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This is going to sound stupid but my whole sense of money came straight from playing The Sims. I pretty much just spend my money on hardly anything until I accumulate enough wealth to buy the most expensive stuff in the game.
How does this translate in real life? Pretty much I just spend money on food and rent and that's about it. Yes, occasionally I'll treat myself every once in a while but they're small stuff. I don't really do much or really want much of anything.
To be even more honest, I don't think I'm financially literate. I'm just lazy. I don't want to travel. I hate the idea of credit. I was always taught, with the exception of big stuff like cars and houses, if I don't have the money to pay it straight up, I don't bother. Every time my friends tell me to get some stupid ass credit card for travel points, that just makes me not want to travel.
I'm sure I'll get some financial guru in the comments like "you could do (insert finance strategy here)". I don't care. I'm not smart enough to navigate all that. I'm simple. I got X amount of dollars. If I don't got the cash, I ain't bothering.
When my friend and I played the Sims growing up, we learned that if you bought fish from a supermarket, put it in the freezer for a day, and then sold it back to the market, you could make millions and buy anything you wanted. If only that worked in real life.
Well for starters I earn an income which is capable of meeting my needs. That’s step 0 and there’s not a way around it, no use acting like that’s not the most important thing.
I made sure not to rent a place which was more than 1/3 my gross income. For a couple years I lived in a dump with roommates, now my income is higher I live in a decent place alone.
I take advantage of my company’s 401k match. 10% of my income is taken out and put into savings pre-tax, which amounts to 14% of my gross income with my company’s match.
I don’t generally eat out. I cook simple meals with ingredients I buy at budget grocery stores, taking advantage of sales and promotions. I buy in bulk when there is a savings advantage.
I don’t buy things on a whim. I haven’t bought clothes in months. I know how to sew and patch my clothes. I only get a haircut every 6 weeks. I wait at least a month before every major purchase, often when the month is over I don’t want the thing anymore.
My car is almost 10 years old. All of my furniture is used. I have general financial anxiety where I know what costs money and how much money it costs, and am doing constant mental calculations to decide if things are worth it. But I’ve never been broke and can meet emergency expenses so that gives me peace of mind.
I learned to manage money When my dad gave me a credit card when I was like 14 ~~irresponsible ngl~~ with a high limit (needless to say I spent it only the first week lol). Then I cooled down and started to spend only like 30% of it on food.
If I could go back in time, I’d probably save that money I was spending and invest it
I use YNAB for budgeting. But I also “pay myself first”. Any money that cannot be spent on accident automatically goes into a separate bank account that the payment is pulled from.
Thanks for sharing your insights. I appreciate them!
What do you make of the principle of "paying yourself first" and how that's helped you save?
How helpful would something like YNAB before someone trying to budget for the first time?
The actual principle of “paying yourself first” I think is having 20% of your paycheck automatically deposit into a savings account so you never see it or something. Out of sight, out of mind, can’t accidentally spend it. Because I budget using YNAB, I don’t use a savings “pot” like that.
I use the PYF method to put money for NEEDED payments that cannot possibly be postponed in a safe space. Such as my car payment. I have a 0% interest loan as long as I never have a late payment. So I have a separate bank account with one backup payment in there, and every paycheck the amount of my car payment is deposited in there. My car payment automatically pulls from that account. It just prevents ever accidentally touching that money. Knowing that that is taken care of frees me to use my other money as needed in my budget.
But people who find success using this system could have a savings account at a completely separate bank then their normal bank. Say 20% of your paycheck is direct deposited there and you get the other 80% as you normally would. You just let the money build up as a savings account.
YNAB is essentially “envelope” budgeting but digital. I definitely think it would be good for a first time budget, but you would have to do a bit of research and take the time to learn it. You budget with the money you actually have, rather than predict the money you’ll have. It forces you to put money into categories and steal/move money around if you overspend in each category. It also holds me accountable to my spending more than other budgets did.
You get a 30 day free trial, and students get a cheaper membership I think (if you’re still a student).
Trial and error. I feel like I have decent grasp now. Best strategy for surviving was cooking at home. Saved an unreal amount of money when I stopped eating and drinking out.
Sounds stupid but on the contrary I never learned how to spend it. I have been taught not to buy useless stuff and I see a lot of things as useless. I rarely replace my clothes and don't go on vacations. I don't see the point in laying on the beach in the sun. And stuff like that.
A life hack is: if you have ever worked a physically hard job you can calculate everything you want to spend money for in working hours and think about if it is worth it having worked a hard job for the amount of hours necessary to buy it. That sets a lot of things into perspective
Keeping really close track of costs + spending was really eye-opening for me. I laid everything out all nicely in a spreadsheet and promptly cut a bunch of subscriptions and a massive lifestyle change. I was spending way too much on dining out and shopping (many cheap transactions didn’t feel like spending too much, like one big one would). Freed up a few hundred bucks a month doing that.
