topic Re: Financial Happiness in Personal Finance

Financial Happiness

kaylitaa — Wed, 31 Aug 2016 18:33:56 GMT

I'm going to be completely honest. I've been a creeper on these boards for years. Mostly trying to find out what kind of credit card I could be approved for with my terrible credit, just so I would have access to money to buy things I never needed. That’s my problem. I have a huge spending issue. Instead of saving money, I look for things to spend money on. Oh hey, I have an extra $200.00 from my paycheck this month, well let's go to Target and just blow it all. I live paycheck to paycheck and am never ahead with my bills or anything. I have no savings. There are even times were I get paid on Friday and spend it all by the time the weekends over.

I’ve been slowly trying to rebuild by credit since last year and have been successful with working with a company to have all of my collections and negative things on my reports removed. As of today, I have nothing “bad” on my reports. However, I know that my biggest obstacle is the way I think about money. I want to be able to save money without withdrawing it from my savings account a week later. I don’t want to live paycheck to paycheck and I don’t want to stress about money for the rest of my life.

So, for anyone that can relate, what was it for you that gave you a new outlook on your personal finances? Are there any books you read that gave you insight or motivation to change your spending ways? Any advice is appreciated!

Re: Financial Happiness

darwin_wins — Thu, 01 Sep 2016 01:19:32 GMT

I don't have any tips on what you are asking but may be open an account and transfer money to it every month and don't activate the debit card or even card that with you. This way if you don't see the money you don't spend the money.

Another thing that works is just YNAB app where people put in all the transactions for the day that keeps a track of how many you have. May be you need to use a envelope method where you spend say only 100 a week and nothing more. If you run of money before the end of week you now know you need to budget it properly so you don't run out again. This is only achievable if you really want to stick to the weekly budget and tough it out if you run of money for the week. Good luck and remember all the financial habits you have now will either reward you or punish you in the future.

Re: Financial Happiness

grillandwinemaster — Thu, 01 Sep 2016 14:35:46 GMT

I have experienced similar behavior as yours in the past. One thing that helped me is that i opened an account at a small bank that was about 2 hours away from my house. They had NO local branches and like the poster above mentioned, I destroyed the debit card that came with it. I declined checks associated with the account. I had an amount auto drafted from my primary account every pay check. This way, it had to be a REAL emergency for me to drive 2 hours from home to take out money. If you can find indeed that's closed on weekends, even better. It worked!!

I highly recommend that you DON'T open any credit card accounts until your able to change your behavior patterns. One thought may be to save about $500 then open up a secured credit card. It sounds like your credit report would qualify you for a regular unsecured card, but given your admitted money habits, it's probably a safer alternative to go the secured route. You can always close it if you see yourself getting into trouble.

As far as books are concerned, check out Dave Ramseys Total Money Make Over. He has great advice, but he is completely against credit cards. Come to think of it, might not be a bad idea!

Best wishes to you!

Re: Financial Happiness

Anonymous — Thu, 01 Sep 2016 18:40:03 GMT

To answer the last question in the OP. I think what a big part of it for me was when I worked at a bank for a little and saw how much money alot of people had in their accounts. It really made me want to be just like them.. accounts with alot of money.

Re: Financial Happiness

greent — Thu, 01 Sep 2016 20:20:45 GMT

I had such a good reply but hit the back button and it all got deleted. But basically I can relate. I ran into Dave Ramsey in the radio. I bought his book the Total money makeover. He teaches people how to retire a millionaire. How to get out of debt. It's hard work. I got a part time job and all that income will go toward my debt. I stopped spending my extra money and all of it goes toward my debt. My only cc left is amex. Today I paid off discover. Basically listening to Dave Ramsey changed my perspective. His site is his first and last name .com in there you can look for a local radio station that carries his show. It helped me. Good luck!

Re: Financial Happiness

Appleman — Fri, 02 Sep 2016 23:50:16 GMT

'Retail therapy' can be a powerful addiction for some. There is the release of dopamine we get in our brain when we do something that causes pleasure within the brain. The therapy is often short lived, often until the credit card statement cuts.

I completely understand where the Op is coming from and it can be a challenge to change one's thinking. The main thing IMO is to continue to try. Read books about budgeting, try YNAB, listen to Susan Orman, Dave Ramsey, or other talking head. Eventually, someone will speak to you in a voice you will hear.

