be 2% cash back.  Whatever. 

There are easy ways to make CC's a net positive toward FI as long as the borrower has the discipline to pay off the balance every month.

Yes, that's what I do. I'm questioning how using cash instead would change the process in any way...

mustachianteacher

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #57 on: May 11, 2016, 05:50:38 PM »
Freeze the dinner leftovers into lunch containers. Grow a lunch stash in the freezer this way, and you'll never waste leftovers and never eat the same thing 3 days in a row.

I used to dutifully slog through the same meals for 2, sometimes 3 days in a row because I didn't like the idea of throwing out leftovers. Now I still eat the leftovers, but I freeze them and then take out something "new" for lunch the next day. It's not really a money-saver because the food gets eaten both ways, but it felt like a huge light-bulb moment when I realized I didn't need to eat all the leftovers all at once.

MrsPete

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #58 on: May 12, 2016, 07:28:44 AM »
How do you know that you don't spend more with credit than you do cash, honest question?
I practically always use my credit card when buying groceries, gas and other "everyday stuff".  My husband and I've always been completely in-sync in terms of budget, and we're really good at keeping a running tab of what's acceptable and what's not -- it's quite rare for either of us to overshoot the mark.  Having said that, I rarely ever stop to think about HOW I'm paying for the goods.  I focus on what I'm buying and the price -- not how I'm paying.  So I don't really see how I could be "upgrading" when pay with a credit card. 

This is a difficult topic because actions can be interpreted differently.  Here's a real-life example: 

This morning I went to the grocery store with a small list.  However, as I was shopping, I noticed that country ham was on sale for 2.49.  We LOVE country ham biscuits as a quick weeknight dinner, and it's usually 4.50-5.00, so I bought the last two packages (I would've bought four, if they'd been available) ... not only did I buy what you might consider an "impulse purchase", but once I had the country ham, I also added a can of store-brand "Grands" biscuits to complete that meal.  Yeah, I did spend about $6 that I hadn't planned to spend, and, yes, in part that was possible because I was paying with a credit card instead of being limited to the cash in my pocket. 

You could say this was a wise purchase.  The price was pretty significantly better than normal, it takes little space to store and stays good forever, and we are 100% certain to eat this country ham.  Yes, I spent more today, but my family now has two easy weeknight meals at the ready -- without spending again. 

You could say this purchase was foolish.  The price enticed me to pick up something I hadn't intended to buy, and we certainly won't eat both packages of ham this week.  Not only that, but the ham pushed me to add a second item (biscuits) that wasn't on my list. 

See how the same thing can be interpreted differently?  Personally, I'm happy 'cause I'll have ham biscuits twice over the next couple weeks.   

frugaliknowit

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #59 on: May 12, 2016, 08:51:08 AM »
While I agree with Dave Ramsey about cash ON A LARGE SCALE, a good percentage of what I buy is online (and NO, I am not using a debit card on-line or for a freagin rental car or hotel room...), plus I do not even wait for the statement to pay my CC balance; I review money spent almost daily and transfer the money from checking to cc when I do, such that using the CC is similar to using a debit card (I forgo the float for the peace of mind of seamlessly staying on budget, then periodically scoop out the cash rewards).

However those with a history of chronic overspending WOULD be advised to go to the envelope system, in my opinion.

slugline

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #60 on: May 12, 2016, 11:09:08 AM »
Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

You're right, probably no difference.  The difference comes when when you become more aware of your spending because of the cash aspect.  Take a grocery budget of $400/mo as an example.  In your case, you go out and you go shopping with your card only buying only the stuff you need... no problem, and you'll probably stick to your $400 because you have that self control.  If you're a cash budgeter, you take out that $400 at the beginning of the month and say., " damn thats a huge stack of $20's.  How the hell do I spend this much on food?  I'll bet I can do $380."  That's at the macro level.  At the micro level, you're subtly making mini decisions throughout the month that are based on the actual visual of how much you have left in your category and feeling the pain as it goes out.  You're feeling the breaking of that $50 bill, you're feeling that end of the month crunch, you're asking if the auto parts store has a cash discount, etc.  When you're more aware, you're more frugal... try it out for 3 months.

