So what do you recommend doing to NOT be poor? - Page 3 - Mothering Forums

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Old 02-11-2006, 01:28 PM
 
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but how do i start. my cc debt is about5,000. i make enough money to live on and then more. how do i live frugally? the more money i have the more i am thinking about my next vacation or a new outfit for dd or a new comforter for the bed. money can really hinder. what is the first step? help!
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Old 02-11-2006, 02:27 PM
 
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Originally Posted by huggerwocky
I've said it before and will say it again, but not everyone can escape poverty.

I totally agree.
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Old 02-11-2006, 02:34 PM
 
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Originally Posted by jannan
but how do i start. my cc debt is about5,000. i make enough money to live on and then more. how do i live frugally? the more money i have the more i am thinking about my next vacation or a new outfit for dd or a new comforter for the bed. money can really hinder. what is the first step? help!

Some people think she's extreme, but I really like the attitude of The Tightwad Gazette author. (Her life values are inspiring, even one isn't interested in saving twist ties; which the author wasn't. Some of her reader's ideas were extreme, but she herself is very grounded). I also find great inspiration in the book Your Money or Your Life.
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Old 02-11-2006, 03:02 PM
 
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Not me. I worked my ass off during the summer and during school months, and I barely had enough to live, let alone to pay for school.
yeah...there was a time you could work part time and summers and pay for your education but not anymore...minimum wage savings cant touch tuition costs these days.

My brother worked 2 full summers before he went to college and still only saved enough to pay for 2 years(he saved everything pretty much) and had to get loans for the rest. He moved away for work and became a roofer making double what he would ever make with his University degree. He's quite well off actually now.

MY sister had 30,000 in student loans and never worked a day in her field.

I have 8000 left on mine.

My DH is from a well to do family..they paid for his education...except for the years he went back as an adult. He is way better off than I am. No debt from school...that said he's an engineer yet works as a truck drive for twice as much money and half the stress.

We are not poor but we do have a lot of debt. House, car, Big truck, trailer but very little debt that's unsecured(that we didnt' buy something out of and still have) Money ebbs and flows. Hubby is gone a lot these days to make up for being off in christmas but we are ok. We don't have financial stress so I consider us ok.
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Old 02-11-2006, 03:07 PM
 
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Originally Posted by choli
WOW! That's really interesting! We used to do the same - pay any extra money we had against the mortgage. It's our only debt, and I have such a horror of debt, I wanted it paid off as soon as we possibly could. Then the accountant that does our taxes told my dh that it was exactly the WRONG thing to do.... I couldn't follow the logic, but we did stop paying extra on the mortgage. I'm going to research this again, because to me it does make so much more sense to pay off the mortgage. Thanks for posting this!

Well if you have a mortgage with interest at 7% and another loan with interest at 9% or credit cards with super high interest rates at 29% you pay thei higher interest rates off first.

And if you have a mortgage rate of 7% but you could invest that extra $$$ and make 11% return, investment is the thing to do. you would gain.

But for some the interest rate on their loan might be higher than the investment return on a 401k which maybe low(not sure)

We are buying a new house...the interest rates right now are around 4% so we will definitely not pay that off first, our LOC would be a priority and around 6 should it have a balance.

HOpe that made some sense
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Old 02-11-2006, 03:14 PM
 
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Originally Posted by allgirls
..
But for some the interest rate on their loan might be higher than the investment return on a 401k which maybe low(not sure)
..
In our case it is smarter to put money in a 401k, because -
a. company match means instant 50% appreciation.
b. put ourselves in a lower tax bracket.
c. averaging 8% gain (on top of the company match)
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Old 02-11-2006, 03:18 PM
 
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I like the idea of not becoming poor in the first place.. but what if you started out that way? What if you were born into poverty, how are you supposed to get out then?

I've spoken with financial advisors (briefly-- they inevitably charge for actual meetings ) and they've all told me the same thing-- "We can't help you, you don't actually have enough money to live and we have no idea how you can get more." This was before I had kids! I can only imagine what they'd say now...

