# 6 figures and broke



## capncrunch (Aug 18, 2014)

I don't even know that I'm asking for advice. I know what the problem is and how to fix it. I'm just venting.

I did the math recently... I didn't realize how much we made. My wife went back to work almost a year ago, and it was such a huge financial relief. At first, we went a little nuts. Tons of little impulse purchases just because it felt wonderful to be able to, after years of struggle. But that hasn't tapered off like I intended. But it's SO nice, and part of the problem is that it all seems perfectly reasonable. For example, our house is filthy. I could pay someone to come clean it, but, oh, look at this, woot has this pressure washer for $100. Decent reviews too. Add to Cart. That's not wasting money, it's something I needed. Right?

That's the problem is none of it is really wasteful. I suppose we probably "waste" a couple hundred dollars a month eating out when we could just cook. And do we _need_ school pictures, or school shirts, new books, or these extracurricular activities? No. But it feels nice to be able to.

My goal is to create a sustainable budget based solely on my own salary. To have a distinct separation between "needs" and "wants." Maybe we need to set up separate accounts.

But our cars are not doing so well. And our credit is terrible. I really need to get to work on the credit situation. Why am I posting on a messageboard instead of doing that RIGHT NOW? *sigh*

I feel like I need someone to talk to, someone to tell me what to do, even though I mostly already know. But all that stuff costs money too.


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## PBear (Nov 16, 2010)

Have you considered financial counseling, or the Dave Ramsey book? Is your wife on the same page as you?

C
_Posted via Mobile Device_


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## MaritimeGuy (Jul 28, 2012)

I found one of the most useful activities it to document every penny you spend for a period of time...say a few months. Sometimes it's astonishing what you spend on stuff that's not really essential. Nothing like having it stare you in the face on a spreadsheet or in a notepad. 

Once you know where your money is going than start working on a budget taking into account what you've learned. Don't forget to be putting aside money for annual bills like insurance, taxes etc so you're not going into the hole when those come due.

When I split with my now ex I had to do just that. The big void for me was the cash I was taking out each month I couldn't really account for. 

One item was that every day I was picking up a coffee on the way in to work, buying fast food for lunch and picking up another coffee on the way back after work. At least $10 day or $50 week or $225 month. I started brown bagging it and drinking the coffee available at the office. In the end I was eating healthier and on top of the money I was saving on food I was saving on the gas used to go out for lunch. 

Another item was I used to take the kids out every Sunday to go to the bookstore and each of us would pick up a book. Another $30 week or $135 a month. Instead we started going to the library. We could get more than one book and it didn't cost a penny (except for the odd late fee )

There are lots of places to save money. The key is to figure out your priorities...make sure you find money for those...and let go those things costing you money that aren't really adding to your quality of life.


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## capncrunch (Aug 18, 2014)

I've read Dave Ramsey's book, and I like the teachings. My wife and I do not always agree on finances. I manage everything. She has no idea how much money we have. We each have our own "allowance" accounts, where my paycheck from my second, part-time job gets split. Actually, she doesn't even know how much she has in there.

I think writing down every penny for a month is a great plan. I'll start doing that September 1. Part of the problem we have is that much of our wasteful spending is done at big stores like Walmart or Target, where all you see from the transaction side is that you spent $100 at Walmart. Was it video games, or was it groceries? If you bought groceries AND video games, it makes it a little harder to break out, with different tax rates and whatnot.


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## MaritimeGuy (Jul 28, 2012)

I know what you're saying. As I said for me the black hole was the cash withdrawals from the ATM. I'd take out $80-$100 week and when I tried to figure out what I spent it on I couldn't figure out what I'd bought that added up to that amount. It was like it was evaporating out of my wallet.


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## bbdad (Feb 11, 2013)

Don't just like the teachings in the DR program, but actually DO them. Liking does nothing. Set up the ZERO SUM budget. Spend EVERY dollar on paper at the first of the month. Pull out cash for your grocery / clothing / gas / dining and put in an envelope. No cash, no purchase.

If you don't have enough to cover something, you and your wife sit down and figure out where to take from to cover what you mis-budgeted. By the 3rd month, you will have the budgeting pretty solid.

And, don't do your budget for an imaginary month, do it for Sept. You have a long holiday weekend. Do it this weekend. No freaking excuses. Either you grow up and get a handle on your spending or you wonder in 10 years why you make $100k+ and are still broke.

I taught the DR program for about 4 years. I heard stuff like your story more times than I care to remember. It is all about becoming an adult and putting off your impulses so that you can really win later in life.

