Money and costs.

Jayco-noslide wrote:
To me there is no "smart debt". All debt is delaying the payment for something you can't afford to pay for. Actually, a home is as close to "smart debt" as most of us can get. I understand the reasoning behind having a loan at 3% and and investment at 7% and not taking the money out of the investment but still better off to use the payments going to pay off the loan to build up cash to buy something with rather than borrow. Then you can earn money on the cash saved and save on eliminating interest. Debt free isn't always possible but it is an attainable goal that pays big dividends.

X2!

In reality, the word and meaning of "debt" is the SAME as a servant or slave.

You can easily substitute the word slave for debt.

When you borrow the LENDER becomes YOUR "master" and you the BORROWER become a slave to the master until you fulfill the terms of the loan.. Once the terms of the loan has been met (IE payment in full including interest) you now become FREE of that master..

Most folks have no concept of the difference between "NEEDS" and "WANTS".

NEEDS are the basics like Food, Shelter, Clothing, BASIC transportation.

Within those needs you have things like rent/mortgage, water, electric, taxes, medical or any other expense that simply happens just to keep you alive..

WANTS are those things above and beyond the needs are not necessary to life..

Wants are things like expensive sports cars, fully loaded trucks/SUVs, cellphone(s), Internet, extravagant expensive housing, RVs, Boats, $7 coffee every day, $50 lunches everyday, $50 a plate dinners every night and anything else that is not needed to live.

YES, I realize there are times when debt IS necessary such as buying a house within your means or a vehicle within your means.. Those are things that often we simply do not have enough cash or income to buy outright.

I wish I could post some links to a free three part series on managing money.. I can't since it is from a "Biblical" perspective..

It really has some great tips on how to live life while keeping your debt (what you owe to lenders) to a minimum..

Some great tips on how to BUDGET (yeah, that bad six letter word know body likes)..

Take a challenge, for ONE month, write down EVERYTHING you buy, how much it was and what it was. Include housing, utilities, food, recreational and so on..

You WILL be shocked at the results of where you money truly goes..

Once you have tracked where every penny goes you can now decide what is NEED and what is WANT..

You really have to be HONEST and decide if some or all of your wants per month are more than what have AFTER the NEEDS are paid.

A great tip I heard was to take out enough cash to pay for basic food, clothing, medical, transportation (fuel/maintenance), OTHER (emergency or splurge).

Divide that cash according to your average costs per month for each of the above categories and place into envelopes marked for those needs..

The other money that is not drawn for cash is set aside to pay rent/mortgage, insurance, electric, taxes, ect.

Now, when you go shopping you buy only up to the amount in the envelope.. Once the cash is gone you then stop spending..

What you will find is you now do a BETTER job spending your money by spending it wisely.. Some categories may empty and some may have leftover.. Any leftover simply rolls into the next month and eventually you will have some growth..

Gjac wrote:

JAXFL wrote:
I have a way to measure time that is really scary. Go get your measuring tape and a pare of scissors...now pull out 85 inches of tape and lock it there. Now match your age in inches to the tape. (example if you are 65 years old mark the 65 inch mark) now take the scissors and cut the tape off at your age...and throw it away... what inches that are left is what the government says you have to live.... enjoy what inches you have remaining.

That is a good word picture, but just remember in order for the gov't to come up with those actuarial tables(which are based on averages)some live longer and some live shorter the only problem is we don't know which path we are on.

If you pull out the tape to 85 inches and you died before that...don't bother with the rest of the example.....;)

JAXFL wrote:
I have a way to measure time that is really scary. Go get your measuring tape and a pare of scissors...now pull out 85 inches of tape and lock it there. Now match your age in inches to the tape. (example if you are 65 years old mark the 65 inch mark) now take the scissors and cut the tape off at your age...and throw it away... what inches that are left is what the government says you have to live.... enjoy what inches you have remaining.