I'd agree that awareness leads to frugality. I also believe that it's very possible to be aware of one's spending while using a credit card if a habit of regularly tracking expenses is developed. I get a great dose of  "active visual" just from viewing the numbers on my computer screen. Actually, I'm pretty sure that if I didn't track expenses I could mindlessly spend with cash too.

MrMoogle

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #61 on: May 12, 2016, 11:38:19 AM »
I had different phases in life. 

Before I got my first job, I was all cash.  I could tell you exactly how much money I had in cash at any time.  I still saved, but my savings rate was low.

After I got my first job, I was using cash and credit card.  One day I was looking at my expenses, and cash was a big part of it, and I tried to figure out what I was spending it on.  And I realized it was all on junk.  My savings rate was high (>50%), but had room for improvement.

More recently, I have mostly stopped holding onto cash.  Once I stopped, my CC bill didn't change, just my cash withdrawals stopped.  So for me, moving away from cash helped.  And my savings rate increased.

Later, I realized because of all the years I only had cash, and during that time I wasn't paying any bills, I had associated it with fun money.  But now, instead of a finite amount like I had as a child, it was infinite, I could always go to the bank and get more.  So when I wanted something I didn't need, I subconsciously asked myself if I had the cash for it.  Now, I don't have cash for it, so I don't get it.

So for me, credit cards are the way to go, and it would take more work for me to make cash to work like it did before I had a job.  Does this make me weak willed?  Maybe, but I don't need the willpower the way I do it.

dragoncar

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #62 on: May 12, 2016, 12:36:50 PM »
I stand by my 'Don't use credit cards!'  I don't care about all those points - those are earned on the backs of rising prices to pay for those perks as the store eats that extra percent.  I did notice a difference when I started using my bank card instead of those points cards.  It worked for me.

Your advice is to treat the symptoms, not the problem.

The symptom is that you spend more with a credit card.  The problem is that you appear not to realize that credit is your money, just like debit or cash.  If someone doesn't share your problem, your advice doesn't make any sense at all.

I thought this article was good regarding this topic:

http://www.moneycrashers.com/you-spend-more-money-when-you-use-a-credit-card/

How do you know that you don't spend more with credit than you do cash, honest question?

I'm sure I would spend less if I only used cash.  Using cash is a royal pain.  But that doesn't mean I'd be better off-- I'd actually be worse off.  I would miss out on making purchases that make me happy.  Because, like a good mustachian, I think about my purchases and only buy things after carefully evaluating whether it's really worth the money ( and time to earn that money).

So yeah, I might end up going to the grocery store and buying a bunch of junk food because I only have $5 in my pocket and can't easily get the cash out of my account for healthier food.  I saved money... Yay?

TLDR: spending less is not the end all and be all of financial independence
« Last Edit: May 12, 2016, 12:40:10 PM by dragoncar »

a-scho

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #63 on: May 12, 2016, 11:15:16 PM »
Ok, the whole credit card thing puzzles me. Here's the process I go through when I go grocery shopping (and have for years and years), and I want someone to point out which step would change based on using cash vs credit.

1. Make a list at home from doing kitchen inventory check, and reviewing weekly flyers.
2. Go to store and get the things on that list. Make brand substitutions for price whenever possible.
3. Get an appropriate volume of produce for the week, getting whatever vegetables are cheapest.

Anyone?

well when you have a credit card with 20k limit and not just the cash you need to buy that.  you also

1. buy a coffee at the starbucks on the way in
2. buy some fancy snacks they are advertising at the front of the store. 
3. impulse buy a new gluten free item in the gluten seciton
4. pick up a soda at check out
5. ooo and there is Kim kadrajfad;lfkja butt again i have to get that magazine.
6. and then you stop by customer service on the way out for lottery tickets b/c you can buy that with a CC in my state.