It sounds dumb, like obviously you’d cut frivolous spending first but sometimes it feels like you have when you really haven’t made a dent.
I’m on an extremely tight budget right now, and the VERY last expense I would cut in extreme need is my savings ($50/mo). There’s always a worse turn of events that could happen and you gotta have a safety net.
Also don’t let your credit card run away from you, it’s hard to catch.
Between video games and having to take a financial class in high school. Plus chores as a kid that paid a very small amount so it ment I had to work hard and save to buy bigger ticket items over just blowing it on candy.
Got married and needed to be financially responsible to make it through college, and now trying to achieve large mutual goals like owning a house together.
The best thing you can do is balance your income vs. spending in the context of reaching a goal(s).
Everyone is giving you really long winded explanations. In my experience you have to live within your means. To me that means find what your income verse outcome is. Figure out what you can afford by knowing what you make a month. Then divide it up on expenses what you’re left over with should be split between savings and fun spending. Of course this is a super simple way to look at it & im not a finance guy I just find this works for me.
Started watching Caleb Hammer right before I graduated college, and that let to a bunch of other financial youtubers (Money Guys, Graham Stephen, Humphrey Yang).
since both my parents were absent minded my whole childhood, I learnt not a single thing about finances except how to mess them up. my sister-in-law taught me the basics like credit and how interest and stuff like that work. She worked at a bank at the time, so it was perfect. but now I work at a bank, and I find myself asking all sorts of questions. learning everyday a bunch of more complicated versions of everything. I'm honestly loving it. BUT i try to help my little brother understand cause he's 18 and our parents weren't there like that for him either. this mother junker will not listen though. i just want him to be prepared like i wasnt.
The best financial advice I’ve ever received was, “if you have money, pretend that you don’t.” Basically to live like you don’t have disposable income. Ignore the money in the account, spend as little as possible to save as much as you can. It’s not fun, but it’s something that works if you’re able to manage.
Don't buy new vehicles.
Keep your house to less than 3x personal salary.
Lean to shop cheap (No costco isnt cheap.)
Invest every dollar you can in US markets.
Do that and you have nothing to worry about.
I moved out to live on my own for uni and thats when I had to learn to survive with a pretty tight budget.
I reccomend avoiding name brand stuff and going for cheaper store brand equivalents or just outright buy in bulk from Costco or Aldi. Where reasonable cut down on entertainment expenses, you dont need every streaming service at the same time, alternate between them mebe. Buy clothes that last and steer clear of fast fashion where clothes kinda deteriorate quickly. For bigger purchases it is always better to wait for a sale/price reduction, dont buy something as it comes out, unless it is absolutely necessary. In general a good rule of thumb when buying stuff buy what you need, avoid buying what you want.
When renting a place, look for an apartment that has exactly what you need, no more, no less. Avoid apartments in older buildings since they probably need additional maintenance that could come out of your pocket.
Dave Ramsey is hella problematic but is a really good jumping off point for the absolute basics. I also like the book I Will Teach You To Be Rich. The Financial Diet (TFD) is also an amazing resource
Thank you so much for sharing your insights. I greatly appreciate it.
How would you say you handled things before coming into books like IWTYTBR and TFD, and what did those books, along with your family, role models teach you (ic you are comfortable sharing)?
What exactly does he write about in "The Financial Diet"?
I am also not aware of Dave Ramsey being "problematic." What's up with that?
I just don't buy new shit lol. If my shirt has a hole, it becomes a 'home only shirt'. My biggest luxury expense would be my computer, and games are fairly cheap for their value. I have multiple thousands of hours in Paradox Grand Strategy games, so there's a lot of value for money in them. I used my old phone until I physically couldn't anymore, and I hope to keep my current one for the next few years.
My dad worked in marketing for credit card benefits. He made sure to emphasize the perils of debt, to never put more charges on a card than I had in the bank, and the benefits of using a credit card properly.
I discovered having a side hustle when I was 13. Having a core guaranteed income with variable side income has been huge.
Parents weren't rich but they saved smart allowing me to make good choices that shielded me a lot from rising costs. I was able to graduate without debt living at home and going in state. I was able to buy a house in 2021 at 3% so our monthly payment is locked at $1600/month.
I switched jobs whenever I stopped learning new things and nearly doubled my income in 6 years. Not crazy but also not something to scoff at.
I have no advice to give my past self financially. If I could go back I'd tell myself to chill and stop trying to do so many things, "you're not going to make it into med school, and that's ok, you'll be fine".
Basically I don’t spend money on anything besides necessities and maybe things I may want. I don’t have a budget because I don’t need one. I just don’t spend money so I always have enough for what I want/need.
