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5 biggest money management myths


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32 replies to this topic

#1 voter01

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Posted 02 February 2005 - 02:47 PM

Anyone want to throw ideas into the pool? What do you think are the 5 biggest myths we are told about money management?



#2 Gingerly

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Posted 02 February 2005 - 04:47 PM

Being in debt is just a fact of life.


Other than a mortgage and maybe a car loan, it makes a lot more sense to just save up for whatever nice-to-have items you want.

And now with credit card interest rates heading upwards, it makes even more sense.

Rediscover the beauty of layaway.

And be ever watchful of those "No payments for XX months!" offers. More often than not, people slip up and end up paying plenty extra than if they had paid cash, or end up having to get a credit card they don't need.

#3 rpatty

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Posted 02 February 2005 - 07:01 PM

1) Work hard and you'll never have to worry about money.

I'm sure there are more, but that's all I can think of right now.

#4 midwest newbie

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Posted 02 February 2005 - 08:53 PM

"Pay yourself first".

doesn't work if you barely make enough to cover the bills. Best advice was to not use the credit cards and only pay the minimum. It will free up more money each month and you won't need to use the credit cards "to get by until payday". Granted it will take longer to pay them off, but if you pay more than the minimum and then have to use the cards because you have no money left, it kind of defeats the purpose of paying more then the minimum.

#5 Blonde Italian Princess

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Posted 03 February 2005 - 09:42 AM

"I need to make more money before I can save."

Paying yourself first doesn't work if you really and truly don't have enough money to pay your expenses. But one problem a lot of people have is that they have no idea where their money is going, and think that they are hard up simply because they are always running out of cash. I think most of us have more money than we really think we do.

One thing I am doing now is trying to honestly track where every penny I spend goes and on what. I am already appalled at how much money goes to Starbucks each month. Guess what? I am giving that habit up, and I am sending the money I would have spent on lattes into my savings account, or toward paying off debt. I won't miss it because it was money I was squandering all along anyway. It can be done.

Now if I could just cut back on my beauty parlor habit, which is the real monkey on my back. Not sure if I am ready for that.

#6 tootie357

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Posted 03 February 2005 - 10:00 AM

yup. i only go to starbucks for treats now. i traded in starbucks for 7-11 coffee. doing my taxes this year, i was amazed at actually how much money we spent during the year.

#7 MrsBrwnsable1

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Posted 03 February 2005 - 10:19 AM

I dropped Starbucks AND 7-Eleven and just went to Sams Club and bought 100 16 oz hot cups with the domed lids and I make my cup of tea every morning before I leave. Total Cost $22.00. That supply last 3 months Saves me the $1.39 (7-11 price) I was spending per day and $83.40 a month. You can find ways to save money. Even the small things help over the long run.

#8 Blonde Italian Princess

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Posted 03 February 2005 - 10:36 AM

I did the math.

Get this: At the rate I was chugging lattes, I would have spent in one year....

$780

On latte. Latte! And I am not even counting the pastries.

$780 would pay off my Neiman Marcus card.

My goal for this year is to give up cheap, stupid luxuries that I hardly even notice. If I am going to splurge, I want it to matter.

#9 Algo

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Posted 03 February 2005 - 11:07 AM

I don't go for starbucks or anything like that but I have and had more often a bad habit of buying junk food all the time and small soda's you get out of the vending machines. Since i've been trying to lose weight I just go to wal mart and buy a gallon of water. $0.58 lasts almost the whole work day!

I too need to track where all our money goes as we have a bad habit of going out to eat all the time. I'm thinking of getting quicken deluxe. I have money 2003 deluxe but it's not my style really. So i'll probably be giving that one away.

#10 tootie357

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Posted 03 February 2005 - 11:12 AM

my dh started buying waters in bulk and we get those crystal lite thingies to go with them. they save a little bit of money over what a soda would have costed and it's much easier on the waistline as well.

#11 bfarber

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Posted 03 February 2005 - 05:05 PM

How about this...
I used to buy a 1 dollar 20 oz soda every day at work. 1 dollar a day, that's not bad right?
Then I began buying six packs of 28 oz sodas (think that's the right size) at the grocery store for 2.99.

