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  1. #1
    Join Date
    Dec. 13, 2001
    Location
    Neither here nor there
    Posts
    1,200

    Default How do I build a better financial future?

    All of these threads about the economy, debt-to-spending, etc, have made me think about my own money management -- or lack thereof.

    I am in my late twenties, and for the first time in my adult life I am finally making enough money to think about savings and not just covering my bills.

    I have two low-paid jobs, but working the both of them together means I have enough and a (little) bit more.

    I am a frugal person, and don't live beyond my means, but unfortunately in the past I have not been very responsible when it comes to paying things on time. There was a time in grad school when I REALLY ran out of money and couldn't pay bills, and ever since then have had a bad habit of avoiding them, leaving them to the last minute and letting things default, even if I have the means to pay. The avoidance is bad, but has been a hard habit to break (I am doing better now.). Consequently, I don't know my credit score but it is undoubtedly atrocious.

    I believe that my only remaining debt is a low-interest student loan. (And yes, 'I believe' does mean I'm not sure).

    Right now I am putting my extra money in a tax free savings account, but I can't help but wonder if there are tools I should be using to build a better financial future. I put away a few thousand this year and can conceivably do the same in the future if my employment remains steady (never a given).

    Does anyone have any resources to point me to? I live in Canada, so some of the advice may be general.

    Budgeting, tools to keep track of bills and remind me to pay them, investment advice, programs to look into... lay it on me!
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    "I know nothing with any certainty, but the sight of stars makes me dream." --Vincent Van Gogh



  2. #2
    Join Date
    Mar. 12, 2006
    Location
    Ocala
    Posts
    1,219

    Default

    Look for the book The Total Money Makover by Dave Ramsey. Thats a good start.


    5 members found this post helpful.

  3. #3
    Join Date
    Jun. 9, 2012
    Posts
    121

    Default

    There's a website called Mr. Money Mustache, which is devoted to handling your finances with an the goal of financial independence.

    Set aside an evening every two weeks or once a month, depending on when you get paid, for doing your financial business. Make the event pleasant (it should be, since you're making more than you spend!). Serve yourself your favorite dessert or pour yourself a glass of wine, then go through the bills.



  4. #4
    Join Date
    Dec. 4, 2005
    Location
    washington state
    Posts
    6,517

    Default

    Dave Ramsey has some superb advice for getting started. Also, on Delphi Forums, there is a set who do nothing but encourage fiscal responsibility and have lots of help and encouragement. http://forums.delphiforums.com/nomor...es/?listMode=1

    You mention Grad School, did you finish? What degree do you hold? Can you look for a better paying job?
    The Knotted Pony

    Proud and upstanding member of the Snort and Blow Clique.



  5. #5
    Join Date
    Nov. 8, 2005
    Location
    NC
    Posts
    2,231

    Default

    Living below your means, deferring major purchases until you can pay for them in cash or make an enormous down payment, never buying any vehicle brand new, paying down/off high interest debt before undertaking low interest rate savings/investments, planning menus around what's on sale, taking time to think about possible purchases and perhaps returning another day rather than buying on impulse.
    If I knew what I were doing, why would I take lessons?

    "Things should be as simple as possible,
    but no simpler." - Einstein



  6. #6
    Join Date
    Feb. 20, 2010
    Location
    All 'round Canadia
    Posts
    4,354

    Default

    I always forget to pay bills. Seriously, I just forget.
    Consequently, almost all my bills are now automated. Rent, utilities, cable/internet, car insurance, credit card bills - everything is automatically paid. For the cc I have it set do I pay the full amount, but I believe you can also set it to pay the minimum payment.

    I do tally them up at the end of the year and I've never been ripped off (except the cc, I don't tally it up because it varies, but they send the full statement every month so I can look at it).

    (Oh, and I'm in Canada too, NB. Haven't changed my loc since I moved).