And yes, I lived the program. We are in baby step #7. Everything paid off, college funds fully going, retirement funds fully going, 6 months emergency funds in place. So, it can be done. Just do it!!

START THIS WEEKEND with your wife and make the budget you both are going to stick with. If you don't, then accept you will be dealing with this for a long time.


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## DoF (Mar 27, 2014)

It's not what you make, it's what you spend!!!

Finances 101 - spend less than you make

That's really all you need to know....I do it month to month.

I think a lot of Americans get caught up in #s and forget how much they spend/waste on complete BS. In the end, the # you make is irrelevant.

It's a story that likes to repeat itself.


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## capncrunch (Aug 18, 2014)

bbdad said:


> Don't just like the teachings in the DR program, but actually DO them. Liking does nothing. Set up the ZERO SUM budget. Spend EVERY dollar on paper at the first of the month. Pull out cash for your grocery / clothing / gas / dining and put in an envelope. No cash, no purchase.
> 
> If you don't have enough to cover something, you and your wife sit down and figure out where to take from to cover what you mis-budgeted. By the 3rd month, you will have the budgeting pretty solid.
> 
> ...


I need someone to help me with situations that come up. I guess I could just post those here, but I'd rather some dedicated place that's going to give the same advice.

Case in point: my dirty house. It's an eyesore. Do I NEED to clean it? No. Might I get a fine from the neighborhood association and/or dirty looks from my neighbors/friends if I don't? Yes. Hiring someone to do it would have been about $100, unless I found some random neighbor kid. I tried to find the best inexpensive pressure washer I could, but it looked like about $200. I was going to save. Then Amazon pulled their stunt of emailing me about a special, normally $150, now $99. I read some reviews and bought it. Now I can wash the house for FREE once or twice a year. If I was living on a zero-sum budget, where does that come in? Do I just say oh well, let's just ignore this great deal and pay $50 more next month when we've budgeted for it?

The thing that I don't like about Dave's program is that it feels psychologically damaging to go to work, bust your ass, and then come home and read library books by candlelight and eat cold spaghetti in a hot house because electricity is an unnecessary expense.

Yes, I'm being hyperbolic.


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## bbdad (Feb 11, 2013)

That is NOT what the DR program is about. Do you HAVE to buy everything on every whim you have? Are you and adult or a child? I don't mean to sound so harsh, but I have heard this over and over, and the story really doesn't change.

You DO NOT do impulse buys when you are on a budget. You make allowances for Christmas, B-Day, Holidays, etc...and have those things built in.

For example, you may have a $100 per month clothing budget. If you just must have this $100 pressure washer, then you take money from your clothing budget and be done with it. No new clothes, but you got your toy. Or, you take it from your entertainment funds, your dining funds, etc....

The point is that you do not spend for anything unless it is accounted for in the budget. You can move things around, but it still is what it is.

I bust my ass at my job. My wife is a SAHM. We take nice vacations every year. We drive relatively new, nice paid off vehicles. It is just a matter of planning and knowing how to make allowances.

You sound like some one that doesn't want to control their impulses so you will make excuses for not being able to do it. In all the years that I taught the FPU program, I never saw one family that followed the plan not be successful at it. I saw plenty who made excuse after excuse and claim it just doesn't work.

The choice is yours.


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## Anonymous07 (Aug 4, 2012)

6 figures and broke?! Holy cow. We make less than half of that and live in an expensive area, but we make it work. We've never really wanted for anything. We just budget well and live within our means. 



DoF said:


> It's not what you make, it's what you spend!!!
> 
> Finances 101 - spend less than you make
> 
> That's really all you need to know....I do it month to month.


:iagree:


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## Nikita2270 (Mar 22, 2014)

I haven't read the book that everyone is talking about but I do pretty well with the way I budget.

I make really good money but I also went through an expensive divorce and paid for that in cash. I also own my own home...own my car and have zero debt. I put one kid through university already.

What I do is pretty simple. Its just the reverse budgeting approach.

I loathe micromanaging money....so I take out everything I need to pay at the beginning of the month. The first person I pay is myself...meaning my investment and savings accounts.

At the beginning of the year, I figure out the big expenditures I'm going to make...ie, house repairs, Christmas presents, legal fees, vacation, big stuff I want to buy, whatever and I figure out the monthly amount for that. Then I put a certain amount away for my emergency fund. Then I figure out the deductions to my savings accounts based on the percentage of my income that I'm putting away that year. Then I budget my bills and make sure that I leave that in my account every month.

I just do this once and its usually pretty close to the one from last year...so this whole exercise takes me about 2 hours.