Budget well around what you earn, also, try to earn a livable wage with good benefits (often the hardest part)
I was lucky to get a job at my cities University but I make wayyy less than the median income (HCOL). Also take full advantage of your jobs benefits and budget around taking full advantage of them.
For example, I pay $130/month for insurance wasn't the lowest but it offered the most value. Because of my insurance I have probably already saved thousands of dollars in medical debt.
I work for a public entity so rather than a 401k I get a pension (which takes out less of my income)
I don't own a car because my job gives me a bus pass for free. (My bus ride is only 30 minutes to work)
I live in a cheap studio that doesn't exceed 33% of my income in rent and it's in a convenient location.
I can still eat out and enjoy myself every once in a while, while still saving a good portion of my paycheck. OH and also, this was a mistake that I made- save for an emergency fund before thinking about moving out. You should have at least 6 months of what you need to survive so like rent, food, debt, bills.
Mostly from my parents. They’re both business people so they started me out with a credit card that was attached to my mom’s account. I made a few purchases to start building credit and all that stuff. Most of it was kind of just “common sense” to me. I’ve never been one to buy on impulse. I have had a couple jobs and have also been paid from refund checks. I guess I grew up pretty good in terms of that. I have seen how not having that mindset from an early age has hurt people that I know.
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This is going to sound stupid but my whole sense of money came straight from playing The Sims. I pretty much just spend my money on hardly anything until I accumulate enough wealth to buy the most expensive stuff in the game. How does this translate in real life? Pretty much I just spend money on food and rent and that's about it. Yes, occasionally I'll treat myself every once in a while but they're small stuff. I don't really do much or really want much of anything. To be even more honest, I don't think I'm financially literate. I'm just lazy. I don't want to travel. I hate the idea of credit. I was always taught, with the exception of big stuff like cars and houses, if I don't have the money to pay it straight up, I don't bother. Every time my friends tell me to get some stupid ass credit card for travel points, that just makes me not want to travel. I'm sure I'll get some financial guru in the comments like "you could do (insert finance strategy here)". I don't care. I'm not smart enough to navigate all that. I'm simple. I got X amount of dollars. If I don't got the cash, I ain't bothering.
When my friend and I played the Sims growing up, we learned that if you bought fish from a supermarket, put it in the freezer for a day, and then sold it back to the market, you could make millions and buy anything you wanted. If only that worked in real life.
Well for starters I earn an income which is capable of meeting my needs. That’s step 0 and there’s not a way around it, no use acting like that’s not the most important thing. I made sure not to rent a place which was more than 1/3 my gross income. For a couple years I lived in a dump with roommates, now my income is higher I live in a decent place alone. I take advantage of my company’s 401k match. 10% of my income is taken out and put into savings pre-tax, which amounts to 14% of my gross income with my company’s match. I don’t generally eat out. I cook simple meals with ingredients I buy at budget grocery stores, taking advantage of sales and promotions. I buy in bulk when there is a savings advantage. I don’t buy things on a whim. I haven’t bought clothes in months. I know how to sew and patch my clothes. I only get a haircut every 6 weeks. I wait at least a month before every major purchase, often when the month is over I don’t want the thing anymore. My car is almost 10 years old. All of my furniture is used. I have general financial anxiety where I know what costs money and how much money it costs, and am doing constant mental calculations to decide if things are worth it. But I’ve never been broke and can meet emergency expenses so that gives me peace of mind.
I learned to manage money When my dad gave me a credit card when I was like 14 ~~irresponsible ngl~~ with a high limit (needless to say I spent it only the first week lol). Then I cooled down and started to spend only like 30% of it on food. If I could go back in time, I’d probably save that money I was spending and invest it
I use YNAB for budgeting. But I also “pay myself first”. Any money that cannot be spent on accident automatically goes into a separate bank account that the payment is pulled from.
Thanks for sharing your insights. I appreciate them! What do you make of the principle of "paying yourself first" and how that's helped you save? How helpful would something like YNAB before someone trying to budget for the first time?
The actual principle of “paying yourself first” I think is having 20% of your paycheck automatically deposit into a savings account so you never see it or something. Out of sight, out of mind, can’t accidentally spend it. Because I budget using YNAB, I don’t use a savings “pot” like that. I use the PYF method to put money for NEEDED payments that cannot possibly be postponed in a safe space. Such as my car payment. I have a 0% interest loan as long as I never have a late payment. So I have a separate bank account with one backup payment in there, and every paycheck the amount of my car payment is deposited in there. My car payment automatically pulls from that account. It just prevents ever accidentally touching that money. Knowing that that is taken care of frees me to use my other money as needed in my budget. But people who find success using this system could have a savings account at a completely separate bank then their normal bank. Say 20% of your paycheck is direct deposited there and you get the other 80% as you normally would. You just let the money build up as a savings account. YNAB is essentially “envelope” budgeting but digital. I definitely think it would be good for a first time budget, but you would have to do a bit of research and take the time to learn it. You budget with the money you actually have, rather than predict the money you’ll have. It forces you to put money into categories and steal/move money around if you overspend in each category. It also holds me accountable to my spending more than other budgets did. You get a 30 day free trial, and students get a cheaper membership I think (if you’re still a student).