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Old 02-11-2006, 03:18 PM
 
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We are making a big effort to pay off our debt now, which will be greatly helped by our tax return (yay to kids' credits!). I've started making all DS's food myself, no more sposies for outings, no eating out, etc. One thing that's made a HUGE difference is staying away from the mall. We used to go to the mall almost every Saturday, just for something to do. We ended up spending about 100 bucks almost every time. We actually have a savings now that we stopped doing that.

As far as school is concerned, I have an Associate's degree and I'm halfway to my Bachelor's and I have not paid for a single class. I had a free ride to Marshall University courtesy of a Pell Grant and other grants, which I gave up after one semester to enlist in the Air Force. The AF has 100% tuition assistance while you're on active duty and the Montgomery G.I. Bill once you're out. Another thing that helped me (BIG TIME) is taking CLEP and DANTES tests. They're tests you can take that give you college credit if you pass. Active duty military don't have to pay for them, so I'm not 100% sure, but I think it's about $100-120 to take one. Sounds like a lot, but it's cheaper than taking the class, and some of them give you 6 credits - two classes worth! So if you're good at self-study, they're AWESOME!

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Old 02-11-2006, 03:40 PM
 
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Originally Posted by Asher
Well, not a huge shock, our library did not have "Wealthy Spirit". (They don't have the majority of books I have ever seen recommended on this site. -sigh- ) Is it worth it for me to buy it, you think? Kind of seems like it's defeating the purpose by spending more money! LOL

I did, however, borrow Rags To Riches, Penny Pinchers Almanac, Limbo Blue-Collar Roots White Collar Dreams and The Millionaire Next Door. We'll see...it's a start, anyway!
Who wrote these books?

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Old 02-12-2006, 09:16 AM
 
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moved to frugality and finance...

Look around in this forum - there are LOT's of great suggestions on how to cut costs, decrease consumerism and work toward getting out of debt.
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Old 02-12-2006, 05:40 PM
 
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I totally agree, I am doing online classes for the past 2 years. It makes a huge difference to be able to study on my own schedule. The only thing that bugs me is the price - it must cost the school less than on-camput courses, yet they actually charge MORE, at least at mine. My employer pays for it, but on principle my frugal soul is annoyed... :
I just wanted to respond to this...I work in higher ed, and there's a lot going on behind the scenes to run an online course. The technology infrastructure and the salaries of the people who keep it running are extremely costly. Many schools use Blackboard to run their online courses...did you know that Blackboard (or equivalent software) can cost a school $60-100K or more? And they have to upgrade every few years, seems like. And then there's the salaries of the tech people who administer it and help students (at every school I've worked at, managing Blackboard has been at least one person's FULLTIME job, at I'm guessing at least $60K in salary + benefits). Then there's the pay to the faculty teaching the course. Most faculty are paid more or less by the number of courses they contract to teach, and an online course is often outside of their usual contract, therefore extra $$. It's not like professors just work 8-5 every day and fit the online course in there whenever they can. Well I guess this is all OT but I wanted to explain why online courses that seem like they should save schools money, don't actually.
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Old 02-12-2006, 05:51 PM
 
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Just one thing to add about making more than minimum mortgage etc payments--it also helps your credit rating, so if you DO have to borrow money again at some point you will pay less to do so. (Better credit score often means lower interest rate.)
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Old 02-13-2006, 02:16 AM
 
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Originally Posted by allgirls
yeah...there was a time you could work part time and summers and pay for your education but not anymore...minimum wage savings cant touch tuition costs these days.
I make about three times the minimum wage, and after paying for basic expenses (rent, car insurance, food, health insurance, heat, power, phone and water -- no car payment since both cars are paid for, no cell phone, no cable, etc.) and day care there is NO WAY I could pay cash for my in-state professional school tuition for the year. Just no way. I have a hard enough time making sure that we're all fed and clothed and I have enough for my books at the beginning of the semester, which can run upwards of $1000 every 6 months.