I arrange the deductions from my bank with auto payments that I set up with my bank advisor.

Then whatever is left is mine to use at my discretion. Sometimes I save it...sometimes I buy crap...sometimes I let the kids blow it. I put any tax deductions I get back into my tax exempt savings account.

As I said, it works for me. I have zero debt, perfect credit and buy everything I want with cash. I haven't paid interest on a payment on anything since I was in my 20s. I just wont do it.

And believe me, I'm bad with math so its very doable. I'm the type of chick that will shop and spend 800 bucks but come home and tell my partner that I saved 300 bucks. I call it "girl math." So if I can do it...so can you.

My partner who is a financial whiz and very well off basically does the same thing except he also understands investment accounts better than I do. I'm kind of an idiot with that stuff and let the bank do it. He's trying to teach me but I really have zero head for it.

Good luck working on this goal. There is nothing better than feeling financially secure. Its kind of awesome.


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## capncrunch (Aug 18, 2014)

I appreciate the harsh words, bbdad. I feel like I need harsh at this point. We basically got a $30k raise when my wife went back to work. I expected and allowed us to go a little nuts at first, I figured we earned it. Then a month turned into two, turned into six, and now it's been almost a year. But it's no longer "extravagances" like shopping trips. 

I don't know... it really is just excuses. Part of the problem (aka, another excuse) is that my wife and I _both_ suck at managing money. Generally, in marriage, there's the spendy spouse and the thrifty spouse, so it balances. But we both fall into the psychological pit of "Well.... it's _only_ $20. It's _only_ $100. It's _only_ $1000..."

I'm gonna post some specifics so that maybe I can get yelled at some more.


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## MaritimeGuy (Jul 28, 2012)

To me you don't want to live like a hermit. There's no prize for dying with a million dollars in the bank. The key is to separate needs from wants and prioritizing. Patience is a virtue too in that if there is a treat you want rather than just slapping it on the credit card or financing it start putting money aside and pay cash once you've saved up enough. Sometimes you'll find that treat loses its lustre by the time you have the money saved up and you won't end up buying it or it will go on sale during that time and you will be able to get it cheaper.


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## DoF (Mar 27, 2014)

capncrunch said:


> I appreciate the harsh words, bbdad. I feel like I need harsh at this point. We basically got a $30k raise when my wife went back to work. I expected and allowed us to go a little nuts at first, I figured we earned it. Then a month turned into two, turned into six, and now it's been almost a year. But it's no longer "extravagances" like shopping trips.
> 
> I don't know... it really is just excuses. Part of the problem (aka, another excuse) is that my wife and I _both_ suck at managing money. Generally, in marriage, there's the spendy spouse and the thrifty spouse, so it balances. But we both fall into the psychological pit of "Well.... it's _only_ $20. It's _only_ $100. It's _only_ $1000..."
> 
> I'm gonna post some specifics so that maybe I can get yelled at some more.


Unless you do it, no body will do it for you. We are not yelling just advising.

What you do with it is what really matters.

I take that back, what YOU and YOUR WIFE do with it is what matters.

You should sit down at least once a month (or weekly basis) and figure out budgets/plan the month out. Every week review it and see how you are doing.

If you don't do it, I will warn you that debt will stack up quick. And we already know that even 5k of debt can add up to good 30-40k over the years of minimum payments.

So there it is, don't do it and the banks will make out nice.


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## capncrunch (Aug 18, 2014)

One struggle is that my wife hates her job. Hates. The only way she's able to stick it out is knowing that by working, we can "afford nice things." Also, I grew up in a broken-down trailer with no phone or car, she grew up in a neighborhood, two cars, and lots of other things.

If I lived alone, I'd be rich as ****!

I feel like budgets only ever work on paper. I actually paid a Ramsey counselor $100 a few years ago to help me out, about $20k/yr ago. One of the struggles I had back then was that he took annual/12, so on the budget, it looked like we had more than it really felt like getting paid biweekly.

Ok, so after 8% to my 401(k)/her pension, then insurance, FSA and all that jazz, and taking out my 2nd income, we net $2917.75 every two weeks. So we can say we make $5835.50 a month, even though going by /12, it's really $6321.79.

So, $5835. After $1200 for rent, $140 for student loan payment, $100 for state taxes, $80 for dental insurance, ~$275 for utilities, $68 for internet, $155 for car insurance, $130 for phone, $40 for garbage pickup, and $80 for miscellaneous other stuff, I'm still left with $3800 for groceries, extracurricular activities, etc.

Holy crap, we've got a problem.

omg, budgeting NOW.