Guess what...
$5 a week for 100 oz soda
or
$3 a week for 140 oz

Savings in one year?
Approx $112

On SODA!?! And the bad part is, I get MORE soda buying it this way. :search:
Gave up my capuccinos in the morning in favor of Folgers at home. Don't really know how much that saves me, but I was up to 8 cups of coffee a day before I started trying to improve my health a bit....

#12 flygirrll

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Posted 03 February 2005 - 10:57 PM

I used to buy sodas at work almost every day too. I switched to water a couple months back. We have free alhambra water at work. I also started bringing lunch from home and between the two of those, I am saving alot of money.

#13 bfarber

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Posted 04 February 2005 - 04:12 PM

I try to drink water...I have a lot of dental problems (wanna talk about something that costs a lot of money? :P ), so it's kind of necessary. But I still like a real drink daily (not always soda...actually, instead of buying soda for about the past 4 months I have been buying little juicy drinks, spending the same amount of money).

I almost ALWAYS bring my lunch. I decided, to gauge how much we spend on dining out, to set in MS Money a dining out limit of $25 a month (figured that gets me and my wife two meals a piece at McD's, just for giggles). In Jan, we spent over $100. It's definitely one area I need to watch our spending. :angel:

#14 gigalot

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Posted 04 February 2005 - 05:28 PM

Funny how the health and wealth are entwined.

Another big myth:

You can be rich and not worry about knowing where your money goes.

I guarantee you, wealthy people know where their money is going.

#15 JHowell1976

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Posted 05 February 2005 - 03:59 AM

"Pay yourself first".

doesn't work if you barely make enough to cover the bills.  Best advice was to not use the credit cards and only pay the minimum.  It will free up more money each month and you won't need to use the credit cards "to get by until payday". Granted it will take longer to pay them off, but if you pay more than the minimum and then have to use the cards because you have no money left, it kind of defeats the purpose of paying more then the minimum.

<{POST_SNAPBACK}>

I have been trying for years to explain this concept to people and yet it never sinks in. This is some of the best advice out there. I am convinced that a lot of middle class people have credit card debt because of this.

"Get a less expensive car to save money." That's a favorite myth of mine. If you have a car loan, chances are you're somewhere in the middle of it. If you're like most and finance for 5 years, you've only got 2 years left to pay on it. Keep the car, it'll be paid off before you know it, and then it wont cost much of anything. If you change it, you'll be starting from scratch and have money taken up for another five years. You don't buy stuff to save money.

"I bought it because it was on sale." Buy stuff because you need it. Buying something because it's on sale is no different than buying it because you just wanted it. In fact, it's worse than buying it because you just wanted it, because you're using the fact that it was on sale to justify your impulsive decision.

#16 DHK

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Posted 05 February 2005 - 09:34 AM

Biggest money trap: NOT PLANNING FOR YOUR FUTURE!

You gotta take a long-term approach to your money. If you're in your twenties, you gotta take advantage of your 401(k) - especially if you have a company match, begin an IRA, and buy a home you can realistically afford!

Don't put these things off. Begin PLANNING on these things today for a richer more comfortable retirement you WANT.

#17 really trying

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Posted 05 February 2005 - 11:15 AM

More of a money mistake than a myth:

Keeping the concept of household money and finances a secret. Growing up, my parents never told us kids anything about how the household finances were set up. They never, ever talked about money! I grew up totally clueless and then when I got out on my own I didn't have any concept of a budget, how to save, how to balance a checkbook and needless to say how to manage credit. I knew that if I didn't pay my car loan that they would take my car away so that was always taken care of but I treated credit cards like they were free money.

YOu better believe that I am already teaching my 7 y.o. daughter so that she doesn't fall into the same trouble. She knows that there is a limit to the money. When she wants to buy something that isn't budgeted for I ask her if she wants to give up dance lessons. She always says "no way". Since I just bought a house, we have to watch our pennies even closer.

