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| Im Not Warren Buffett |
 Posted: Sat Feb 18, 2006 7:37 pm Post subject: Compulsive Spender |
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CFO
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As I mentioned in another thread, I was adding up the damage to my bank account today and the results were... disturbing to say the least.
I need to know: What makes one a compulsive spender? If you were to be spending, say, $100 a week and you didn't know where you were spending it, would you be concerned? Am I just retarded?
One of my fondest memories of childhood... ok, more like two weeks ago, was geb9696 betting me I couldn't go two weeks without making an impulse buy. The conversation went something like:
Me: "Ok, starting next week."
Him: "Why not starting now?"
Me: "What if I want to buy something today?" |
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| vetelmo |
| Posted: Sat Feb 18, 2006 8:27 pm Post subject: |
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Moderator
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| Oh Im the same way. Money here today, gone tomorrow. Imulses kill me when it comes to money. |
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| CJ. Wentworth |
| Posted: Tue Feb 28, 2006 5:27 pm Post subject: |
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Investing Sr. Associate
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Lol, $100 a week is a bit worrying. Last year however I seemed to misplace $10,000
Ultimately ended up paying for Uni. A computer, a Phone and a new TV. |
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| gensalesguy |
| Posted: Tue Mar 28, 2006 8:42 am Post subject: Re: Compulsive Spender |
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| Im Not Warren Buffett wrote: | I need to know: What makes one a compulsive spender? If you were to be spending, say, $100 a week and you didn't know where you were spending it, would you be concerned? Am I just retarded?
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My wife seems to spend $250 a week and cannot show me where it went until I look at our credit card statement and see OH The GAP, Toys R'US, Tiqi Taco, Tawnies palce, Nails etc.....
Oh but I needed it. Uh-HUH yeah right. |
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| Im Not Warren Buffett |
| Posted: Tue Mar 28, 2006 2:47 pm Post subject: Re: Compulsive Spender |
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CFO
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| gensalesguy wrote: | My wife seems to spend $250 a week and cannot show me where it went until I look at our credit card statement and see OH The GAP, Toys R'US, Tiqi Taco, Tawnies palce, Nails etc.....
Oh but I needed it. Uh-HUH yeah right. |
Take away the credit card and score a blow for male equality.
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| emkie |
| Posted: Wed Mar 29, 2006 7:00 am Post subject: |
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Investing Sr. Associate
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I've never really been a compulsive spender, although I know so many.
Growing up, we always had budgets to help manage money and one thing I was taught at an early age was to compare prices from several different stores and do your homework before buying anything so that you know you are getting the best possible deal for the best quality. The internet makes this so much easier now!!
I'm very thankful for have being taught this, because it helps so much. Many of my friends don't even realize how much money is going out. It's sort of ridiculous at the end of the month when they wonder where their money went when they buy buy buy  .
My suggestion would be to keep all sales receipt and immediately record them when you come home or on a specific day of the week. It really helps when you do it shortly after you have bought an item. I also will not carry credit cards on me, they're put away at home so I cannot be impulsive.
If I do have children, this will definitely be high on the priority list because prices are only rising in our current economy. Learning how to handle money is paramount to a person's ability to survive. Now, if I could only learn how to invest better.  |
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| Im Not Warren Buffett |
| Posted: Wed Mar 29, 2006 9:58 am Post subject: |
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CFO
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| emkie wrote: | | Growing up, we always had budgets to help manage money |
I try to keep a general limit on my "discretionary" spending to about $50/week, but I always find a way and reason to go over it. Last week I took my girlfriend out to dinner, so that was almost $40 right there. I still did everything else like usual though, so I ended up spending about $80. I basically do that every week. Budgets have no power over me.  |
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| nngreen |
| Posted: Thu Apr 06, 2006 1:23 pm Post subject: |
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| I'm an emotional spender. I spend when I'm upset, shopping tends to take my mind of the problem. The worse part is it ultimately creates a bigger problem in the end. |
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| frusnak |
| Posted: Thu Apr 06, 2006 1:54 pm Post subject: |
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CFO
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Living on a budget is the way to go. Two of the most powerful and richest people in american history, Henry Ford and J.D. Rockefeller were really strict in there habit of keeping track of the money!!  |
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| investment |
| Posted: Fri Apr 07, 2006 12:21 am Post subject: |
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Investing Sr. Associate
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| I am a spender also. My philosopy is "dont think of how to save money, think of how to earn money: |
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| Dave Rathbun |
| Posted: Fri Apr 07, 2006 2:16 am Post subject: |
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CFO
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| investment wrote: | | dont think of how to save money, think of how to earn money |
But you have to earn twice as much to make up the difference.