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## capncrunch (Aug 18, 2014)

I should also mention that we're (kinda) debt-free. We have some old credit card stuff that's well past the statute of limitations, but I still need to deal with it. Some would say that I have a moral obligation to repay that debt, but I say they shouldn't prey on college students with the illusion of "free money."


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## Blondilocks (Jul 4, 2013)

It is so sad to think that a person in college can still be under the illusion that there is such a thing as 'free money'. Maybe you should sue your college for failing to educate you.


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## MaritimeGuy (Jul 28, 2012)

Blondilocks said:


> It is so sad to think that a person in college can still be under the illusion that there is such a thing as 'free money'. Maybe you should sue your college for failing to educate you.


I think that's a bit harsh. Simply attending college doesn't mean you suddenly know everything...or I can say at least in my case it didn't.

Banks definately prey on university students. They know students are impulsive and not particularly financially astute yet will most likely be gainfully employed at some point down the road so they give them easy credit. My brother had a CC with a $5K limit at university despite the fact he had no income. How responsible is that on the banks part?

They're hoping you get into the habit of charging things now and figuring out how to pay for them later. Hopefully, making minimum payments each month which means maximum interest for the CC company.


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## EnjoliWoman (Jul 2, 2012)

After you make your budget, I suggest a few small, easy things:

- if your wife can have her check direct-deposited and you've done your budget and know how much 'extra' there should be, have that amount directly deposited in another account. If the employer won't do that (mine will), see if the bank can automatically funnel a set amount over to a savings account. It's much easier to not spend that money when it's gone before you start paying bills, etc.

- when it comes to mowing, cleaning, etc. I think to myself "if someone offered me $X dollars to do this, would I?" Most of the time I would. So then I do it myself. I hate the idea of paying for cleaning or mowing or waxing the car, etc. I'd rather pay someone for things I CAN'T do.

- do set aside some fun money like you are. But when it's gone, no dipping into the savings. That's for major unexpected expenses.

- do what you need to to keep your cars running. As much fun as a nice car is, not having a payment is great. Spend an afternoon giving the cars some TLC - full detail with wax, tire shine, etc. so you feel good about driving it. Never delay maintenance - it's a poor financial decision. Cars should go 200K miles or more unless you bought an American car (ducking and running). You don't want to buy now if your credit isn't good.

- build up your good credit. Only have two major credit cards. One stays in a drawer you both have access to in the event there is a big emergency. The other one is for travel. If you need to start with a secured card, then do. Decide an item you already have in your budget but will charge and pay every month. For instance gas or groceries. Use it, pay it - every month.

- Make shopping lists. I got a $1 dry erase board for my fridge. I write a list of meals down the right side that i have ingredients for. As I make meals and use something up, I list it on the left. If there are other things I need I write it down when I think about it (shampoo, etc), then I take a photo before I go to the store and stick to my list. Don't go hungry. 

- To that same note - I have a small notebook I have home improvement or repair projects listed; sometimes they take several pages. But if you want to paint the bathroom for instance, write that at the top of the page, then list how many hours you think it will take and start a list of everything you need for the project. When you have a weekend you want to do something, flip through your book, choose a project you both agree on and get what is on that list only. No wandering the store, grabbing other nifty things - just that.

- Same thing with holidays. Make a list of people you intend to buy gifts for. Decide what you think each person would like. Purchase those items and cross them off the list. It keeps you from impulsively buying too much or multiple things for someone because you can't remember what you picked up 2 weeks ago.

- I think the pressure washer was a good buy IF you use it. Maybe you could think of fun ways to earn extra money that goes toward a car down payment - perhaps you USE that pressure washer and offer to do neighbor's homes for a fee.


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## bbdad (Feb 11, 2013)

Don't do the annual/12. That is not straight from DR protocols. Do the budget for SEPTEMBER this weekend. Stop making excuses and do it.

Write down exactly what you will make and when you get paid.

Write down your bills by when they are due. Decide what check is going to pay what bills. Write this stuff out. Get it on paper. Stick to it. No more excuses. I don't care about how you grew up or that you think "it is only $20." Get it done this weekend.

If you have something like car insurance coming due next month, you may want to figure half of that in your budget this month and the rest next month, but you need to account for it, unless you will just cashflow in the months it comes.

Go get the Total Money Makeover from the library, or go buy it by Friday night. It has all of the forms in it. Read the chapters on budgeting.

It is so simple, a monkey could do it. You just have to be willing to do it and live with what you agree with your spouse to spend. I guarantee you will mess up the budget for Sept and you and your wife will have to sit down about mid-month and rework it TOGETHER. Then, you do it again in October. It will probably have to be re-worked in October. You should be really close in November. 

