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CHANGELIFE2016's Photo CHANGELIFE2016 Posts: 345
8/21/12 6:16 P

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I've worked for 3 wealthy men in my life. they were all millionaires.

All of them were older men in their 60's. they were all the cheapest people i've ever met. That didn't replace anything till they had too. i never saw their houses but that's how they ran their businesses. They also were kind of jerks too but that's another story. LOL

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CELTICMELODY's Photo CELTICMELODY Posts: 1,829
2/20/12 9:59 A

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I didn't do a percentage of my salary. I added up expenses from last year.

For the Medical/Health care account, I put in the amount that my eyeglasses and doctors office visits would cost. You could use your health plan deductible if you have one. I had to be careful here because I put this money in my healt care flexible spending account. So, I lose whatever I don't spend. $1200

For my car repair fund, I added up the cost of dealer recommended vehicle maintenance (oil changes, transmission flush, plus cost of new breaks. $1000

Xmas fund: I put in $300, The adults in my family don't exchange gifts anymore. So, add up whatever you allocate for holiday spending per person. Don't forget to add in a little extra for the electricity bill for those that put out holiday lights.

For the furnace/air conditioning service, I put in last year's figure + 10%. $435

Emergency savings: $10/week to start out. One thing I want to point out. If you have trouble with getting money for an emergency savings account, putting aside money each week is easier that waiting for the end of the month. It was advice someone gave me, and I found it very helpful.

Kim

Definition of insanity: doing the same thing over and over expecting different results


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PRINCESSAA12's Photo PRINCESSAA12 Posts: 467
2/18/12 11:25 A

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Hi Celtic,

I agree with you about the money worries and stress. They can really make me sick, if not phisically, emotionally at least.

Newfador,
I think I will need one for medical and gifts. I like your idea of lumping.

Now I'm not sure what percentage of my salary goes into what account. What do you guys do? How much do you allocate for each jar? Mind sharing your jars with me? if you're using jars.



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CCNEWFADOR's Photo CCNEWFADOR Posts: 670
2/17/12 3:36 P

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Princessa - emoticon emoticon

Hugging you back and one for the great statement about support. For the jars - well 13 does seem excessive but not sure if 2 enough. Like lumping medical & gifts together - the medical you need to pay bill but a gift the cost is more negotiable.

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CELTICMELODY's Photo CELTICMELODY Posts: 1,829
2/17/12 11:05 A

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You are welcome.

I agree that support is most helpful. As a former banker turned registered nurse, I have come to the conclusion that money worry and stress causes more chronic illness than anything else I've encountered.

Keep asking for ideas, we'll keep churning them out.

This helps me too.

Definition of insanity: doing the same thing over and over expecting different results


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PRINCESSAA12's Photo PRINCESSAA12 Posts: 467
2/17/12 12:52 A

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Ok I've started jars for now. When I listed everything down, I had 13 jars at first. Here they are:

Debt
*Mortgage
*Domestic Worker (I have a domestic worker to look after my babies)
*Sch Fees
Kids Savings
Emergencies
*Household Marketing
Give (for birthday gifts -always broke when it comes to birthdays)
*Transport
*Medical (one kid or the other seems to fall ill every now and then)
Home Repairs
*Bills
My personal jar (for my own expenses)

13 really seems too much for me to handle. And most of the items above (those with an * are things that I HAVE to pay for every month no matter what). So I would still pay them whether I have jars for them or not. So I decided to just focus on 2 jars for now to get me started. I've got one for Debt (I've renamed it as Recovery as I really don't like the word debt) and another for emergencies. So 2 jars: Recovery and Emergency

How am I doing? Anything I need to add on? And am I doing the jars right?

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PRINCESSAA12's Photo PRINCESSAA12 Posts: 467
2/17/12 12:44 A

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OMg you guys are so smart! I love your ideas. That one about 10% and the loose change too! Can I like HUG you guys??? *HUGZZZZZZZ* Love you people! I'm so excited. I think i can do it. Support is a magical ointment to any ailment!

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CELTICMELODY's Photo CELTICMELODY Posts: 1,829
2/16/12 12:45 P

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OOO. That reminds me:

Another suggestion I heard was to set aside 10% of whatever you spent that day.
e.g. If you spent $200 on groceries, put in $20. $50 bucks on gas? Put in $5. You get the idea.

This requires saving receipts and/or writing down what you spend in a little notebook - which in and of itself could lead to savings.

Not too mention that with prices on food and gas going up year after year, it's good practice.

Definition of insanity: doing the same thing over and over expecting different results


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CCNEWFADOR's Photo CCNEWFADOR Posts: 670
2/16/12 12:11 P

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Not much money but a couple of ways to build up a an emergeny fund....

If your state has returnable bottles but all that money right into the fund; same things with all savings from coupons and rebates. And then the loose change collection - put it into a container and then move it over to the fund.

The loose change when is my favorite - I use to accumulate $50 a year (not including some times it got refiled for quarters for meters & such) and then it got split up for my 2 daughters to have spending money for vacation.


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CELTICMELODY's Photo CELTICMELODY Posts: 1,829
2/16/12 11:20 A

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Good for you! I'm gload to help in any way I can.

