Living frugal, practical, saving money and raising healthy children

[webbie]

Many of you may enjoy Quora, a place where I hang out and where the real questions of life (such as this) are answered by many who know things.

Example - if you ask "why does craig of craigslist not make billions from his creation like other internet founders?", the answer is likely to come from Craig himself (not me, of course!).

If you ask "What's Obama really like in person?", you will read multiple answers from staff who actually hung with him in the oval office.

Getting back to the OP - IMHO, it starts with a false premise, so it's difficult to answer properly.

As BB often says, "the good old days, weren't".

When we, the hippies of the 60's, rebelled....it was for the EXACT same reason that the OP mentions, that American society seemed to be a one-way street of Father Knows Best. Of course, it wasn't really like that - but it did seem for many as there was not a lot of flexibility as to the paths in life.

As others have already answered in this thread, things today are perhaps better than any time in my 60 years! I know people (not hippies!) who live every type of lifestyle, from just bumming around and writing or playing music to putting their noses to the grindstone to start businesses. The internet has made most of these things better and possibly easier (more flexibility, more communication).

I know more gay people, more stay-at-home moms AND dads, more academics, more entrepreneurs, more social workers.....and I probably know fewer folks who work in factories (that's another story, but whether most parents want their kids working on assembly lines is doubtful).

There is a subset, which may include the OP, who seem to feel that our society is trying to force feed them ideals and "how to be". I see the opposite. If someone wants to be a lazy slob today, there are more opportunities than ever. Same goes with the other side of the spectrum.

Crime is down. Social ills, such as drug and alcohol abuse and mental health, are more understood and we deal with them instead of locking them away from our sight.

So, IMHO, the thread would be easier to answer if it just contained the frugal part. That's a lesson which has stayed the same through the centuries.

Our kids turned out sane without us ever hitting them or strongly disciplining or telling them what to do. I think the social scientists are correct in that kids are formed between birth and about 3-4 years old. Be the example that you want them to follow - and they will do one of two things. They may follow it....or, they may not. If they don't, perhaps your example is wanting? We all think we know the "right way", but it can't be true that we do.

As fas as savings, that's easy. Don't borrow money for anything except perhaps a house. Don't cut things close. Work smart. Done.

 

[4fire]

I don't have kids but I live pretty good on my modest income. I bought my house three years ago and will have it paid off in a few more years. My mortgage is my only debt.
The biggest financial mistake I see people make is overspending on vehicles and other big ticket items like boats, motorcycles, RVs, etc. It's hard for most people to get ahead when they're paying 500, 600, 700+ dollars a month on their pickup. Of course, that pickup is needed to pull toys that are also costing several hundred a month.
It turns my stomach to think about financing 30 or 40 grand on a car that will be worth a fraction of that by the time it's paid off.
My vehicles were purchased used, with cash, and do everything I need them to.
Saving money by skipping the $4 coffee every morning helps too, but it ain't gonna make up for a rediculous monthly car payment.

 

[DBNH22]

I don't have kids but I live pretty good on my modest income. I bought my house three years ago and will have it paid off in a few more years. My mortgage is my only debt.
The biggest financial mistake I see people make is overspending on vehicles and other big ticket items like boats, motorcycles, RVs, etc. It's hard for most people to get ahead when they're paying 500, 600, 700+ dollars a month on their pickup. Of course, that pickup is needed to pull toys that are also costing several hundred a month.
It turns my stomach to think about financing 30 or 40 grand on a car that will be worth a fraction of that by the time it's paid off.
My vehicles were purchased used, with cash, and do everything I need them to.
Saving money by skipping the $4 coffee every morning helps too, but it ain't gonna make up for a rediculous monthly car payment.

I can't imagine a $500 - $700 a month car payment. Every car I've ever owned had a monthly payment of at most $250. But then I've never felt the need to drive status symbols.

 

[Highbeam]

Saving money by skipping the $4 coffee every morning helps too, but it ain't gonna make up for a rediculous monthly car payment.

This is a big one. Don't sweat the small stuff, it's those big expenditures that really make the difference.