I always swore the Financial Peace University program was 13 weeks long because it takes people at least 3 months to get the budgeting done correctly. 

Now, you don't have to take any of this advice and just do what you want. But, I can promise that if you follow the plan, it does work. I have never seen anyone fail at it that did it as prescribed. I have seen people fail, but they always have an excuse.


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## norajane (Feb 7, 2012)

capncrunch said:


> I think writing down every penny for a month is a great plan. I'll start doing that September 1. Part of the problem we have is that much of our wasteful spending is done at big stores like Walmart or Target, where all you see from the transaction side is that you spent $100 at Walmart. Was it video games, or was it groceries? If you bought groceries AND video games, it makes it a little harder to break out, with different tax rates and whatnot.


If you find yourself going to get groceries at Target or WalMart and end up with a bunch of video games too, stop going to Target and WalMart to buy groceries. Whatever extra it costs to go to a grocery store that does not sell other crap besides groceries will be worth it. Do not bring your kids to the store with you so they aren't grabbing things and putting them in the cart of whining their way into more video games.

No one needs video games, btw. That's purely a want, and not necessary since you probably already have plenty of video games. And even if you don't, send the kids outside to play instead.

Also, buy groceries from a list. If it's not on the list, do not put it in your cart, period. Unless it's something you forgot to put on the list like milk, you don't need the 14 different boxes of cereal and whatnot. 

You and your wife need to come to grips with this before it sinks you. If your credit rating is bad, then you need to pay off your debts first before the interest rates eat you out of house and home. You created the debt - not the banks who issued credit cards. It's your responsibility to pay it back and clean up your credit rating. It will follow you no matter what.


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## richardsharpe (Jul 8, 2014)

Good evening all
Its always worth remembering that there are people out there with more money than you can imagine, and people with less than you can imagine. So be sure you aren't buying things to impress others, or to keep up with someone else's standard of living - it won't work. 

If you want to own a nice car, that's fine if YOU want it, but be honest with yourself that you aren't buying it to impress others.


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## MaritimeGuy (Jul 28, 2012)

richardsharpe said:


> you aren't buying it to impress others.


What??!? 

What about the Jones family down the street?


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## capncrunch (Aug 18, 2014)

EnjoliWoman said:


> After you make your budget, I suggest a few small, easy things:
> 
> - if your wife can have her check direct-deposited and you've done your budget and know how much 'extra' there should be, have that amount directly deposited in another account. If the employer won't do that (mine will), see if the bank can automatically funnel a set amount over to a savings account. It's much easier to not spend that money when it's gone before you start paying bills, etc.
> 
> ...


Wait... so you mean replies can be constructive, AND helpful? 

bbdad, I think you're being an аѕѕ. I'm ok with that, just had to say it. I don't need to buy the Total Money Makeover book on Friday, I bought it several years ago. I read it. I agree with it. Now I need to put it into practice. I needed some motivation, but if putting everything on paper and not being able to account for *thousands of dollars* every month is not motivation, I don't know what is.

I'm on it.


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## bbdad (Feb 11, 2013)

It's OK to say it. I don't mean it that way at all.

What I am trying to do is to get you motivated to do something about your situation. You "talk" about putting it in practice, but have done nothing about it. My posts are just trying to give you the proverbial "kick in the ass" to get you moving and better your situation. That is why I say things like ... do X by Friday night... Do "Y" this weekend. It is trying to get you mad enough at me to actually take action so I will stop posting about it


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## Haiku (Apr 9, 2014)

Six figures is pretty ambiguous. It ranges from 100k, which isn't that much, to 999k which is impressive. There's plenty of people spending every dime they make and then some. The more they make the more they spend and yet haven't anything to show for it. 

I think it's likely that a budget won't help you until you figure out the psychological reasons triggering your (impulse/compulsive) spending.


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## TiredFamilyGuy (Jan 18, 2014)

Saving 8% is way too little. You are mid thirties. Should be much more, unless you have kids or plan working until you are 70. Take money out of the pot - you will then find you have less to fritter with.


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## NobodySpecial (Nov 22, 2013)

capncrunch said:


> Wait... so you mean replies can be constructive, AND helpful?
> 
> bbdad, I think you're being an аѕѕ. I'm ok with that, just had to say it. I don't need to buy the Total Money Makeover book on Friday, I bought it several years ago. I read it. I agree with it. Now I need to put it into practice. I needed some motivation, but if putting everything on paper and not being able to account for *thousands of dollars* every month is not motivation, I don't know what is.
> 
> I'm on it.