  7. #7
    Join Date
    Mar. 4, 2004
    Location
    Louisville, KY
    Posts
    3,963

    Default

    Most banks have e-billing and e-payment where you can schedule bill payment in advance. You can also schedule automatic transfers from your checking account to your savings. If your bank doesn't offer these things, it's worth changing to one that does. DH and I did last summer, and it's sooo much easier and more convenient. And you save money on stamps.
    Caitlin
    *OMGiH I Loff my Mare* and *My Saddlebred Can Do Anything Your Horse Can Do*
    http://community.webshots.com/user/redmare01



  8. #8
    Join Date
    Jun. 24, 2005
    Posts
    587

    Default

    I'm not an expert on this at all, but I also went through a very bad financial period immediately post-college. My advise to you would be to first, get the facts. I'm not sure how it is possible to not know if you have additional debt, but find out. Check your credit report. The first step of any battle is knowing what you're up against. I know how hard it is to take that step -- during my bad period, I shoved everything in my kitchen drawers and refused to open my bills. But, IMO, nothing really can get resolved until you know what exactly needs to be resolved. It might not even be as bad as you think!

    Beyond that, there are lots of resources, including Dave Ramsey and the others mentioned in this thread. I like mint.com and I TOTALLY agree that online banking and bill-paying is a life/credit-saver.



  9. #9
    Join Date
    Jun. 14, 2010
    Location
    O'Canada
    Posts
    100

    Default

    I'm in the same boat OP and am really not sure what to do with the extra cash.

    I've read countless books and they all say don't just stash it in a savings account. That RRSPs are one of the best ways to save for the future. I just can't get a grasp on RRSPs and don't know where to start. If I'm going to be buying them, I want to know what Im buying and why.



  10. #10
    Join Date
    Mar. 4, 2004
    Location
    Louisville, KY
    Posts
    3,963

    Default

    Also look into starting a retirement account, even if you have a work sponsored 401k. Roth IRA all the way, at least in the US. I don't know what's available in Canada, but there are tons of online brokers that can help you with information to set one up. Ours are with T Rowe Price, and I've been very happy with them.
    Caitlin
    *OMGiH I Loff my Mare* and *My Saddlebred Can Do Anything Your Horse Can Do*
    http://community.webshots.com/user/redmare01



  11. #11
    Join Date
    May. 8, 2006
    Location
    Northern Indiana
    Posts
    752

    Default

    I also highly suggest Dave Ramsey -- my husband and I are in our early 20s and in a better financial situation than many of the older people in our lives. It can be quite the paradigm shift, but, IMO, it's absolutely worth it!
    To be loved by a horse should fill us with awe, for we hath not deserved it.


    2 members found this post helpful.

  12. #12
    Join Date
    Dec. 4, 2005
    Location
    washington state
    Posts
    6,517

    Default

    This is one of the best investing sites I have seen, it is glorious!!

    http://www.fool.com/

    And, the best part of the site is the Fools School, good stuff!!

    http://www.fool.com/school.htm
    The Knotted Pony

    Proud and upstanding member of the Snort and Blow Clique.



  13. #13
    Join Date
    Sep. 24, 2004
    Location
    Piedmont Triad, North Carolina
    Posts
    2,159

    Default

    I have never had any debt besides a home mortgage. I say this not to say how great I am .. but to praise Dave Ramsey's program from a different propective..

    I learned much from him about programing yourself for financial independance & generousity. You can't be generous if you don't have the cash to be. With his sort of program (there are others) you can be wealthy regardless of the level of income.


    1 members found this post helpful.

  14. #14
    Join Date
    Nov. 22, 2003
    Location
    Virginia
    Posts
    7,136

    Default

    Save, save, save. There's going to come a time when you're not going to be able to work, and the more money, etc., you've got socked away, the better. Pretend you make 90% of your income, and put the rest in the bank. That sort of thing. EVERYONE can do it.



  15. #15
    Join Date
    Dec. 31, 2000
    Location
    El Paso, TX
    Posts
    12,167

    Default

    Credit Karma is a website that will pull your credit bureau for free (truly free...no credit card needed for a trial period), and do credit monitoring for free, show where you can save money on lower interest rate credit cards/loans, etc. It gives a credit score but it isn't a FICO, but a Vantage score. Calculates debt to income, and how your credit is trending. Very useful site.



  16. #16
    Join Date
    Dec. 28, 2002
    Location
    From the South
    Posts
    1,133

    Default

    Besides Dave Ramsey's site, also check out Clark Howard's web site. He is the savings, retirement guru.
    Life is great when you can hug a horse.