On the other hand even though we're graduate students I don't think I would consider us poor -- we're making rent, bills and food every month at least. And for us at least, education IS the ticket out of poverty. I'll graduate in another year, and double my salary as soon as I pass bar. DH is headed to medical school, but even with a major in microbiology and the lab experience he's gotten in school he's employable at a good wage.

The secret in making college work for you isn't about going to class and getting the degree, it's about using the opportunites you get my being a student to become a complete resume whore -- to intern and volunteer and take campus jobs and chat with people and build yourself a skill set to go with your degree, rather than just drinking beer and belching. The peice of paper it's self might not mean much, but the experiences that you can list out on your resume as a direct result of being a student really, really do.

Spending all of my money and time on this wild, wild life.
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Old 02-13-2006, 04:16 PM
 
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There are so many good ideas in this whole thread, and I think it's good to sift through them and see what works for us.

College - both my husband and I have advanced degrees and yet I can't seem to make more than $7 an hour and he's struggling just to get $11. Why? I don't know; maybe karma, maybe because there's no job security anymore, maybe because I consider being a wife and mother my career and don't give a rat's behind about money and a career....But I do believe in being educated for personal fulfillment. I think you can help more people if you have a sense of the world from the heart. Sometimes a good education or more training can increase that.

Lowering expanses - there's a problem with cutting yourself off from the things you love. Do you need magazine subscriptions? Maybe you live in the boonies and they are your only lifeline to culture. Maybe they just clutter up your house anyway and waste your time. The whole thing about being frugal is that it's not the same as being cheap. It's about making clear cut choices about what's important to you and then finding a way to support that life. I think we all have different needs and wants and once we identify them for ourselves, then we'll know what we can cut and what we can't.

Every world tradition from the Yoga Sutras to the Bible says that giving leads to wealth. They say giving is the very cause of receiving. That that's simply how the flow of life goes. It's not a selfish judgement (oh, I give to receive - rather: if I want to receive life's gifts I should be part of taking care of others).

Now folks may not believe that or understand how that works, but I don't understand how having a good education and training works only SOME of the time, and saving works only SOME of the time, and cutting expenses works only SOME of the time - meaning none of these things works consistently for everyone. So all I'm saying is that if the wisdom of the ages just might work ALL of the time, I'm willing to try it over stuff I know doesn't work all of the time.

And worst comes to worst, if giving only works some of the time, I'm no worse off trying that than any of the other things - but some other people are better off for my having done it.
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Old 02-13-2006, 05:37 PM
 
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Old 02-13-2006, 07:55 PM
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Originally Posted by huggerwocky
I've said it before and will say it again, but not everyone can escape poverty.

Quote:
Originally Posted by UUMom
I totally agree.
Do you have some particular sorts of people in mind, or do you think it's kind of random? I guess I think that people with at least average intelligence and no disabling health conditions can definitely escape poverty. I also think that many people who don't have these two things can also escape poverty, but not all of them.

I also think education is a key, but I would emphasize that vocational education is just as valid a path as traditional academia. If you take a 6 week CNA class, you can get a job immediately at twice minimum wage. Is it a fun job? Probably not. Gross? Definitely, at times anyway. But if you want to get out of povery, sometimes sacrifices are required...

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Old 02-13-2006, 09:39 PM
 
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Originally Posted by DoubleOven
Relocate to a place where housing is on par with your income, since housing is typically the biggest expense. We live in Northern NJ, where a crappy fixer-upper is well over 500K, yet there are places in other states where you can practically get a mansion for 250K, or a modest but nice house for 150K. I also think renting is not a good idea, since you'll never have a chance of getting even a nickel of your money back.
Hmm, I'm not sure about that. Housing prices are pretty extreme where I live, but if I were to relocate to say, Arkansas where prices would be about 1/3, would I be able to get a job in my line of work? If I did, would it pay anything like it pays here?

Part of the reason that housing is expensive is the availability of well paid work.
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Old 02-13-2006, 09:47 PM
 
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Originally Posted by rabbithorns
There are so many good ideas in this whole thread, and I think it's good to sift through them and see what works for us.