The only problem that I had with TMM was the cash business. Nowadays paying cash is just a pain. Almost ALL my bills are paid electronically. I use YNAB instead, same principle, no envelopes.


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## Bobby5000 (Oct 19, 2011)

If 6 figures refers to your combined salary, the first thing to realize is that this is not a lot of money. You are a middle-class family that needs to budget, limit spending, and work on budgets. It's possible but the first step is to disbuse you of the myth that you are wealthy.


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## heartsbeating (May 2, 2011)

capncrunch said:


> Why am I posting on a messageboard instead of doing that RIGHT NOW? *sigh*
> 
> I feel like I need someone to talk to, someone to tell me what to do, even though I mostly already know. But all that stuff costs money too.


I hadn't posted until now because I found myself nodding in agreement with bbdad's posts, even though I haven't followed that specific path - but when my husband and I first moved in together, he was terrible with managing his money. We began withdrawing money and placing in allocated 'budget' envelopes so that it was visible. We no longer do this but it was a great tool. Things are tight for us right now, just as we're buying a house and there's been financial implications around that, so we have a whiteboard at home and wrote out month-by-month what we had coming in, and what needed to go out (based on renovations, the move etc.). Again, to make it visible and keeps us firmly based in reality. 

Straight up, my concern was that you only recently realized what your combined house-hold income is. Lots of good suggestions in this thread so far. I hope you can do what you need for yourselves. I think Haiku makes an excellent point around psychological reasons for spending and triggers though.


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## OhGeesh (Jan 5, 2010)

Not enough details  I personally hate DR unless you truly spend with no end in sight.

His philosophies will prevent you from becoming wealthy, retiring early, but hey "You can be debt free". For people like "HIM" who lost it all because of risky excess I can see it working.

Every real estate investor or small business owner who took a loan would have not done so under the DR train of though. In fact the whole economy would fail if everyone followed DR's approach to money, but that doesn't stop him from making millions off his "Debt free or die" philosophies. Just like Rush Limbaugh getting rich.....just another talking head imo with lemmings that follow him.

As far as your problems. There is not enough info! Where you live, liabilities, what type of debt, kids, there are alot of factors that you haven't provided.

In the end we all die. I know people with 3 million in retirement and 6 figures in a savings account and they drive 10 year old vehicles, rarely travel, but love their money in the bank. Others live practically paycheck to paycheck, but travel and have fun cars and are living life.

There is no right or wrong in how you do it, but if you say you have alot of bad debt like CC's don't know where all the money goes, well you have some choices to make.

Tighten the belt it's simple math. Pay off CC's and focus on rental properties or buy stocks........usually making more money inspires me  

Or plan a trip wich is still spending lol.


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## ArmyofJuan (Dec 29, 2010)

Go to Mint.com and put everything you have in it and install the app. This will give you an idea of what you are spending and will keep you up to date on your accounts (I also use Check).

Also get the Credit Karma app.

All are free and will take most of the work out of figuring out where you are at financially.

I'm kinda in the same boat (even have the dirty house that I'm too lazy to clean but don't want to pay for it). For a while we were spending around $3k a month more than we brought in each month which put us more and more into debt. Fortunately (or not) I have good credit so I had cards with huge limits that we lived off of. Every now and them we'd get a small windfall and pay things down but that never lasted long.

Now I'm fixated and cutting our overhead but it's not easy getting the wife to change her spending habits (or mine, I'm also an Amazon junkie). Lucky she got a huge raise so we are in the black now but just barely.

Having those apps on your phone and checking them often should help.


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## capncrunch (Aug 18, 2014)

To the people commenting on the "6-figure" definition, it's $110K. I was just being a little vague. I realize that's not a ton of money, but we're below average for cost of living here. No one making $950K is going to say anything about "six figures."

I never claimed to be rich. Just that I'm surprised how much money seems to seep out unaccounted for.

I did some research and found youneedabudget.com, along with a half-off deal. We made a budget for September and I've started accounting for every dollar, even my cash. The first YNAB goal is to live a month ahead, which I hope to be able to do by next month. 

Thanks for the support.


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## GTdad (Aug 15, 2011)

That's about what I make, and my wife is a SAHM. Lots of kids. Lower than average cost of living, too.

It gets pretty tight sometimes, but it helps out a lot to have a budget, although we could do better at sticking to it. At a minimum, you can see where the money is going to that otherwise would be a big mystery.