Try to budget, seeing where your money is goin, how much you are spending on interest can be a big eye opener. Good luck...

Re: Financial Happiness

darwin_wins — Sat, 03 Sep 2016 00:34:58 GMT

What was the most money you have seen in an account?

Re: Financial Happiness

Anonymous — Sat, 03 Sep 2016 06:37:05 GMT

ALOT in business accounts.

But I still remember a guy that had $2 million in his savings. Regular guy who came to this country. Didn't get rich from the lotto or anything. Just worked hard and put alot of money away.

Re: Financial Happiness

youdontkillmoney — Sat, 03 Sep 2016 18:54:54 GMT

Advice to OP:

1. change your thinking by reading personal finance/money books from various authors. you learn fiancial concepts and products and perspectives/strategies. so you can have a foundation of body of knowledge Get educated in pesonal finance basically.

Myself (I'm 42), I've done the above and believe in

2. paying yourself frst, helps if you make a good amount of money to be able to do so comfortbly, but that depends on your profession which depends on your schooling and/or talents, but ignoring this....pay yourself first so you can't waste it on frivolous stuff, max out all your retirerment accounts and when you can't anymore, see if an annuity (type of deferred retirerment account) is right for you and contribute more each month

Myself:

I have 7 retirement accounts and also there's social security for the 8th retirement stream

1.A state 401k type for my part time teaching at a state shcool; since it is part time does not have much. Everytime I teach a % goes in here automaticlaly

2.A state pension for teaching at a community college; since it is part time does not have much. Everytime I teach a % goes in here automaticlaly

3.a 401k type account with my employer. I max out $18000 each year by auto payroll deductions, which is about $692 every 2 weeks and reduces my taxable compensation

4.a pension with my employer--a $ amoount about $200 goes in every two weeks automatically

5.an IRA I opend up separately - I contribute $458 each month after taxes

6.an annuity I opened up separately - I have auto contributions every month at $250 a month

7. an annuity i opened up with my employer - i have auto contributions of $200 every 2 weeks from my payroll

The idea is Tax strategy (reduce your tax base so you pay less in taxes now) and saving for the future so you can quit your job and not be like my co worker who is 70 years and cannot afford to quit

My wife (39) has 5 retirement accounts since I plan her financial affairs and opened up accounts for her too, like an annuity. She has 5 accounts but also can apply for social security which makes it a 6th source of retirement income:

1.her employer 401k type account: i max it out at $692 a pay period (plus she get employer match up to 6% of her contribution, important point here is if you have an employer that matches contribute at least the mminimum to get that match to not leave money on the table), so $1800 a year and also like me, reduces her taxable income

2.her employer 401a type account: her employer contributes only

3.her employer pension with contributions by her employer only

4. I opened her a traditional IRA (like mine) for her, and put in automatically $458 each month to max it out

5. I opened up a variable annuity for her, automatically like me put in $250 a month deducted from a checking account

We don't have any kids so that helps with savings, remains to be seen if we will

She works for a hospital I work for a local government. we both have at least one master's degree so we are lucky in being able to generate healthy cash flows

Do we spend on nice things like her, Chanel purses, Balenciaga purses, Celine purses, Givenchy purses...yes she has an "addiction". Do I spend on nice things. yes also. But we are trying to slow down and important WE PAY OURSELVES FIRST by maxing out returement accounts, it is not really "spending" since the money goes from one pot into another and is "investing"

3. have BIG GOALS in mind to help you save save save. For example you want to pay down debt, you want to buy a home...these BIG GOALS become more important to you than spending so it helps push you to save save save to accomplish these goals as without these goals or whatever they are for you there is nothing stopping you from continuing financially destructive behaviors.

All of this being said, there's somethign to be said of retail therapy every once in a while, nothign wrong with spedning on something nice, but it's important to have your priorities set in place first.

Re: Financial Happiness

CatOfSpades — Sun, 04 Sep 2016 03:16:54 GMT

My wake up call was two fold: one is when I saw how much of my money was going to debt payments. Literally every last cent that wasn't going to bills. The other was when I realized I couldn't even afford to replace my water heater or fix my car or even get an oil change. I had $200 in savings that I was using little by little to keep myself afloat, plus, I was with Bank of America at the time and they were taking $4 a month in fees, so I finally changed banks once I realized that wasn't sustainable. That fee made me feel like they were kicking me while I was down. Never felt so broke and lost in my life. So, of course, I would go out and spend more money to make myself feel better. The good thing is that I had a lot of stuff to sell later. So, I totally understand. I did the exact same thing - I would spend all of my money, more money than I had.