#18 poemhdr

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Posted 05 February 2005 - 04:21 PM

Really trying, Wasn't discussed in my house either, except for "we don't have the money for that" When I was first married, we both were 19 and totally clueless. I rmember my ex mil getting really angry that I didn't know how to manage a checkbook - we were both writing checks without adding it to the register- I guess she was oblivious to the fact that her son didn't either (she'd never showed him!) I do wish relatives would share what they learn too - my oldest brother knew all about saving for retirement, investing, ccards, etc but never was willing to share his knowledge. It may have been out of respect for our privacy, our family has a defeatist point of view about money in general Kind of "why try, you can never get ahead" but the fact is the ones who didn't go to college are way ahead financially of those who did...I think its strictly from lack of info about what you can do with your money, nothing to do with differences in brain power.

I think one myth is that you have to have a lot of money before you worry about managing it. Learned the hard way it isn't always what you have but what you do/or don't do with it that counts. I only wish I'd caught on years ago, most of what I know I learned here at CB, and getting the internet has made a huge difference too.

#19 SaschaI

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Posted 05 February 2005 - 04:59 PM

Big Myth Number one.

Debt is bad.

The fact is, as pointed out earlier, we're all almost in debt to some degree throughout our adult life. Knowing the difference between good debt (like Real Estate investing loans that generate a ROI) and bad debt (the reason we're all here lol!) can make a huge impact on your life.

Just my contribution.

#20 midwest newbie

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Posted 05 February 2005 - 07:22 PM

I work with a lot of people who keep saying they will invest "once they make more money" and "they have plenty of time later in life".

Big Myth - you don't have to have a lot of money to begin planning for retirement.

#21 JessieLyn

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Posted 07 February 2005 - 12:59 AM

I dropped Starbucks AND 7-Eleven and just went to Sams Club and bought 100 16 oz hot cups with the domed lids and I make my cup of tea every morning before I leave.  Total Cost $22.00.  That supply last 3 months Saves me the $1.39 (7-11 price) I was spending per day and $83.40 a month.  You can find ways to save money. Even the small things help over the long run.

<{POST_SNAPBACK}>

Or buy one or two coffee mugs/thermos things with lids and use them instead of disposable cups... wash, reuse... save more money by not buying more and more cups each month....

#22 JessieLyn

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Posted 07 February 2005 - 01:04 AM

How about this...
I used to buy a 1 dollar 20 oz soda every day at work.  1 dollar a day, that's not bad right?
Then I began buying six packs of 28 oz sodas (think that's the right size) at the grocery store for 2.99.

Guess what...
$5 a week for 100 oz soda
or
$3 a week for 140 oz

Savings in one year?
Approx $112

On SODA!?!  And the bad part is, I get MORE soda buying it this way. :yahoo:
Gave up my capuccinos in the morning in favor of Folgers at home.  Don't really know how much that saves me, but I was up to 8 cups of coffee a day before I started trying to improve my health a bit....

<{POST_SNAPBACK}>

Even better... Buy a water bottle for $1-$2....

and a three liter bottle of soda for 99 cents...

will last a few days, maybe a week depending how much of it you drink...

#23 bfarber

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Posted 07 February 2005 - 03:20 PM

I'm big on 2 liter soda at home (for .99 cents, not sure about differences in economy from here to where you live) instead of soda cans/20 oz bottles. You save a lot buying in 2 liters (based on amount of overall soda you get vs the amount of money spent).

And you wouldn't believe how many times I've bought two liters at gas stations and began drinking out of them in the car (instead of 20 oz sodas) just because you get more for the same amount. :aggressive:

#24 radi8

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Posted 07 February 2005 - 03:57 PM

And you wouldn't believe how many times I've bought two liters at gas stations and began drinking out of them in the car (instead of 20 oz sodas) just because you get more for the same amount.  :dntknw:

<{POST_SNAPBACK}>



I do that too!
Do other drivers look at you like you need to be attending some sort of support group? Lol....

#25 bfarber

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Posted 07 February 2005 - 04:10 PM

roflmao ... no, but my wife sitting next to me thinks it is goofy looking. I figure, hey, spend $1 and get 20 oz or spend $1 and get 2 liters...hmm, it doesn't seem to be that hard of a decision. :P




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