Quote:
Originally Posted by Frank Lee
IIRC we already have a frugality thread that degenerated into 8 pages of shaving tips. Come on now, shaving isn't that expensive in the grand scheme of things.
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Sorry Frank (and everyone else), hadn't seen the other thread, but at least I had the foresight to suggest moving the discussion...
As for the frugality side of things, have any of you heard of/followed Dave Ramsey? He is a financial guru and has a talk-show where he basically gives everyone the same advise... Whether or not you like his political or religious views, he has a good process for finances. It's even a simple process and goes something like this...
- GET ON A BUDGET! You have to know where every penny you are making is going, this way there are no surprises or wondering why all the money is gone. He has recommendations as to how much you should be spending in different areas, and has a template you can fill out.
- Pay for things in CASH. Put cash in envelopes, and labels on the envelopes. That way, when the "FOOD" money is gone, you know it. Most people would be surprised how far they can stretch that last $20 if they really try...
- Save up $1,000. This is the emergency fund, in case anything unexpected happens. Examples would be the water heater springing a leak, or the alternator going out on your car, NOT needing new tires or needing to pay auto insurance, you should budget for those.
- Put all your extra money toward paying off debts. Go smallest to largest, unless you owe money to family, then pay them first. This way you get to pay lots of things off in the beginning, and you get to feel a sense of accomplishment.
- Once all your "small" debts are paid off, (with a mortgage being the exception) start saving. Save for your kid's college (so they don't have to experience debt), then save for your retirement (since you can't count on social security).
- Somewhere in there he says to get some good quality term life insurance. He recommends term since it's cheaper, and if you follow his recommendations, there should be no need for life insurance after the term is up! **This is life insurance, not health insurance.**
- The only two things he says you shouldn't deprive yourself of (if you want them) is getting married and getting a house. You don't need a wedding or house that's outside your means, but you don't have to postpone these two to save a bit of money.
I am sure I missed something, but that's the basics. I actually wouldn't call this "being frugal", to me it's just common sense, like the advise you would have gotten if you were alive a long time ago.