Some books I read that were very helpful: Debt Free Forever by Gail Vaz Oxlade - Total Money Makeover by Dave Ramsey. Those two helped the most by far. I haven't had any debt in two years. It's definitely possible for people to change the way they handle money. Dave will walk you out of debt and help you get control over your money, and Gail will help you understand why you're self-destructing and help you stop. Wanting to change is the first step.

Re: Financial Happiness

grillandwinemaster — Sun, 04 Sep 2016 05:15:52 GMT

Read As many financial books As you can get Your hands on. Some good authors to Google include

Dave Ramsey

Suze Orman

David Bach.

Best wishes to you!

Re: Financial Happiness

srloring13 — Sun, 04 Sep 2016 08:14:57 GMT

I recommend creating a short term and long term list of financial goals along with a budget. Its important to identify what you are spending money on, finding ways to reduce costs, and start building a savings. Its also important to identify any behaviors that affect your finances or prevent you from achieving your goals.

When I first started saving, I started off with a goal of $500.00. When I reached that goal, I increased my savings goal amount until I reached the amount I wanted to have set aside in case of emergency. It was easier for me to start with a smaller goal and work my way up to a larger one. As I achieved each goal, it made me want to keep saving and fulfill more goals.

I also used to spend a lot on unnecessary stuff. Now when I find myself in the store, I ask myself if I want or need the item I am about to purchase. If I purchase this item, what am I giving up? What if I add the amount of the item to my savings goal instead?

I also had to make a commitment that whatever I put in savings I could not touch unless it was absolutely necessary. I opened up a savings account at another institution to help mitigate the temptation of transferring to checking to spend.

Re: Financial Happiness

kaylitaa — Tue, 06 Sep 2016 19:53:31 GMT

Thank you guys for all of the advice, I really appreciate it. I'm definitely going to check out the books mentioned. I came across a Dave Ramsey page on facebook that I followed for a bit, but I'm not really in the mindset of "saving for the future" per say. I’m more of a ‘live in the moment’ type of person, I just don’t want to be broke all the time. I want to be financially secure for life’s curveballs and I want to enjoy things now while I’m still young. Although, I do contribute 6% of my salary to 401k and my employer matches up to 3%. Other than that, I don’t have any savings at all. I did sign up for NFCU and there are no branches around me so I think I’m going to contribute to that account since it will be harder to withdrawal from. I also think just being on this forum and reading everyone’s posts is a form of motivation for me.

Re: Financial Happiness

sarge12 — Tue, 06 Sep 2016 20:41:26 GMT

@kaylitaa wrote:
I'm going to be completely honest. I've been a creeper on these boards for years. Mostly trying to find out what kind of credit card I could be approved for with my terrible credit, just so I would have access to money to buy things I never needed. That’s my problem. I have a huge spending issue. Instead of saving money, I look for things to spend money on. Oh hey, I have an extra $200.00 from my paycheck this month, well let's go to Target and just blow it all. I live paycheck to paycheck and am never ahead with my bills or anything. I have no savings. There are even times were I get paid on Friday and spend it all by the time the weekends over.

I’ve been slowly trying to rebuild by credit since last year and have been successful with working with a company to have all of my collections and negative things on my reports removed. As of today, I have nothing “bad” on my reports. However, I know that my biggest obstacle is the way I think about money. I want to be able to save money without withdrawing it from my savings account a week later. I don’t want to live paycheck to paycheck and I don’t want to stress about money for the rest of my life.

So, for anyone that can relate, what was it for you that gave you a new outlook on your personal finances? Are there any books you read that gave you insight or motivation to change your spending ways? Any advice is appreciated!

For me, I stopped thinking of finances as my money. I always had a good work ethic, so I started thinking of my finances as a business. Does this expense make sense for the growth of the company. What is the cost vs rewards. I wish to have a reputable company with AAA credit rating, will this purchase help or hinder that. I do not want my employee (me) to be unhappy either, so some rewards are a valid expense. I just try to take out the personal element and handle the finances as a job, and to be a successful, I must set goals and meet them. I have income and expense and to be profitable, the income must be higher than the expense. It makes it easier to decide you may need shoes, but the Nike name on the side is an added expense that is not helpful for growth of the business. Because I changed to this mindset, when I became disabled, I am still very financially stable.