  17. #17
    Join Date
    Oct. 25, 2012
    Posts
    3,775

    Default

    Go to the nearest office supply and buy a book of ledger paper. Yes, they still make it. 13 column is nice.

    Make each column a category of your ordinary personal expenses. Example:

    Food Fuel Repairs Rent Medical Clothing Pets Entertainment Taxes

    Every time you spend a dollar (I mean EVERY time!) save the receipt, bring it home, and at a set time every evening sit down and log your expenditures into this expense sheet. Keep your bills in a pile right next to it on your desk, and at the same time see if any are coming due. If so, pay them and log that in, too.

    At the end of the month total up each column and see if you like what you're spending your money on, or where you might be willing to save. This should give you a pretty clear picture of where your money goes; and you'll know very soon if you're not spending it in ways that get you real value. Then change!

    Clean up your credit rating by paying each and every bill on time as a matter of personal honor and pride--which is how my parents' generation did it. If you use credit cards, and you should to build your credit worthiness, use them responsibly and with fully informed knowledge of how the system works and how to use it to YOUR advantage--not the banks'.

    Once you have some money beyond basic expenses to invest, find a financial planner who can put you into some good, capital conservation oriented mutual funds like American Balanced or Vanguard. They give very good value and the risk is quite low--in 30 years you'll have a seriously useful income there if you play it right.

    Above all, don't act like the brainless twentysomethings who just blow it all on anything they see in an ad, I-things and designer clothes and silly pointy shoes.



  18. #18
    Join Date
    Jan. 4, 2007
    Location
    TX
    Posts
    40,125

    Default

    Don't own horses, unless you have a very padded reserve account.

    Seriously, get your horse fix from either working with horses or paying for lessons/use of horse.

    Pay every bill the minute it hits your hands.
    Set it on the table in front of you and pay it RIGHT THEN.
    Only way I know that is fail safe.

    Or, make bills payable thru credit card or bank withdrawal, but then you have to check regularly, keep good records of them, to be sure all is ok, no surprises, like mistakes or worse, short on funds.



  19. #19
    Join Date
    May. 4, 2003
    Location
    Canada
    Posts
    13,884

    Default

    I'm the last person to give advice as I've made my share of mistakes...although we have always saved and never lived high off the hog.

    But I think the best thing to is to get one financial advisor who knows your whole financial picture. We had taken advice from here and there and finally, as we near retirement, I wanted a simpler, one-stop-shop. So I asked round and bit the bullet and went to the Royal bank for one of their financial advisors. I think he is ok - I think it was the right thing to do. All these people have to be paid somehow, but putting it all with him he consolidated, sold, moved, etc. I had TFSA's and RRSP's (also being in Canada) and he put them in something called a managed money fund which makes more than regular savings (last month 6.7%). I need a safe, non-speculative place.
    He knows the tax advantages, etc. and I don't have to think or worry any more. The interest is ploughed back in,but eventually, it will go into our bank account with our pensions for spending.

    You are young, and obviously wise. Congrats.
    Proud member of People Who Hate to Kill Wildlife clique



  20. #20
    Join Date
    May. 4, 2003
    Location
    Canada
    Posts
    13,884

    Default

    I'm the last person to give advice as I've made my share of mistakes...although we have always saved and never lived high off the hog.

    But I think the best thing to is to get one financial advisor who knows your whole financial picture. We had taken advice from here and there and finally, as we near retirement, I wanted a simpler, one-stop-shop. So I asked round and bit the bullet and went to the Royal bank for one of their financial advisors. I think he is ok - I think it was the right thing to do. All these people have to be paid somehow, but putting it all with him he consolidated, sold, moved, etc. I had TFSA's and RRSP's (also being in Canada) and he put them in something called a managed money fund which makes more than regular savings (last month 6.7%). I need a safe, non-speculative place.
    He knows the tax advantages, etc. and I don't have to think or worry any more. The interest is ploughed back in,but eventually, it will go into our bank account with our pensions for spending.

    You are young, and obviously wise. Congrats.
    Proud member of People Who Hate to Kill Wildlife clique



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