I can't imagine a $500 - $700 a month car payment. Every car I've ever owned had a monthly payment of at most $250. But then I've never felt the need to drive status symbols.

15 years ago I was employed at my first job out of college. I had been there a few years and my high school pickup died. I decided I wanted to buy a plain half ton pickup new from a dealer. The monthly payment was well over 500 bucks per month. This was not some type of 1 ton lifted diesel dually with leather, it was a regular truck. It is not uncommon to see 70,000 dollar trucks on the lot these days with monthly payments well over 1000$. The high price is for NEW, not for function. If the newness is what makes it a status symbol then that's the price but the function is also a status symbol. Heck, even an old beater is a symbol of your status as a frugal buyer.

Oh and I didn't buy the new truck, my current truck was a "status symbol" when it was new and some fool lost lots of money when I bought it 7 years ago for 20% of what a current new model would cost.

 

[begreen]

I brought my lunch to work and never bought coffee. Little things add up. A $4 coffee every work day = $80/month, add to that buying lunch every day for ~$6 and you have a $200/month ($2400/yr) bill. These days there are lots of things like this that nibble at one's wallet. Netflix, Comcast, A&TT, Verizon, etc. all have programs that are just $4/day. Don't pay attention to them and at the end of the month it's "Where'd the money go??".

PS: My pickup truck is officially 20 yrs old this month.

 

[BrotherBart]

This is a big one. Don't sweat the small stuff, it's those big expenditures that really make the difference.

"Don't sweat the petty stuff. And don't pet the sweaty stuff."

- George Carlin

 

[Seasoned Oak]

Oh and I didn't buy the new truck, my current truck was a "status symbol" when it was new and some fool lost lots of money when I bought it 7 years ago for 20% of what a current new model would cost.

My daily driver work truck a 20 year old GM K2500 Silverado. It would cost about $40000 to replace it with a new one. Paid 9K for it 12 years ago,and still worth 5 K . Truck still looks great and runs great with 175K miles on it. A testament to GM truck durability. Very minimal upkeep cost .$333 a year in depreciation,ill take it.
I can afford a new one,but for the life of me cant justify it as this one does everything it needs to superbly. Plus id baby a new one too much so i dont get a scratch on it. If i ever replace it ill buy another one just like it about 10 years newer. Even insurance at $220 a year would jump way, way up if i were to buy new. No thanks.

 

[DBNH22]

This is a big one. Don't sweat the small stuff, it's those big expenditures that really make the difference.



15 years ago I was employed at my first job out of college. I had been there a few years and my high school pickup died. I decided I wanted to buy a plain half ton pickup new from a dealer. The monthly payment was well over 500 bucks per month. This was not some type of 1 ton lifted diesel dually with leather, it was a regular truck. It is not uncommon to see 70,000 dollar trucks on the lot these days with monthly payments well over 1000$. The high price is for NEW, not for function. If the newness is what makes it a status symbol then that's the price but the function is also a status symbol. Heck, even an old beater is a symbol of your status as a frugal buyer.

Oh and I didn't buy the new truck, my current truck was a "status symbol" when it was new and some fool lost lots of money when I bought it 7 years ago for 20% of what a current new model would cost.

Pickup trucks sure are handy when you need them for picking stuff up but most people don't need them for their daily lives. I've never been a "car guy" either. I know some guys that will spend thousands of dollars on performance parts, paint, racing tires etc etc I just look at a vehicle as a means to get from point A to B. My only requirements are that it be reliable, safe and handle well in the snow. I drive a 11 year old Subaru that just went over 200K and people are always asking me why I don't get a new car. It runs fine and I'm not making monthly payments on it. My wife has a take on some of the car guys though. Sometimes we'll be driving and a jacked up pickup truck all done out will pull up beside us or a Mercedes with some guy looking around to see who's looking at him and she'll say "now there's a guy with a small $#@!

 

[Grisu]

I am wondering whether cafeteria, GM and any other workers were and are also so enamored by all the frugality reported here. Unspent money means lost income for someone else. Does reducing someone elses pay really make us all better off?