The credit card is not making you purchase those extra items, your brain is and you're using the cc as your excuse. If NOT using a cc is what it takes for you to not make the impulse purchases, then so be it. I personally wouldn't be buying any of them regardless of how I pay....but if I were to buy something, it goes on a cc cuz I want the 5% back I get with my sallie mae barclay card on all grocery store purchases. Even things like restaurants, fast food, movies, gas can be bought as a gift card from the grocery store at 5% off, with the credit card. Do I go to these places more often because of the discount? No!! But, when I do go, I pay 5% less than someone paying cash.

meyling

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #64 on: May 13, 2016, 12:45:05 AM »
Weird. I'm so used to using credit cards that it feels more 'real' to me than using cash. I tend to spend *more* when I'm using cash because my thinking is that it's already out of my bank account and so it won't make any balance that I hold change.

dragoncar

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #65 on: May 13, 2016, 01:07:28 AM »
Weird. I'm so used to using credit cards that it feels more 'real' to me than using cash. I tend to spend *more* when I'm using cash because my thinking is that it's already out of my bank account and so it won't make any balance that I hold change.

Does anyone keep track of cash on hand in their net worth spreadsheet?  For me, once it comes out of the atm it's effectively spent for my tracking purposes. 

kite

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #66 on: May 13, 2016, 07:30:47 AM »
We kicked the bulk buying habit, too, along with the warehouse club membership.  The 2008 financial debacle left us suddenly and unexpectedly with zero income.  We faced questions like:
Was it worth renewing the membership fee for the privelege of shopping at Costco when we don't know if I'll ever return to work?
Even though this is a good price, is it wise to spend cash we have now on toothpaste, toilet paper & tuna that we won't use for several months? 
Does the cost to run a freezer offset the savings from having stocked up on beef & chicken?

Money invested in the market can earn more money.  Money invested in consumables doesn't increase, but can drop to zero in the event of a flood or loss of power.  Hurricane Sandy had a huge impact, but it wasn't the only time in my life we had no electricity for a few days.  Everyone's situation is different, obviously.  But the answer to the questions above was "No" for us. 
We proved it with a pricebook.  The can't-miss-it deals on everything come around like clockwork.  Better for us to store the frozen foods in Aldi's freezer than ours.  Even things that can be stored at room temperature can get weevils or go bad if not used up in a reasonable time frame.  We buy only enough perishables that we expect to use up within the week, and non-perishable things we expect to use up within a month or so. 



slugline

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #67 on: May 13, 2016, 08:18:39 AM »
Weird. I'm so used to using credit cards that it feels more 'real' to me than using cash. I tend to spend *more* when I'm using cash because my thinking is that it's already out of my bank account and so it won't make any balance that I hold change.

Does anyone keep track of cash on hand in their net worth spreadsheet?  For me, once it comes out of the atm it's effectively spent for my tracking purposes.

In Quicken I use "Cash" as an expense category, not an asset account. So . . . not me, either! (When I deposit cash at the ATM I treat it as a "negative expense" back into my bank account.) I suppose if I ever decided to keep a large amount of cash on-hand, I might change this practice.

dragoncar

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #68 on: May 13, 2016, 03:05:13 PM »
Weird. I'm so used to using credit cards that it feels more 'real' to me than using cash. I tend to spend *more* when I'm using cash because my thinking is that it's already out of my bank account and so it won't make any balance that I hold change.

Does anyone keep track of cash on hand in their net worth spreadsheet?  For me, once it comes out of the atm it's effectively spent for my tracking purposes.

In Quicken I use "Cash" as an expense category, not an asset account. So . . . not me, either! (When I deposit cash at the ATM I treat it as a "negative expense" back into my bank account.) I suppose if I ever decided to keep a large amount of cash on-hand, I might change this practice.

Do you ever re-deposit cash you've withdrawn?  For me, any deposits are income, not negative expense

heybro

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #69 on: May 19, 2016, 12:08:19 AM »
I stand by my 'Don't use credit cards!'  I don't care about all those points - those are earned on the backs of rising prices to pay for those perks as the store eats that extra percent.  I did notice a difference when I started using my bank card instead of those points cards.  It worked for me.

My advice may be quirky but it works for me.  I still believe the starbucks advice is so overplayed and lame.  Everyone that says 'cut out the starbucks' to me, isn't living in my world at all.  I would never drink coffee, let alone pay five bucks daily for it.  Give me advice I can use!  That's why I dislike the starbucks line.

There's a hint of irony in this post. On one hand, you subscribe to the "no credit cards" rule because it works for you, despite the fact that pretty much any personal finance enthusiast would advise you to do the opposite. 