Re: Financial Happiness

tacpoly — Thu, 08 Sep 2016 08:31:46 GMT

"Living for the moment" and "saving for the future" are not mutually exclusive. You can enjoy the good life while socking away money for "life's curveballs". You just have to prioritize yourself first.

When I say that, I mean really thinking about the consequence of your spending: being stressed out the rest of the month because you blew all your money in a weekend buying things you don't even care about is not good. Prioritizing yourself long-term requires a major shift in mindset, but if you're not ready to take it on, there are several ways to trick yourself into doing it.

Artificial scarcity / forced savings / pay yourself first: people have suggested opening and funding a savings account that you can't easily access. I would add that you should direct deposit a portion of your salary (5% is a good start) to this account. Then make do with what you have left.

CAUTION -- do not get into cc debt to compensate! But you say you spend what you have so I think you're the kind of person who will spend less if you have less.

Don't look at this savings account often; keep it to once a year. KEEP DOING THIS UNTIL you no longer think of things you can buy or do with the money. When you only feel pride and enjoyment at seeing your savings and your money grow, with no desire to tap into this well for frivolous things, then you are mature enough to handle your money actively.

Once you have that change in how you think about savings, you'll see how much more fun it is to not be living paycheck to paycheck. I have a feeling that being more financially secure will also slow down your thoughtless spending, which I think is partially stress-driven. This in turn will free up more money for life surprises, both good and bad.

I recommend reading "If you can. How Millenials Can Get Rich Slowly". It's a short (16 pages) summary, more an outline really, on how to save and invest for the long term, but he also has a few pages on healthy ways to think about money. His father's answer to the 'are we rich' question is hilarious!

Oh, if you never change your approach to money, one way to stop living paycheck to paycheck is to become filthy rich. But that takes incredibly hard work or incredibly rare luck.

Re: Financial Happiness

lamplight2012 — Fri, 14 Oct 2016 17:43:23 GMT

I know this kind of a late reply, but I figured this needs to be talked about more. Spending $$ is a behavior issue!

i struggled for years with spending $$ on things I didn't need. One of the biggest things that helped me with this was contentment. This doesn't mean be so content that you don't move forward, but to where you plan for the things you want & at the moment be happy with what you have.

My girlfriend makes fun of me sometimes because I'll pick something up in the store, and put it in the cart or carry it, and there are so many times where I'll put it back on a random shelf just because I ran the questions of "Do I really need this? Is it a need or a want"? through my head. Sometimes that adrenaline spikes when you're excited about a purchase, but if you think about it throughout your time in the store, you'll come to the conclusion that you're just impulsive. 95 % of the time I'll put the item back.

Another thing that helped me was thinking about the cost of an item vs how much I make an hour. It's very simple, but very effective mindset. If I want an item that's $50, and I make $20 an hour. That means I worked 2 1/2 hours just for that item. Doesn't make me want to buy anything now, lol.

The book by Dave Ramsey's daughter has helped out a lot. Because it allows you not to be in competition with other people.

Love Your Life, Not Theirs 7 Money Habits for Living the Life You Want Book

Hope that helps!

Re: Financial Happiness

Dalmus — Mon, 17 Oct 2016 16:30:52 GMT

@lamplight2012 wrote:

My girlfriend makes fun of me sometimes because I'll pick something up in the store, and put it in the cart or carry it, and there are so many times where I'll put it back on a random shelf just because I ran the questions of "Do I really need this? Is it a need or a want"? through my head. Sometimes that adrenaline spikes when you're excited about a purchase, but if you think about it throughout your time in the store, you'll come to the conclusion that you're just impulsive. 95 % of the time I'll put the item back.

Heh. I have the same thing happen to me. From the days I spent all my money "because I had it," to today, I've done a complete 180. In fact, I've built my own spreadhseet soley for the purpose of my being able to watch my Total Debt number go down each month.

One thing that REALLY helped me three years ago when I was in danger of falling right back into the cycle that caused me to go BK 5 years ago was actually looking at my CC statements, and seeing that interest charge each month. One October, I actually went through ALL my CC accounts and added up the year-to-date interest charges. It was $1,600. I did the math... That was a Vegas vacation in a NICE hotel with a nice car rental. That's a new home theater system. That's new bathroom tile and paint. That's replacing my aging lead pipe plumbing with PVC.