 

[Seasoned Oak]

I brought my lunch to work and never bought coffee. Little things add up. A $4 coffee every work day = $80/month, add to that buying lunch every day for ~$6 and you have a $200/month ($2400/yr) bill. These days there are lots of things like this that nibble at one's wallet. Netflix, Comcast, A&TT all have programs that are just $4/day. Don't pay attention to them and at the end of the month it's "Where'd the money go??".
PS: My pickup truck is officially 20 yrs old this month.

BG i think were on the same page here. 20 yr old truck & no coffee/lunch bill. Im betting your net worth is more than a lot of people you know who make much higher incomes. Another tip id give is,i never carry my whole paycheck around in my wallet. Iv noticed the people who do,tend to spend it all before the next one arrive. Just a few $ at a time. I love the spenders though, as i make a living,as do many others from their financially challenged lifestyles.

 

[Seasoned Oak]

I am wondering whether cafeteria, GM and any other workers were and are also so enamored by all the frugality reported here. Unspent money means lost income for someone else. Does reducing someone elses pay really make us all better off?

It would be a bad idea to spend foolishly just to increase someones pay. Were all better off when most of us are not falling into bankrupcy. If people become better financial managers then my pay will be greatly reduced. I sell (and finance with my own money) homes to people who have much higher incomes than i do. If you can imagine how that is even possible , iv been at it for 26 years.

 

[Grisu]

It would be a bad idea to spend foolishly just to increase someones pay. Were all better off when most of us are not falling into bankrupcy.

And why do people fall into bankruptcy? Maybe because their income was unexpectedly reduced?

 

[Seasoned Oak]

And why do people fall into bankruptcy? Maybe because their income was unexpectedly reduced?

Or they have no emergency fund ,overspend on a regular basis, or buy more home,car, toys than they can afford. Of course there are people who fall into bankruptcy thru no fault of their own,there always will be but much of the time there is poor planning behind it,or a divorce. Not too many people who live on fraction of their income,and invest and are diversified will find themselves in bankruptcy. My BIL makes a regular middle class income all his life but lives a modest but comfortable lifestyle and has over $1 million invested in stocks and securities. If his company shut down tomorrow it would be no problem. Many of his friends he works with are always broke and 1 paycheck from the street and bankruptcy.But they do have a new truck every year.

 

[Highbeam]

I have never known anyone who went bankrupt due to no fault of their own. Certainly they are out there but this thread is about those who can not only manage to live within their means but also those who do it so well that they can pass on their skills.

 

[DBNH22]

I am wondering whether cafeteria, GM and any other workers were and are also so enamored by all the frugality reported here. Unspent money means lost income for someone else. Does reducing someone elses pay really make us all better off?

Are you serious?

 

[Grisu]

Or they have no emergency fund ,overspend on a regular basis, or buy more home,car, toys than they can afford. Of course there are people who fall into bankruptcy thru no fault of their own,there always will be but much of the time there is poor planning behind it,or a divorce.

Of course there are people who are just plain stupid. When your basic monthly expenses exceed your income you have problem.And for the rest we (the banks) should have risk-buffers that compensate for that. It sounds like you will need that too in your line of business.

Not too many people who live on fraction of their income,and invest and are diversified will find themselves in bankruptcy.

"Fraction of their income" means they spend less than they earn. Little math here: Take an island with 100 people, everyone has an income of $10, for a total of $1000. Now they all decide to save $1 and spend only $9. Everyone's income drops to $9, for $900 total and $100 in "savings". Does that island economy do better now?

My BIL makes a regular middle class income all his life but lives a modest but comfortable lifestyle and has over $1 million invested in stocks and securities.

What are those stocks and securities other than the liabilities (= debt) of someone else? And could he saved as much when other people would not have given him that as income beforehand?

 

[Grisu]

Are you serious?

Very much, because I fall not for the fallacy of composition. If one individual is better off it does not mean that all are better off. In fact, one individual could just be better off because someone else is worse off. Tell me how your income would be if your companie's customers would stop spending money?