College - both my husband and I have advanced degrees and yet I can't seem to make more than $7 an hour and he's struggling just to get $11. Why? I don't know; maybe karma, maybe because there's no job security anymore, maybe because I consider being a wife and mother my career and don't give a rat's behind about money and a career....But I do believe in being educated for personal fulfillment. I think you can help more people if you have a sense of the world from the heart. Sometimes a good education or more training can increase that.
But what do you have advanced degrees in? Did you consider the pay scale for that type of work before choosing that line of study or did you choose it just for "personal fulfillment"? Sometimes you have to make a trade off between the practicalities of life. I would love to study just for the fulfullment of it all, but I make my choices based on my need to support myself. I can always self study those things that I would find more interesting but will not help enhance my skill set.

I think skill set is what it really comes down to. All the education in the world is not going to get you a job if you do not make the effort to develop, maintain and update a skill set that is in demand. It need not have anything to do with academics, if skilled dog groomers are in demand, and you are a skilled dog groomer, you will get well paid work simply because of supply and demand.
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Old 02-13-2006, 10:31 PM
 
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Originally Posted by Dar
Do you have some particular sorts of people in mind, or do you think it's kind of random? I guess I think that people with at least average intelligence and no disabling health conditions can definitely escape poverty. I also think that many people who don't have these two things can also escape poverty, but not all of them.

I also think education is a key, but I would emphasize that vocational education is just as valid a path as traditional academia. If you take a 6 week CNA class, you can get a job immediately at twice minimum wage. Is it a fun job? Probably not. Gross? Definitely, at times anyway. But if you want to get out of povery, sometimes sacrifices are required...

dar
I respectfully disagree.

I think that SOME people can "escape poverty" but that sometimes, no matter how hard people try and how smart they are, they are going to be poor. Some very smart people are born into poverty and never learn how not to be poor. Poverty isn't an individual choice even though some individuals can get out of it- if a really smart person has a whole lot of misfurtune without much support, it really doesn't matter how smart they are. . . Sometimes individuals can escape poverty, but they are the exception, not the rule. Also, it is a whole lot easier for some people to get out of being poor. I strongly believe that the US was built on inequality and depends on poverty and subjugation to maintain its power structures. I also believe that education is a good thing and an excellent step towards empowerment. I just don't agree that everyone (with certain abilities) can control their financial situation. Things are way more complicated than that.
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Old 02-13-2006, 10:46 PM
 
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I respectfully disagree.

I think that SOME people can "escape poverty" but that sometimes, no matter how hard people try and how smart they are, they are going to be poor. Some very smart people are born into poverty and never learn how not to be poor. Poverty isn't an individual choice even though some individuals can get out of it- if a really smart person has a whole lot of misfurtune without much support, it really doesn't matter how smart they are. . . Sometimes individuals can escape poverty, but they are the exception, not the rule. Also, it is a whole lot easier for some people to get out of being poor. I strongly believe that the US was built on inequality and depends on poverty and subjugation to maintain its power structures. I also believe that education is a good thing and an excellent step towards empowerment. I just don't agree that everyone (with certain abilities) can control their financial situation. Things are way more complicated than that.

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Old 02-13-2006, 11:41 PM
 
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Choli - good question. When we got our degrees 25-30 years ago, we were able to get very good paying jobs. I think that's part of my point about college. Even if you get a degree in what's lucrative now, college isn't a guarantee of a future. And some careers require more of a person than is good for a family. Those children are only young a short time, and working hard to pay for a house but never see your kids is what we boomers regretted about our parents' values.

It's tough being old in a world that wants to hire young people. My dad ran into that when he was 55. He developed cancer which he beat in less than a year, but since he'd left his job, he could never get back in the door - too old.
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Old 02-13-2006, 11:52 PM
 
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Originally Posted by the_lissa
Not me. I worked my ass off during the summer and during school months, and I barely had enough to live, let alone to pay for school.