On the other hand, you completely dismiss the "no Starbucks" rule because you are so well versed in personal finance habits that it doesn't make a difference for you. "Give me advice I can use!," you say.

Well, here's some advice: credit cards provide you with much better security. That money you treasure so much in your checking account is a hell of a lot safer if you're making purchases on credit.

Think about it. Every time you pay with any card, you become a little more susceptible to a hack of some sort. If somebody hacks your debit card, poof, that money flies out of your checking account and it's quite difficult to get that money back.

Meanwhile, if someone hacks your credit card, your money is still safe. It hasn't gone anywhere. You execute a simple online form to dispute the charge and it barely caused you more than five minutes of stress.

I can speak on this from experience. While I was in law school, I was a victim of the big hack at Target. Poof, $390 and $470 gone from my checking account. It took almost two weeks to get that money back.  And just this year, somebody used my Amex to buy an $1,100 piece of fitness equipment. I discovered that on Sunday night and the charge was gone by Tuesday. And no money ever came out of my account. 

So, your perception of credit cards is flat out wrong. They provide a great benefit to protect the money that you value so much. Your increased spending with credit cards is a direct result of bad habits on your part, and has nothing to do with which piece of plastic you're using. You're couching it as "I can see a difference" and "it's psychological," when quite clearly you just need a mirror and some self-discipline.

I don't understand where you are getting this 'no self control' from?  Are you imagining me buying all this stuff on credit and instantly not buying it once I don't have the credit card?  That is not accurate at all.  I use a bank card that runs as credit so I get all the protections you just listed.  When I stopped a credit card (with all those points) that was not directly taken out of my checking, as compared to using only my checking 'as credit' card, this is what happened:  The $100-200 /year I'd buy on one or two things went away [the 200 bucks was even budgeted!!!!!].  This is because I always waited until I had enough in my checking (built up from monthly remains after sending the rest to investments).  Having to wait a month or two longer for the 50 bucks left over to accumulate to 200, meant I rethought things and didn't want it anymore. 

If you have any argument, it would be, that you can't base the idea of bank-credit-card-directly-from-savings vs. actual credit card *on* 200 bucks of savings; but it worked for me.  There is no 'wrong' here - just what works best.  I am not telling you to stop using your points card especially if it works best for you.  It didn't work best for me.  Live and let live.  Post all your great ideas on here and once anyone reads them, they can take or leave.  Don't tell me I'm wrong cause I am right for me and many others; as is your advice right for you and many others.

You act as if I went out and bought all this stuff and raked up debt.  That ain't true bro and you are being like white on rice on my little monkey behind.  Ease up on me bro - wow!
« Last Edit: May 19, 2016, 12:14:39 AM by heybro »

heybro

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #70 on: May 19, 2016, 01:01:51 AM »
Regarding 'self control' vs. 'psychological influence' on cash vs. credit.

Self control would follow the argument that on your way to buy groceries, you pick up a magazine cause you have a credit card and can spend it.

That has never been my argument for cash vs. credit.

If you think of advertising, it is a psychological influence that may not be known.  For instance, if you see an actor on the late show that is starring in the new movie plus your friend at work tells you the movie is good, then maybe, just maybe, when you are walking by the redbox at the grocery store, you think to yourself 'i still have 20 bucks left in my Entertainment budget for the year so why don't I spend the 1.29 on that movie everyone keeps saying is good.'  That psychological influence is not readily apparent but its come from many sources.  If you pay in cash, you may feel the *sting* just a little more of parting with the money (or maybe you only brought enough cash for groceries).  It is small, but it is no smaller than all those other factors added up to be.  It could just deter you.

Self control makes it sound like the money wasn't budgeted, but it was.  You could end up only spending 10 bucks on entertainment for the year instead of 20 by using cash.  I have found it to be small; but real.  Maybe since my numbers are already so small, it wouldn't show up that much on a bigger budget, but for mine it does.

Just my experience!

former player

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #71 on: May 19, 2016, 03:47:07 AM »
I volunteer as a mentor in a program helping mostly young people as part of their jail release and probation.  I have found that a 20 year old just trying to get through life sober really has no concept of retirement.  However, they do understand freedom.  When I am giving them money advice, I tell them that their money can either buy stuff or buy freedom.  Freedom from a dickhead boss, freedom from bill collectors, freedom to make decisions because "want to" not "have to."
This is great.