Putting things in perspective of how much you are costing yourself NOW really helped.

Re: Financial Happiness

Anonymous — Wed, 19 Oct 2016 04:04:40 GMT

@sarge12 wrote:
@kaylitaa wrote:
I'm going to be completely honest. I've been a creeper on these boards for years. Mostly trying to find out what kind of credit card I could be approved for with my terrible credit, just so I would have access to money to buy things I never needed. That’s my problem. I have a huge spending issue. Instead of saving money, I look for things to spend money on. Oh hey, I have an extra $200.00 from my paycheck this month, well let's go to Target and just blow it all. I live paycheck to paycheck and am never ahead with my bills or anything. I have no savings. There are even times were I get paid on Friday and spend it all by the time the weekends over.

I’ve been slowly trying to rebuild by credit since last year and have been successful with working with a company to have all of my collections and negative things on my reports removed. As of today, I have nothing “bad” on my reports. However, I know that my biggest obstacle is the way I think about money. I want to be able to save money without withdrawing it from my savings account a week later. I don’t want to live paycheck to paycheck and I don’t want to stress about money for the rest of my life.

So, for anyone that can relate, what was it for you that gave you a new outlook on your personal finances? Are there any books you read that gave you insight or motivation to change your spending ways? Any advice is appreciated!
For me, I stopped thinking of finances as my money. I always had a good work ethic, so I started thinking of my finances as a business. Does this expense make sense for the growth of the company. What is the cost vs rewards. I wish to have a reputable company with AAA credit rating, will this purchase help or hinder that. I do not want my employee (me) to be unhappy either, so some rewards are a valid expense. I just try to take out the personal element and handle the finances as a job, and to be a successful, I must set goals and meet them. I have income and expense and to be profitable, the income must be higher than the expense. It makes it easier to decide you may need shoes, but the Nike name on the side is an added expense that is not helpful for growth of the business. Because I changed to this mindset, when I became disabled, I am still very financially stable.

This is such a good idea I never thought of before! Thinking of your finances as a business is so smart.

Re: Financial Happiness

driftless — Wed, 19 Oct 2016 04:15:37 GMT

I would add the Richest Man in Babylon, by Charles Conrad, 1926 with many reprints to the reading list.

Re: Financial Happiness

Anonymous — Wed, 19 Oct 2016 04:16:22 GMT

There are many things that happened to me that made me want to change my bad money behaviors. First of all i work for a major financial institution and have been doing so for just over 3 years. It turned out Im very good at it because I give great financial advice. What I realized is I never used to follow any of that good advice so I started practicing what I preach.

Secondly I realized that the clients I helped that were financially sound often only had one credit card if any. They paid it off monthly so had no need for more cards. Their credit scores were above 800 and I was floored. I had always believed you had to have more to have a great fico but when I saw that clients credit report that only had one card and no balance and that amazing fico I was done. I had to have it. I had to do it.

Operation pay off my debt and close all cards but 1 began.

I have to go little by little because I have so much debt. Half of this debt was neccessary due to divorcing and working for a few years earning 35k a year instead of the prior 100k plus. Now I earn about 65k so I have been able to make more progress. Every time I pay off a card I close it. I know I know. You say that hurts my score because it keeps my dti high. I say GOOD. I dont want a good score until I make my dream of 1 card happen.

The other half of my debt was shenanigans. Vacations I felt I earned but couldnt really afford. Massages and perks that I couldnt afford and just keeping myself in denial by not having a physical budget.

I got together with one of my very financially responsible friends and created a budget. Once I saw all of my cc and installment loan payments and bills listed in black and white I really realized I cannot afford too many extras. 10 dollars a week for my group tennis class I can do but weekly massages not so much. I had to make choices and change my life and really look at why I was spending money. I was in a not so good relationship and I was burying my pain in pleasures. It had to stop. And it did.

My dream is still in focus. I have 6 cards left. 2 unsecured installment loans. 1 auto loan. 1 student loan. Until only one cc card is left standing I will keep on budgeting and having good times without it being pricey. I joined a book club and I cook more.

I know this is really long but I hope at least one thing helps you in your situation. Good luck!