Yeah that was me too I worked every summer, had a academic scholarship to a state university adn am STILL paying off loans.(Unfortunately there were several scholarships given and funds cut to smaller amounts per student so that they could give more scholarships out. And also unfortunately I did was not of a minority status that recieved a weath of those scholarships. So my originally promised $6,000 a year (which would have almost covered tuition) was reduced to $500 a year in my second year. I had already put a year in and decided to finish. So that left a lot of debt. Also workign 3 jobs plus going to school full time (didn't have kids yet) and barely could afford rent adn car payment and insurance. Although it was still sheaper than staying on campus and paying an additional $10,000 a year for housing. When rent was only $400 a month.
Also everyone seems to think that public transportation is readily available for everyone everywhere. Well it;s not. We live 50 miles or so from a large city with public transportation. A small city near us has 1 bus route for people at 7 am and it transports once per day to 2 other neighboring towns. for 8 am and back at 4 pm. So if you need to go out for somethign it has to be an all day event and the cost you spend to go and taking all the kids wiht you woudl be more than the cost of gas to run somewhere 5 miles away to get milk or whatever.

Not trying to be pessimistic but the reality that a lot of people who live in or near cities seem to think exists really doesn't for a lot of people.
I do liek teh debt card idea rather than teh credit card idea Makes you a little more concious of what you spend.
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Old 02-13-2006, 11:57 PM
 
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Originally Posted by rabbithorns
Choli - good question. When we got our degrees 25-30 years ago, we were able to get very good paying jobs. I think that's part of my point about college. Even if you get a degree in what's lucrative now, college isn't a guarantee of a future. And some careers require more of a person than is good for a family. Those children are only young a short time, and working hard to pay for a house but never see your kids is what we boomers regretted about our parents' values.

It's tough being old in a world that wants to hire young people. My dad ran into that when he was 55. He developed cancer which he beat in less than a year, but since he'd left his job, he could never get back in the door - too old.
Well, I'm in my 40s myself (despite being still working on that undergrad degree ), and I constantly keep adapting and adding skills to keep myself employable. Have you thought about researching which skills you could learn to make the knowledge that you already have more marketable? The education you already have is not wasted, you just need to be able to make it have value in the current employment market.
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Old 02-14-2006, 12:17 AM
 
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Hmm, I'm not sure about that. Housing prices are pretty extreme where I live, but if I were to relocate to say, Arkansas where prices would be about 1/3, would I be able to get a job in my line of work? If I did, would it pay anything like it pays here?

Part of the reason that housing is expensive is the availability of well paid work.
I don't agree with this. Yeah, if you are talking moving to Podunk farmland somewhere, but $500,000 houses are not a requirement to have a good paying job. I live in a very large Midwestern city. I'm less than 20 minutes from downtown, and we live in a nice 2000 sq ft 3 bedroom on 1 acre. It wasn't a fixer upper, it was 20 years old and in good shape. We paid $140,000 two years ago, which is about average for a mid level house with a bit of land.

There are plenty of jobs here-we have two of the Big 4 accounting firms, several extremely large banks, a big state university, a large branch of IBM--it's your typical large city. I make about 10-15% less than I would in Washington DC (I looked into moving at one point) and my house cost less than a third of what I would pay there for a home 2 hours out of the city. I make a bit less, but figuring in cost of living I make a *heck* of a lot more than what I would make in a high cost of living city.

I'm honestly with the education thing. If you want to make more money, get a *useful, marketable* technical or bachelors degree. Not art, or business or psychology or history or poli sci or English. If you are getting a degree for the love of the degree, those are great choices! If you are wanting to make more money, go for nursing, accounting, engineering, electrician, plumber, machinist. With an apprenticeship program, you take a few classes and then get paid around $9-11 an hour for a year or two, and then you make really good money. I think a lot of people think "degree=good job" and then when they are working at Mc Donald's with their history degree, they gripe that a degree is worthless. Degrees aren't worthless. Some degrees aren't marketable though

