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February 22, 2010


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Wow 70%, I had no idea most people were in that boat!

I blame a lot of our problems on the media, and too many options to spend money. Older generations weren't bombarded with infomercials, and the newest TV type (what is the big thing now LED TVs?), iphones and other tech gadgetry...

The best someone like you can do is to continue what you are doing. Educate couple thru church and the web. Then hope that it spreads from there!

Then again, it might be a good book too... Instead of promising get rich schemes, you could write out how a frugally religious lifestyle can lead to financial happiness in addition to spirital happiness?

Oh hey! Congrats on your speaking engagement!

Great post! THIS is easy for even my 6 and 4 year old daughters to understand.

"Everything should be made as simple as possible, but not simpler." ~Albert Einstein

It's good to see some statistics about how many people live paycheck to paycheck. I'm not surprised that it's around 50%, but a little saddened.

This advice ALWAYS bears repeating and never gets old, no matter which way it is explained! Thanks!

In the first equation "expenses" is a vital component that must be carefully controlled.
Often, for young married people, interest can be a major contributor to "expenses".
Thus it's extremely important to minimize the amount of interest you pay, since you are not getting any goods or services for the money, it's strictly money that you are paying a wealthy person or company for loaning you some of their money.
The first step is to know what interest rate you are paying someone for the privilege of using their money. You then need to try to eliminate the debts you have with the highest interest rates, even though the may be small debts.
When taking on debt you need to research all of the options available to you to ensure that you are getting the best possible interest rate. It's also crucial that you read the contract carefully so that you understand what may happen during the life of the loan. Is it fixed or adjustible, is there an interest rate reset, is there a balloon payment, is there an early payment penalty? You want to avoid surprises later on. It's worth sacrificing in other areas in order to get the best possible rate on a large, long term loan because the interest adds up to a huge amount by the time you make the last payment.
Also if you can make the payment it's always far better in the long run to take the shortest term loan you can, particulary on a large home loan.
Credit Unions should also be investigated they will often have a better loan than a bank.

The discipline to live below your income is the key. It is not much different than the discipline to burn more calories than you consume. Both are surprisingly hard, but doable by just about everyone. Find the motivation, support group or financial tool of your choice and then just go for it.

Bruce Benson

Charles Dickens said it best:
Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
David Copperfield, 1849

While I agree that many people who save don’t know how much as a percentage they save and by knowing they have a much better chance to improve that situation (knowing is half the battle G.I JOE…)

The old saying of saving 10% of your income is more meant for retirement. Which means for most people a 401K. So you should have this deducted from your pay before you ever receive it. Making it much easier to not spend it.

You should pay yourself first, make it line item number one after your taxes. Until you make it a priority to save you wont control your money. You can always find something else at the end of the month to buy. We take 15% for retirement and an additional 15% for longer term but taxable investing right off before we do any budgeting. The retirement is 401K and IRA’s and the other 15% is brokerage accounts and MMA/CD’s. Then we plan for our month. V-Day, Tires and even a pet aren’t unplanned you know Feb14th is VDay every year. Tires wear and you can estimate when they need replacement while owning a pet comes with some expense. Factor these in, knowing when they will happen make them easier to put aside money to use for them later.

I don’t want to put down the formula, just want to supplement for people to see. If you pulled 10% for retirement from gross and then saved another 13% in an emergency fund quickly life becomes a lot easier as those balances add up quickly.

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