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## bbdad (Feb 11, 2013)

The DR protocols are good for getting a handle on your spending when you are not controlling it very well.

I watched family go through bankruptcies as a kid. I don't want that for my family. That is why I chose/choose to live debt free. 

I will be able to retire early. Just once you are out of debt, you can invest a lot more. The only thing I don't do is borrow to purchase rental properties.


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## turnera (Jan 22, 2010)

I would advise using the envelope approach from DR. It's a pain at first, but it REALLY helps you see where your money is going. Figure out how much you spend on groceries, and junk food and toys etc., and put aside money in envelopes each month for what you think you should spend on it. As you buy said toy or milk, you pay for it out of THAT envelope. And you can keep on buying toys or milk...until that envelope is empty and you know you have to wait til the next paycheck comes in (or you adjust your spending budget to reflect it).

Side benefit: all these hackers that keep hacking into all the stores (Home Depot just announced today they got hacked) and their credit card systems - the issue is gone if you just pay cash.


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## Lon (Jun 6, 2011)

capncrunch said:


> I never claimed to be rich. Just that I'm surprised how much money seems to seep out unaccounted for.


So what you have is an accounting problem. You are fortunate as you are easily in a position where your income can easily provide for all your needs... and then a little. Your problem is that "a little" is just a little too much, and it snowballed a bit.

So do the accounting, do the snowball method to get your cards under control, but the hard part is the lack of instant gratification you've been getting with all the new stuff that has seeped into your messy house.

I earn half what you do, but to me that is way, way more than when I was young and lived life simple, and was financially comfortable. Of course, other responsibilities take their financial toll too (which also often go unnaccounted for, emotionally).

In my case, I was stressed due to money, I got all of the frivolous spending under control, did the accounting, but found it was still very very tight, in fact I couldn't cover my credit card payments. That was scary - having not quite enough income to even cover the necessities for the long term, and not having much ability to increase the earning potential. I worked at it, even downsized my house (which was a big deal emotionally), and the depressing part is despite all that it still felt like I'm barely ahead. I managed to get my bad debts cleared, even have enough for a down payment on a small condo, however I've just come to realize the cost of living where I am is just too high based on my modest income.

I'm stuck with a messy roomate, in cramped quarters - it's cheap, allowing me to actually put away savings for the first time in over a decade, but to own my own home again (one that doesn't have a rental suite) is not financially possible for me now, and even the barest of condos puts me at the line again (due to the exhorbitant property taxes and condo fees in my city), 2 bedroom rental units are out of control, so shared accomodation is the only way most people can actually afford to live in this small prairie city.

I envy you, with your healthy family income level. The times are getting expensive, don't fall behind on the financial growth or you will get stuck even worse.


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## DailyGrind (Jun 27, 2010)

Budget based on two bi-weekly pmts a month, for income. The two "bonus" payments of income go to a special account, reserved for Christmas and vacations......assuming you are saving properly.


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## capncrunch (Aug 18, 2014)

Lon said:


> So what you have is an accounting problem. You are fortunate as you are easily in a position where your income can easily provide for all your needs... and then a little. Your problem is that "a little" is just a little too much, and it snowballed a bit.


Yes. EXACTLY.


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## turnera (Jan 22, 2010)

Read Rich Dad Poor Dad together. It will help you select an end goal and with all that disposable income, you could quickly become rich, not just well off.


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## bbdad (Feb 11, 2013)

Capn:

What have you done since you started this thread to remedy your situation? Actions will be your friend


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## RandomDude (Dec 18, 2010)

Financial management is the key to financial freedom mate, you both need to learn the skill. You need to start learning how to make money work for you instead of simply spending it.


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## capncrunch (Aug 18, 2014)

bbdad said:


> Capn:
> 
> What have you done since you started this thread to remedy your situation? Actions will be your friend


Huh? I came back and reported:



capncrunch said:


> I did some research and found youneedabudget.com, along with a half-off deal. We made a budget for September and I've started accounting for every dollar, even my cash. The first YNAB goal is to live a month ahead, which I hope to be able to do by next month.


I budgeted expenses for every category, including funding future vacations, christmas, etc. I have entered and categorized every transaction so far this month (only 5 days, I realize). So far, things are looking and feeling much better.

We had a lot of stuff all at once that kinda freaked me out. School uniforms for 3 kids, school supplies and expenses for 3 kids. A band instrument. Extracurricular activities and related expenses (limited to 1 per child, and only 1 day a week).

We're pretty much back to normal now, and the previous "breathing room" money that would end up seeping out at restaurants and stores is now budgeted and accounted for. I'm REALLY glad I did this. Thanks for the motivation.

