2 books that got me starting to think about the basics and motivated me to learn more are Rich Dad, Poor Dad and The Richest Man in Babylon. Those are easy reads. If you’re looking for something broader based, with great detail and something that will really change the way you think about money then I strongly recommend Ben Graham’s (Warren Buffet’s mentor) book: The Intelligent Investor.

-=[OMF]=-

I love these basics articles because they just reinforce and remind me of what I need to do to stay above water. Fortunately, I’m doing okay, though I suppose I could be doing a ton better. One step at a time, I suppose.

I’m sure there are some features on my site you might find useful for here (i.e. Frugal Friday), and I’d love to have some suggestions, if you have them, from one foodie to another.

And, finally… Tag (check out the website link… would make a good post to talk about the man behind the curtain).

POSITIVE REINFORCEMENT!

I heard once of someone motivating themself to keep their checkbook balanced by putting “Atta Girl!” and “Great job!” and “Way to go!” stickers all over the outside of their checkbook.

It’s so easy to berate yourself when you are trying to change a habit. Over the long term, most people respond better to praise than to punishment (managers and parents, take note!)

Where is all this STUFF that people sell for hundreds of dollars? Do they sell their kitchen table (got mine for $20 many years ago) or similar things?

I don’t have toys! Really, I don’t!

She could volunteer at her local symphony, ballet, opera, the zoo, botantical gardens, or museums. Things that are social to replace the social activities that she can no longer afford. It’ll get her out of the house, not cost her money, and she’ll learn something and enjoy herself in the process. Our baseball stadium has volunteer positions. You get to see a baseball game for free for stopping people from walking up and down the isles when the ball is in play.

Just a thought.

But for people who just feel overwhelmed by their disappearing paychecks, I think setting simple rules, like the 10-sec. or spending fasts, work better.

If you already feel hopeless about money, doing a detailed self-assessment will just make you feel worse.

I for one stayed away from money planning like the plague. I didn’t understand it, but I also didn’t want to. It takes a certain mental discipline to sit down with the pen, paper & calculator, and we don’t all have it. It’s better to start after a small victory.

Cooking is easier to justify as an expensive hobby, because we need food more often than clothes, but it certainly can be just as costly to have gourmet skills as it can to have designer tastes. When I made a commitment to frugality, I also made a commitment to Ramen noodles and Michelina frozen dinners.

I think the most important first step is writing down everything that you spend. And then you take stock and see if there’s anywhere you can easily cut expenditures (e.g no more movies), make hard cuts (e.g. move to a cheaper place/get a roommate) or if you should start looking for a new/second job.

I’m also curious about how Tessa lives with no credit cards and no money for the last 2 weeks of the month? If she’s taking payday loans and paying those fees/interest rates, that could explain how she can never get ahead.

I don’t like the solution so much since my wife and I both take from our “envelopes” and so it’s hard to keep track of.

Just yesterday I thought of an online solution I’m going to try.

We funnel most of our purchases (gas, groceries, etc) through our credit card for the rewards and then pay it off at the end of the month. We get 1% or more toward our sons’ college fund. So all of our dips into the envelopes are being tracked.

I’ve been playing with mint.com. It doesn’t do everything but it let’s you set up budgets with e-mail reminders. I’m going to set just a few budget items (like groceries) and have mint.com e-mail me (and my wife) when our “envelope” drops to 80%

I don’t know if it will work, but it’s worth a try.

80-10-10
——–

ghogiel,

Those are good general comments on the emergency fund – thanks! Makes me feel better.

An 80-10-10 is a mortgage strategy in which you make a 10% downpayment on a house and then immediately borrow another 10% using your first 10% as collateral. This usually takes the form of an equity line of credit. You then take the borrowed 10% and use that to increase the total downpayment on the first mortgage to 20%.

So what you end up with is a first mortgage of 80%, a second mortgage of 10%, and it cost you a 10% downpayment out-of-pocket. Plus all of your house tied up as collateral for the loans.

You might ask, “Why in the world would anyone do such a thing?”

In the states, if your downpayment is less than 20% then you must also buy mortgage insurance. I don’t remember the exact cost, but I recall that it was more then the total interest on the second mortgage – much more if you pay off the second mortgage fast.

Of course, it’s better to save up a 20% downpayment to begin with. But we had the 10% and were about to start better jobs where we knew we could pay off the second mortgage fast. At the time, interest rates were low and so we jumped.

Perhaps you should take a leaf out of Ramit Sethi’s book and make a ‘directory’ post with links to your best and most useful posts.

Example When he gains new readers from somewhere, he just has to post that list and it gives them a great starting place.

Oh, and I plan my grocery shopping and weekly menus. Food can add up!

Pretty much I’m in the same boat as you are.
No, I do not think what you (we) are doing is wrong. There’s nothing wrong w/ viewing the Extra Repayment on Mortgages as an emergency fund, (providing it’s got good liquidity that you can make withdrawals anytime

The way I see emergency fund is nothing more or less than just another asset, except that it’s:
- low risk
- high liquidity
- dont care about yields (it’s emergency anyway !)
- preferably: low on costs (bank fees or.. taxes)

ING Direct fits all four attributes above… except that (in my case) the extra repayment on my mortgages offers more: interest from ING is taxable. Suppose ING’s interest is 7% and the government takes 30% of it (mid-high range bracket in Australia), the nett is 7% * 0.7 = 4.9% interest only.

So for me~ rather than having to receive a smaller interesets on savings, I’d rather have my money in the mortgage account for the following reasons:
- it offsets the loan interest.
- i agree w/ you on the liquidity, my mortgage extra repayment has the same liquidity as ING (=high liquidity, good for emergencies)
- dont have to pay for the taxes. Let the taxman asks for it from your lender instead !

Yes, I am pleased if you care to explain more about 80-10-10, Sammy — I’m from Australia and have no knowledge of that lingo.

We bought our first house about three years ago. It occurred to me one day while I was putting my monthly “emergency” fund into ING that I was still paying interest on a home equity line of credit that we opened when we bought the house. (We did an 80-10-10 mortgage – which I can explain if anyone cares).

I decided to empty my ING account to pay down the equity line of credit. Now my “emergency” fund goes into the equity loan. A couple more months and that will be paid off and we’ll start on ING again (or maybe pay extra on the first mortgage).

I consider the equity line of credit as my emergency fund since it’s as fluid as the ING account. I can transfer the money back to checking at any time.

Does anyone see anything wrong with
this strategy?

I’m actually “earning” more because the interest on the credit line is a little higher than ING.

Thanks
SammyG

Another time the Wife decided she wanted pancakes for breakfast and since pancake mix costs a fortune over here we decided to make it ourselves, easy as pie, why did I spend years buying pancake mix (needs only water and an egg). Never again

Also for shopping start using a price book (basically a list with prices noted) it should help shave 10-15% a week off your food budget.