Re: An emergency fund, Liz Pullam Weston, columnist for MSN Money, wrote an article a couple of years ago called, "Why You Need $500 in the bank." which is a great article.

I know I mentioned creating a "credit card use prevention fund" account in a previous post that involved making amonthly payment to this "fund".

But, you might consider making an automatic WEEKLY payment to a savings account. $10 a week is $520 in a year - $20/week is over $1000 which is the emergency fund that Dave Ramsey recommends.

I know when things are tight, it can be hard to find the extra money. But, think of it this way - things happen and you need to get the money somewhere. What would happen if your credit card companies kept lowering your balance so that you COULDN'T use the card to pay for that emrgency car repair or emergency room visit? That's happened to alot of people including me.

So, when that happened, getting cash into a small emergency fund became a priority - as in an eat beans and rice, and peanut butter sandwiches kind of priority.

Definition of insanity: doing the same thing over and over expecting different results


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PRINCESSAA12's Photo PRINCESSAA12 Posts: 467
2/16/12 10:49 A

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There's a lot of information here. Thank you friends. Looks like I have to go and check the books you've mentioned. I think I need to first build an emergency fund. At least then, I won't keep panicking everytime someone falls ill or an unexpected expense comes up.

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CELTICMELODY's Photo CELTICMELODY Posts: 1,829
2/14/12 3:33 P

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Also, in Stop Acting Rich, Stanley says that millionaires haven't really lost alot of their wealth in the economic downturn. Why?

The have no more than 30% of their wealth tied up in their home and no more than 10-20% of their wealth in the stock market. "The ycan't control the stock market," as he says but "they can control their businesses, private investments, money they lend to private parties etc.

Contast that to most of us where 100% of our wealth is our homes (which have lost value) and the stock market (mostly in 401k mutual funds which have also tanked) and you an see why the majority of us aren't rich.

I'd like to start a business of my own, but I'm not sure what.

Edited by: CELTICMELODY at: 2/16/2012 (11:09)
Definition of insanity: doing the same thing over and over expecting different results


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CELTICMELODY's Photo CELTICMELODY Posts: 1,829
2/14/12 2:21 P

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Hi Princess:

Me again.

I have some relatives that were beyond dirt poor to abject poverty and pulled themselves up to be what some would call rich.

You may or may not have heard of Thomas Stanley and William Danko, the authors of The Millionaire Mind. They studied Decamillionaires - people worth 10 million dollars or more - and their traits.

Based on what I read in The Millionaire Mind and what I've observed from millionaire's that I know. Here's what I can say:

They live WAY below their means and spend their time, energy, and money in ways to accumulate true wealthy not things. They believe financial independence is more important than impressing people. In other words:

#1) Most of them made it themselves.
#2) They live in the same small house that they had when the first started out. And,m it's a small basic house. They didn't upgrade to a McMansion. Many of them live in blue collar neighborhoods and their kids go to public schools.
#3) They drive a middle of the road American made car. Think Buick Skylark or Chevy Impala not BMW or Mercedes. Sam Walton drove a basic pick up truck.
#4) They started their own business. And, it's not something fun, or sexy either. It's basic stuff: toilet paper, retail (WalMart anyone?), car repair, domestic shipping (Old Dominion Freight Lines), etc. And, when they DID have a business, all the profit went back into the business. They paid themselves a small, regular salary.
#5) They don't provide outpatient care to their adult children. And, they all made it on their own steam.
#6) You aren't going to catch them watching every TV show that comes down the pike either. I guarantee you none of them have seen The Bachelor or American Idol. Lady Gaga who?
#7) They don't use their house as a bank. Their house is shelter.
#8) They choose the right occupation. Teaching ain't gonna get you there. They invest heavily in their children's education and recommend occupations such as accounting and law to their daughters.
#9) They are real tightwads when it comes to spending money on themselves. They shop Walmart and clip coupons etc.

It boils down to look at whatever you see celebrities do, and don't do that. They tend to wind up broke anyway. Unless you are Clint Eastwood, Bill Cosby, or Denzel Washington who took their earnings and created businesses.

If someone truly wants to not only get out of the debt trap, but become financially independent, I strongly recommend two books:
Stop Acting Rich and Start Living Like A True Millionaire by Thomas Stanley.

and

Your Money or Your Life by Vicki Robin

I reread these constantly.

Definition of insanity: doing the same thing over and over expecting different results


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FISHING88's Photo FISHING88 Posts: 3,156
2/14/12 2:14 P

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Read The Richest Man in Babylon by George S. Clason. It would have been best if we had read it when we were all 18 years old! Encourage young people to read this book as they graduate from high school and start their independent life.

CCNEWFADOR's Photo CCNEWFADOR Posts: 670
2/14/12 1:55 P

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Alot of the rich have attorneys, accountants and trust fund trustee that actually watch their money for them and invest it into growth opportunites. The rest of us need to have willpower to save up for things and reuse/recycle alot of things so that we can get a handful of money to put into investing.

Seriously the key is to figure where all the money is going and what/where can you cut back and stick to the plan.

Me = I need more willpower which explains why I am overweight & poor.

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PRINCESSAA12's Photo PRINCESSAA12 Posts: 467
2/14/12 10:57 A

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Any answers? I just suck at managing money.

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