Like I said in my original post, I knew the solution all along, I just needed a push (or in bbdad's case, a SHOVE. ).


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## bbdad (Feb 11, 2013)

Great job. Managed money always goes further. I know it is hard to get started, but I think you are seeing some benefits of it already.

Keep up the work. Once you get a few months going, it is virtually painless to keep it going.

Now, that you have done the work, you will see me just shooting you encouragement  LMAO!!!


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## DoF (Mar 27, 2014)

I don't recommend mint or ANY "apps" that just show you what you already SHOULD know. Also, I would never give these companies my bank account details etc.....no thanks.

It's simple, again. Finances 101.

Spend less than you make.

Plan your month, follow it, report at the end >see results and adjust accordingly.


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## capncrunch (Aug 18, 2014)

DoF said:


> I don't recommend mint or ANY "apps" that just show you what you already SHOULD know. Also, I would never give these companies my bank account details etc.....no thanks.
> 
> It's simple, again. Finances 101.
> 
> ...


I'm pretty trusting with that sort of thing, but YNAB is completely offline (though it can cloud sync via dropbox if you prefer). It relies on you MANUALLY entering your bank balances, transactions, etc. For me, this is ideal because I HAVE to be on top of things. The problem with all of the automated things like Mint is that it never knows what you spent money on. Like Walmart. I may spend $150 on groceries, then $50 on a videogame, then $400 on tires. But ALL of the automated systems will caterogize these things together. Manual intervention to an automated system is easy to neglect. But when EVERYTHING is manual from the beginning, it's easier to get into the habit.


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## NobodySpecial (Nov 22, 2013)

capncrunch said:


> I'm pretty trusting with that sort of thing, but YNAB is completely offline (though it can cloud sync via dropbox if you prefer). It relies on you MANUALLY entering your bank balances, transactions, etc. For me, this is ideal because I HAVE to be on top of things. The problem with all of the automated things like Mint is that it never knows what you spent money on. Like Walmart. I may spend $150 on groceries, then $50 on a videogame, then $400 on tires. But ALL of the automated systems will caterogize these things together. Manual intervention to an automated system is easy to neglect. But when EVERYTHING is manual from the beginning, it's easier to get into the habit.


You can download transactions from the bank to YNAB. I do it all the time.


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## kindnessrules (Sep 5, 2014)

Crunch, you seem like an incredibly good sport about getting "yelled at." My first time posting after joining I got "yelled at" and felt pretty bad, but luckily a kind poster said don't let anyone shame you. But mostly it seems like people here are kind and supportive and give thoughtful replies and truly want to help.

Luckily my husband and I are naturally frugal (cheap) who both hate spending and love saving. We got it from our parents, I guess. And we hate shopping. And debt. I'm sort of spendaphobic, have the bag lady fear like lots of other women. I feel like whatever money I have will be gone tomorrow, so I try hard to get sale prices and hang onto my money.

I lost my job in '09 which reduced our income by half, at an older age and now am a senior who tend to watch their money pretty closely. 

Sounds like you and your wife might be younger than me. Maybe over time you'll naturally get more frugal and not have the desire to spend so much. That's something to look forward to, right?

I'm sure all the advice in the world can't make you change enjoying spending money and having things. I don't think I can give you my frugality by osmosis. But I think you're doing a good thing by putting yourself out there and asking for help. I have no doubt something will change eventually. In the words of that famous philosopher Tiger Woods, it's not what you achieve, it's what you overcome. You can become the more frugal person you want to be. Baby steps. You'll get there.


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## bbdad (Feb 11, 2013)

I was not "yelling" at Cap. I was just trying to get him to actually get motivated do doing something. He has not got it going and I am sure will do very well.


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## bbdad (Feb 11, 2013)

How's it going this week? You still keeping things in control?

Hang in there. You will slip up at times. This is more about a marathon to get you to the finish line.


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## debster (Dec 17, 2012)

I agree tracking is the key. I've heard good things about YNAB. 

I also think the 8% for retirement is too little.

It sounds like you are getting on the right path so I'll just leave you with this food for thought.

I know that the finances were *stressing* you out and spending money on things you think you *deserve* was important to you. But more importantly is you *deserve* to not be *stressed* by finances. Any time you feel hard done by because you can't buy what you want or go out for a meal, ask yourself if it's worth it and remind yourself that you *deserve* to not have to worry about finances. This will keep the spendy monster at bay. 

And if you find yourself weakening, go and read our story about all the financial mistakes we made. That will give you the motivation to stay on course. It can happen when you are looking.


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