The only thing I would add is: the same thing applies to staying within the law.  If you are not committing crimes, you are free from the police, free from the courts, free from jail.  You can exercise your right to keep the cops out of your house, to drive without being pulled over, to walk down the street not needing to look out for trouble from a passing cop or answer their questions if they do stop you.  It's freedom.

boarder42

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #72 on: May 19, 2016, 07:12:18 AM »
your advice on both of your posts has been very closed to a very small sample of people who could benefit and greatly contradicts the views of many in this community so if your statements

1. Stopping starbucks won't make you rich
2. Don't buy in bulk b/c you'll eat more
3. Don't use a CC b/c you're going to spend more

weren't combatted by many in the community, a new person on the site may think these things are what they should be doing when, these are all basic concepts of mustachianism, so much that there are blog posts directly related to each one.

1. http://www.mrmoneymustache.com/2011/08/01/a-millionaire-is-made-ten-bucks-at-a-time/
2. http://www.mrmoneymustache.com/2011/08/23/grocery-shopping-with-your-middle-finger/
    a. see "know the right price" section
3. http://www.mrmoneymustache.com/2012/01/23/gaming-the-system-with-rewards-credit-cards/

you have to decide whats right for you but these are pretty basic things around here.

CatamaranSailor

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #73 on: May 19, 2016, 07:50:47 AM »
Not strictly financial advice, but it has definitely had an impact on my ability to earn a living as well as my self confidence in the world: This is paraphrasing a bit, but Dan Miller writes that no matter what type of employment situation you are in, you must also look at yourself as a service provider. If you are a traditional "employee" you are providing a service to a single customer. If you are a freelancer, you may provide a service to many customers.

Which one is more dangerous? Having a single customer who might suddenly decide they don't need you anymore, or many customers (if one decides they hate your guts, you still have the others). 

Someone mentioned "Rich Dad, Poor Dad" which talks about this as well.

As a result, I've always had side gigs and have never been dependent on a single employer. I've also learned a ton of different (marketable) skills, any one of which could keep my family and I clothed and fed.

Maybe more of a mindset shift than straight advice...but one I believe in wholeheartedly (and obviously what this site is about at it's core).

"Credit cards vs Cash" or "Pay off the mortgage" vs "keep the mortgage and invest" are fun topics to debate, but ultimately confidence about your own abilities to survive and thrive, no matter what the economy is doing is what it's all about for me. That's what Dan Miller and MMM are giving me, and I'm so absolutely grateful grateful for it.

Giro

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #74 on: May 19, 2016, 08:17:04 AM »
I spend more with credit cards but I would say that it is beneficial for me and my standard of living.  If I only have cash (I don't bring my purse to work, so I usually only have a few bucks on me) I can't buy anything at all.  It forces me to sacrifice and to me, that's worse.  I don't want to sacrifice. 

I recently went out for drinks with some colleagues that I haven't seen it some time.  I VERY SELDOM go out with colleagues...we are talking twice a year and I NEED to maintain networks in my career field.  I went straight from work so I dug thru my car and cleared out my desk and rounded up 18 bucks.  I ordered a cheap appetizer and a glass of wine.  I wanted to have another glass but knew I didn't have enough money.  Did I "save" money?  sure, but at what cost? 

Most folks on here aren't blowing money because they use credit cards.  But, I can see how having only cash decreases spending.  The ham example is perfect.  I find things on sale/clearance at the grocery and will stock up.  I wouldn't be able to do that if I had a limited amount of cash.  The other day I found my brand of protein shakes on 80% off clearance.  I bought all they had. 





LawMMMan

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Re: BEST Advice You've Heard OR Discovered!!!
« Reply #75 on: May 20, 2016, 10:56:01 AM »
Marry someone who has a decent work ethic and is compatible with you.  Divorce is pricey and those who 1/2 their assets 1-4+ times don't have an easy road to retirement.  Choose very wisely!  If he/she has their stuff together, that sure helps out A LOT!