Do you live within your means and how?

Inspired by the "Can journalists afford to retire?" thread on the journalism only board ...

I'm sure there have probably been threads like this before, but how many of you actually stay within your means? Save money, even a little bit (other than 401K)?

Are we all living paycheck to paycheck?

In the past few months, I've:

* Stopped buying snacks, including diet sodas, at gas stations/convenience stores. You hear about how much smokers spend per year, but snackers are probably just as bad, if not worse.

* Started stashing $25 a week into a savings account.

* Bringing food to the office instead of buying fast food (good for health reasons, too).

* Consolidated our phone plans (wife and I).

Of course, it still always seems like the money runs out before the next payday.

Is anyone here actually doing "well," financially, on middle-class wages ($35,000-$45,000)? How?

 

No, but I made a dumb car decision two Decembers ago, and am upside down in that, which is my own fault. A recent move without moving expenses racked up the credit card debt. I'm attempting to get out of it by being smart, and it is working, albeit slowly.

My tips: keep the credit card stashed until you need it for car/home/etc., and keep doing that stashing 25 bucks away every paycheck. Only, once you get it going, increase it to 30, 35, etc.

Every little bit helps.

 

The $25 a week into a savings account is a good idea, though I will do you one better.

Find a stockbroker who you trust and give him that money to invest for you. When you make more money, increase the monthly amount and if you get a bonus or a big tax refund, give him a portion of it as well. Arrange to have your monthly deposit taken right from your checking account. This will make you put the money away each month and the fact that the stockbroker has the money, it will be harder for you to spend.

If you do this, you will be surprised at how quickly your nest egg (or as I call it, my emergency fund) grows.

 

Good thoughts; one question, does your guy charge you, or is it free because he's a buddy?

 

I'm doing OK.

Got a pretty big house payment, but the payment includes insurance and property taxes (and that pesky PMI, which is a total racket.). I pay $100 extra principal each month. I read somewhere that paying the equivalent of an extra month a year will cut a mortgage term from 30 to 17 1/2 years.

My gas-sucking SUV will be paid for in exactly one year. I use one credit card for gas (keeps the clutter off my bank statement) and pay it off in full monthly. (My trip to the Gulf Coast last month means I'll deviate from this temporarily.)

Other than those, my biggest expenses are my electric bill (under $200 last month! Woo-hoo!), and DirecTV with all the channels and TiVo ($113.65).

 

If you have a credit union at work, just put the $25 each week into that. That way the money comes off before you get you paycheck so you won't even miss it. Once the credit union account builds to a nice amount, then go to a no-load mutual fund company like Vanguard and set up a Roth IRA and invest in a mutual fund.

 

Living within your means is something all types can struggle with Admittedly it's harder for some than others, though. We have neighbors who we know are struggling financially. But they have a nice boat, a nice truck to haul it and an RV to camp in next to it.

Cars and houses are probably the easiest way to save yourself some money each month. If the bank says you can purchase a $300,000 house, buy a $225,000 house instead. If you need a new vehicle, don't get the fanciest one on the lot. We drive a 2001 Nissan Altima and a 2002 Dodge Grand Caravan. My brother, the same one who has mooched off my parents for years, have a much nicer vehicle and gives us a hard time for driving 'old' cars.

But the suggestions of avoiding or limiting soda, fast food, cigarettes, alcohol and other less-than-necessary items is a great step. Getting rid of the land line if you have good cell phone service is another. Cable TV, we found, was something we really didn't miss for a couple of years when we were trying to save for a house downpayment. and our vacations were spent at the Grandparents Bed and Breakfast instead of the Hilton or Super 8.

 

I stopped doing drugs. Stopped drinking. Stopped smoking. I buy music here and there and DVDs here and there, but other than food, gas, rent and the few bills I have, everything goes into the checking account.

For me to have $6,000 in the bank is as big as the Red Sox winning the World Series. It's nice to have that kind of coin if I need it. That said, I should probably move some of that into a interest-yielding savings account, but one thing at a time.

 

That will take you 10-20 minutes online.

 

When you guys talk about a Vanguard and a Roth IRA and a mutual fund, it's like you're speaking Arabic to me. Wouldn't know where to begin to purchase one. Wouldn't know whether it's something you can actually take money out of or if it's in there until you're 65. No clue. Not the slightest!

 

What you'll have to do is start at a minimum with the broker -- probably $250.  There will be an annual charge, but not much.  you should be able to find somebody who is willing to work with you, especially if you are young and want to build a portfolio.  He/she will see that a small account now may turn into a huge investment down the road.

I started at $100 a month with the idea of using the money to eventually buy a house.  My broker -- who was a friend who had just started up in the business -- pushed me periodically to increase the allocation to $150, then $200.  After a few years, when I was getting to a more comfortable area salary-wise, I was giving him $400 a month.  Before I got to that level, I used a good chunk to buy the house.  Ten years later, my account has diversified to the point where I have a Roth IRA (which I am funding to the max each year), another IRA with money from a previous employer, and my all-purpose single account that has some liquid assets and some long-term investments which I then can draw on for emergencies or big purchases.