I read an article one time that was quite the eye-opener. I imagine that most of you reading this have heard or even used the phrase, "A penny saved is a penny earned." Well, this article was written around the concept that in order to actually earn a penny you have to make two pennies.
Has anyone heard of "Tax Freedom Day"? It's the day that determines when you finally start earning money. (These statistics are for the US, I have no idea how the tax system works in other countries.) When you get a paycheck, there are certain amounts removed from your check before you even see it, primarily income tax. Tax Freedom Day is determined by the number of days that you have to work in order to earn what you need to pay off your tax, in full.
Suppose you earned 2000 a month. And suppose you owed 7000 a year in taxes. That means that 3.5 months of your salary are required just to cover your tax obligation. After working for 3.5 months, you are now "free" from taxes, thus the name.
Tax Freedom Day was calculated as being June 3 in 2005. That's nearly half of the year! Again, this means that (on average) people work until the beginning of June just to be able to pay their taxes, and after that they start having money for food, shelter, and savings. Now of course it doesn't work this way, you don't pay all your tax up front, but it's quite educational to see it put in those terms.
So back to the savings rate. When you have to work so hard just to get over the tax hump and start getting money for yourself, doesn't it make it more obvious how much better it is to save some money for yourself when you can? Every penny that you don't spend (meaning save) is a penny that you don't have to earn. And since you have to work nearly half the year before you get any money for yourself, that means that you have to earn two cents for every penny to yourself!
Makes that $5 latte seem a lot more extravagant when you consider it really costs $10, doesn't it. 
When you save, your savings goes to work for you, earning you more money. When you save, you have money when you need it, instead of jacking up your credit card balance and paying 18%. We've probably all read stories of the school janitor that died with an $18M estate, you don't need to live like a hermit and horde every penny in order to enjoy life. But I would have to say that finally learning how to save (and plan for spending) is one of the top five life-changing events in my life.
So remember, a penny saved is two pennies earned.  |
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| poornewb |
| Posted: Fri Apr 07, 2006 4:50 am Post subject: |
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Investing Manager
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Ever read "The Millionare next door"?
The Whole tax thing is Why my goal is not to SAVE alot but to become a successfull business owner, And then get all the tax cuts, credits and write offs that I can! Theres a reason the rich get richer and the poor get poorer. Just SAVING your money in say a bank savings account is a bad bad idea. Unless your saving a million a year but hey who has that kinda money and just puts it in the bank?
Instead of thinking "how to earn money" Just figure out how to get the money that you do have to "WORK FOR YOU" and not the IRS. |
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| Dave Rathbun |
| Posted: Fri Apr 07, 2006 5:13 am Post subject: |
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CFO
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poornewb, there is a lot of value in what you say. I had intended my post to be a way to show the "true cost" of not saving, as in my opinion it's higher than many people realize. Owning a business, making your money work for you, those are all great ways to get ahead.
In other words, I was not trying to imply that savings are the only thing you need to consider for retirement. Just that the cost of not saving is greater than the difference between spending and saving. In the choice of spending $5 for a latte versus $2 for a cup of coffee that $3 has a value greater than $3. That's the point I was trying to make. |
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| MrT |
| Posted: Fri Apr 07, 2006 7:25 am Post subject: |
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Investing Sr. Associate
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I have to disagree with the advice for the average person to go out and start a business. I agree that starting a small business can be a great way to make a gigantic return on investment, but that's just the average. The fact is that virtually all business start-ups are high-risk ventures, and sure, on average, you will make more money than MMA's, CD's, stocks, whatever. But that's just the average, which means that a certain percent of business' fail completely and all that money invested is lost. (Anyone know the numbers, 20% of small business' fail maybe?).
Unless its possible to start your own business without putting a lot of your own money or credit on the line, I'm still gonna think its a high-risk venture that I would advise people only take on when they have money they can potentially afford to lose + a fallback plan + plenty of time and patience to turn a profit.
In general, unless you are prepared for the possibilty that you can lose everything in your business and a year+ of time and energy that you could be using to work towards a promotion or another job, starting your own business is not a good idea. I think that is the case for many people, who might have a good idea or would love to work for themselves, but are unwilling to risk such a large sum of money, even if the chance of failing is low. |
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| TimeInvestor |
| Posted: Fri Apr 07, 2006 11:30 pm Post subject: |
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Investing Associate
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i would suggest joinin mlm company first before setting up a company.
mlm is also like setting up company with low cost. |
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