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Old 02-14-2006, 02:27 AM
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Originally Posted by swimswamswum
Poverty isn't an individual choice even though some individuals can get out of it- if a really smart person has a whole lot of misfurtune without much support, it really doesn't matter how smart they are. . . Sometimes individuals can escape poverty, but they are the exception, not the rule.
Maybe we need to agree on what we mean by "can". I do think that it is possible for people to make the choices that will lead them out of poverty. Some people consciously choose otherwise, because they value other things more than they value escaping poverty. Some people don't know that these choices exist, because of bad luck or lack of understanding of the implications of the choices they do make. Many people stop trying, because it just gets too hard to try. I'm not blaming them for remaining in poverty, but I do believe that they can escape.

And as far as this board is concerned, I do think that anyone who has regular access to the internet and is literate (as are all of the posters here) and isn't struggling with a serious health issue can escape poverty and have the resources available to do so. Of course, people often choose otherwise, again, because they value other things more right now.

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Old 02-14-2006, 03:21 AM
 
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Great question. I recommend always living off of one income even if both partners are working. We have always done this and thus it was easier for me to become a SAHM. I see too many friends that buy a house based on 2 incomes and then have kidsa nd that can't stay at home because then they would not be able to pay the mortgage. We never factored in the second income when making financial decisions - it went into savings and now we have a (6 month rainy day fund) to live off of if Dh ever gets laid off.

Also, never buy things on credit or pay off your cards every month. If you can't afforf it then don't buy it kind of thing.

Also, have a house paid for by the time you retire. If you don't then retirment will not be enjoyable and you might have to work. Both of our parents are in this situation.

Track your spending through Quicken or some other software. We track almost every dime and can tell you where our money goes. We also try to stick to a budget every month.

That is all I can think of.
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Old 02-14-2006, 02:28 PM
 
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Quote:
Originally Posted by boingo82
Actually I think a lot of times, college is a ticket to more poverty. You incur massive amounts of debt, often for a degree that gets you nowhere.
I prefer self-teaching for technical trades, college for things it's necessary for. (Like being a doctor..obviously..) but for computer related trades, you're often spending megabucks to learn old technology.
: I was reading an article that broke down using money for college or using it for buying a house without a mortgage. I don't remember the exact numbers anymore, but you save more money by buying a house mortgage free rather than using that money for college and a slightly higher paying job. If you have a mortgage free house, you no longer need that higher paying job to pay the bills. Think about it, how much easier would life be if all of your housing needs are already paid off? My dh and I are getting out of a vicious cycle of not having enough money to buy a house mortgage free because we put all of it to our current mortgage by building our own house. I kick myself for all the money I wasted by going to college (even more so that I'm a sahm now). If I used my college fund for a house instead of college we would have been in a much better place now.
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Old 02-14-2006, 04:51 PM
 
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WOW! I totally disagree about college not being worth it. I value education so much and my degree has opened up so many doors for me both financially and to make me a better person. Plus, without a college education your earning potential is so much less.

My Dh struggled for years to get a college education (10 years to be exact - working his way through with no loans). After he graduated he went from making $28,000 to double that overnight because he could get a better paying job. It was so worth it for us! Now he has Master's Degree and makes even more.

I have a Master's and I am a SAHM and I don't regret my education for one minute! It was worth every dime!
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Old 02-14-2006, 05:05 PM
 
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I still think that college is a waste of money in general, but espically for my career choice. I went to a private college for 12,000 per 3 months to get a certificate in training horses. Before I went I already had 10 years of experience doing that same thing and I had even worked at that job. I also did web design which I taught myself. Both my dh and I have taught ourselves everything we need to survive. Sure if i wanted to be a dr i need college, but for most jobs, you can teach yourself.
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Old 02-14-2006, 05:32 PM
 
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I don't think college is always a waste of money - just that it's not the be-all end-all means of learning, and it's certainly one of the more expensive means.
It's not necessarily a huge waste of $$$, but it is also NOT a guarantee to financial freedom and can definitely put you more in the hole than you would've been without it.
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