 

[DBNH22]

I have never known anyone who went bankrupt due to no fault of their own. Certainly they are out there but this thread is about those who can not only manage to live within their means but also those who do it so well that they can pass on their skills.

I could be wrong but I remember hearing something about the majority of bankruptcies being due to catastrophic illness. Now whether or not this was because the person loses income due to being ill or the medical bills I don't know. I'd surmise that it's a combination of the two. I'd have plenty of sympathy for someone who was living within their means their entire life and then went bankrupt because they got cancer but none for the guy who went bankrupt because the $5000 mortgage payment on his 5500 square foot home just couldn't be met for whatever reason.

 

[Grisu]

I have never known anyone who went bankrupt due to no fault of their own. Certainly they are out there but this thread is about those who can not only manage to live within their means but also those who do it so well that they can pass on their skills.

So it's people's fault if they get sick and can't pay the bill? Medical bills, the No 1 cause of US bankruptcies: http://www.cnbc.com/id/100840148

 

[DBNH22]

Very much, because I fall not for the fallacy of composition. If one individual is better off it does not mean that all are better off. In fact, one individual could just be better off because someone else is worse off. Tell me how your income would be if your companie's customers would stop spending money?

That would be my problem and not my company's customers' problem. My life is my responsibility and no one else's and my family's finances are directed at seeing to it that my family has a happy and secure life rather than propping up the economy at large. Forgive me but I find your logic and many of the statements you make downright bizarre.

 

[Seasoned Oak]

Stocks and securities are part ownership in companies. Not necessarily anyones debt ,but your assets. The US economy is light years more complicated than 100 people on an island or even a million. Factor in trade with other countries and all bets are off. There will always be winners and losers. The question is will YOU be a winner or a loser. THe losers and poor planners are not only losing money but something much more valuable,their time.

 

[Seasoned Oak]

So it's people's fault if they get sick and can't pay the bill? Medical bills, the No 1 cause of US bankruptcies: http://www.cnbc.com/id/100840148

Sometimes it is, aka smoking ,obesity,drug and alcohol addiction ect.

 

[Grisu]

... but none for the guy who went bankrupt because the $5000 mortgage payment on his 5500 square foot home just couldn't be met for whatever reason.

I have no sympathy for a guy who thinks he needs to live in a huge mansion in order to assert his social status. No one can tell me someone really needs that much of a living space (with maybe a few exceptions I have a hard time coming up with). Such houses are just a huge waste of resources. Nevertheless, the inability to not pay the $5000 is due to lack of income all else being equal. Thus, solely a monetary phenomenon and based on the decisions to be "frugal" by others.

 

[DBNH22]

I have no sympathy for a guy who thinks he needs to live in a huge mansion in order to assert his social status. No one can tell me someone really needs that much of a living space (with maybe a few exceptions I have a hard time coming up with). Such houses are just a huge waste of resources. Nevertheless, the inability to not pay the $5000 is due to lack of income all else being equal. Thus, solely a monetary phenomenon and based on the decisions to be "frugal" by others.

Wow that's some severely twisted logic. When someone goes bankrupt because they can no longer afford their mortgage it is not in any way their fault but rather the fault of others who've stopped spending their own money?

Why do I get the sneaking suspicion that you not only would have no sympathy for the guy who lives in a huge mansion but that you also don't think he should have the right to live in a huge mansion which he bought with his own money?

 

[Seasoned Oak]

Much of the market and housing crash was due to market speculation,people borrowing way more money than they could hope to pay back or afford to,people using their homes like ATM machines .flipping houses with no added value.
And business had just as much greed and poor planning and fault allowing liar loans and no equity loans just to reap the commisions and selling junk bonds on those same transactions to the whole world. A giant example of irresponsibility.
And yes a lot of innocents lost their jobs as well and lost their homes thru no fault of their own.
But millions of careful planners did NOT lose everything. And came back to buy into a discounted market at bargain prices. Im in real estate and i didnt make make anything from the crash but i didnt lose anything either.