That is a good word picture, but just remember in order for the gov't to come up with those actuarial tables(which are based on averages)some live longer and some live shorter the only problem is we don't know which path we are on.

I have a way to measure time that is really scary. Go get your measuring tape and a pare of scissors...now pull out 85 inches of tape and lock it there. Now match your age in inches to the tape. (example if you are 65 years old mark the 65 inch mark) now take the scissors and cut the tape off at your age...and throw it away... what inches that are left is what the government says you have to live.... enjoy what inches you have remaining.

I think of it sort of like smoking and being overweight. You need a mindset to fix it. Although I agree with the philosophy of good debt, I can't let my mind cheat that way...whether I'm money ahead or not.

Now...if I can only be so disciplined when my wife comes around with the cookies tonight.

Jayco-noslide wrote:
All debt is delaying the payment for something you can't afford to pay for.

I don't black and white agree with that.

Some debt may be due to delaying the payment for something you don't want to pay for at that time ... regardless of whether or not you otherwise have the means to pay for it at the time you take possession of it. :)

To me there is no "smart debt". All debt is delaying the payment for something you can't afford to pay for. Actually, a home is as close to "smart debt" as most of us can get. I understand the reasoning behind having a loan at 3% and and investment at 7% and not taking the money out of the investment but still better off to use the payments going to pay off the loan to build up cash to buy something with rather than borrow. Then you can earn money on the cash saved and save on eliminating interest. Debt free isn't always possible but it is an attainable goal that pays big dividends.

winnietrey wrote:
In my opinion, some folks save every dime, and others spend every dime. The middle ground is the harder course. I will trade money for time and experiences every time. The times we have had in our RV, the things we have seen, the places we have been and taken our GD too. How do you put a price on that?

On a everyday approach, as we are older now and better off money wise, some things we have been able to enjoy. As a result

I never go to flying J's, to hard to get in and out of. Don't mind paying more for gas at a less busy place

Don't care really what the campsite costs, as long as it has a pool for the GD.

Don't care about spending money to do fun stuff or buy a souvenir.

I am very aware the clock is ticking, we are getting older and these times will not come again.

winnietrey .... very well put indeed!!

I have a couple of related comments:

- It'll take several more months to pay off our credit card from last fall's wonderful 7000-8000 mi RV trip where our spending was pretty much unbridled. The trip would have been a lot different had we used a "no debt at any cost" approach during this trip. As a result it was a once in a lifetime experience using temporary credit - including a ZIP line ride way above a canyon!

- Regarding the "I'm spending the kid's inheritance" approach to unbridled spending of one's resources during the last of their active years ... the DW and myself have cared for two loved ones as they passed in their old age. The environments where we were able to have them live in during their last years were vastly different between the two people (our mothers). We came to the conclusion through this experience that the final living conditions for us in our old age can make all the difference in the world as we slowly fade away - with the best environments for this being VERY EXPENSIVE nowadays. So to be prudent .... one should count on being able to come up with thousands of dollars per month for living expenses, per person, during their twilight years so as to be able to exit this life with some degree of comfort. In a Rest Home, pretty gardens and a great cafeteria just might be priceless. The bottom line is ... don't spend it all on fun and don't leave it all to the kids!

In my opinion, some folks save every dime, and others spend every dime. The middle ground is the harder course. I will trade money for time and experiences every time. The times we have had in our RV, the things we have seen, the places we have been and taken our GD too. How do you put a price on that?

On a everyday approach, as we are older now and better off money wise, some things we have been able to enjoy. As a result

I never go to flying J's, to hard to get in and out of. Don't mind paying more for gas at a less busy place

Don't care really what the campsite costs, as long as it has a pool for the GD.

Don't care about spending money to do fun stuff or buy a souvenir.

I am very aware the clock is ticking, we are getting older and these times will not come again.

Gjac wrote:
The older you get, time remaining is more important than money.

I hear that. When you're facing maybe 10 more years of healthy living, then loosen up and spend it.