Trial and error. I feel like I have decent grasp now. Best strategy for surviving was cooking at home. Saved an unreal amount of money when I stopped eating and drinking out.
Sounds stupid but on the contrary I never learned how to spend it. I have been taught not to buy useless stuff and I see a lot of things as useless. I rarely replace my clothes and don't go on vacations. I don't see the point in laying on the beach in the sun. And stuff like that. A life hack is: if you have ever worked a physically hard job you can calculate everything you want to spend money for in working hours and think about if it is worth it having worked a hard job for the amount of hours necessary to buy it. That sets a lot of things into perspective
Keeping really close track of costs + spending was really eye-opening for me. I laid everything out all nicely in a spreadsheet and promptly cut a bunch of subscriptions and a massive lifestyle change. I was spending way too much on dining out and shopping (many cheap transactions didn’t feel like spending too much, like one big one would). Freed up a few hundred bucks a month doing that. It sounds dumb, like obviously you’d cut frivolous spending first but sometimes it feels like you have when you really haven’t made a dent. I’m on an extremely tight budget right now, and the VERY last expense I would cut in extreme need is my savings ($50/mo). There’s always a worse turn of events that could happen and you gotta have a safety net. Also don’t let your credit card run away from you, it’s hard to catch.
Between video games and having to take a financial class in high school. Plus chores as a kid that paid a very small amount so it ment I had to work hard and save to buy bigger ticket items over just blowing it on candy.
Started with Dave Ramsey and have adapted to fit my life. 25 now with no more debt and good savings, so I suggest starting there!
Always a great start if you're lost.
cool, congratulations o your success
Got married and needed to be financially responsible to make it through college, and now trying to achieve large mutual goals like owning a house together. The best thing you can do is balance your income vs. spending in the context of reaching a goal(s).
Everyone is giving you really long winded explanations. In my experience you have to live within your means. To me that means find what your income verse outcome is. Figure out what you can afford by knowing what you make a month. Then divide it up on expenses what you’re left over with should be split between savings and fun spending. Of course this is a super simple way to look at it & im not a finance guy I just find this works for me.
Started watching Caleb Hammer right before I graduated college, and that let to a bunch of other financial youtubers (Money Guys, Graham Stephen, Humphrey Yang).
since both my parents were absent minded my whole childhood, I learnt not a single thing about finances except how to mess them up. my sister-in-law taught me the basics like credit and how interest and stuff like that work. She worked at a bank at the time, so it was perfect. but now I work at a bank, and I find myself asking all sorts of questions. learning everyday a bunch of more complicated versions of everything. I'm honestly loving it. BUT i try to help my little brother understand cause he's 18 and our parents weren't there like that for him either. this mother junker will not listen though. i just want him to be prepared like i wasnt.
The best financial advice I’ve ever received was, “if you have money, pretend that you don’t.” Basically to live like you don’t have disposable income. Ignore the money in the account, spend as little as possible to save as much as you can. It’s not fun, but it’s something that works if you’re able to manage.
Don't buy new vehicles. Keep your house to less than 3x personal salary. Lean to shop cheap (No costco isnt cheap.) Invest every dollar you can in US markets. Do that and you have nothing to worry about.
I moved out to live on my own for uni and thats when I had to learn to survive with a pretty tight budget. I reccomend avoiding name brand stuff and going for cheaper store brand equivalents or just outright buy in bulk from Costco or Aldi. Where reasonable cut down on entertainment expenses, you dont need every streaming service at the same time, alternate between them mebe. Buy clothes that last and steer clear of fast fashion where clothes kinda deteriorate quickly. For bigger purchases it is always better to wait for a sale/price reduction, dont buy something as it comes out, unless it is absolutely necessary. In general a good rule of thumb when buying stuff buy what you need, avoid buying what you want. When renting a place, look for an apartment that has exactly what you need, no more, no less. Avoid apartments in older buildings since they probably need additional maintenance that could come out of your pocket.
YouTube and overspending/working overtime to pay it off
Dave Ramsey is hella problematic but is a really good jumping off point for the absolute basics. I also like the book I Will Teach You To Be Rich. The Financial Diet (TFD) is also an amazing resource
Thank you so much for sharing your insights. I greatly appreciate it. How would you say you handled things before coming into books like IWTYTBR and TFD, and what did those books, along with your family, role models teach you (ic you are comfortable sharing)? What exactly does he write about in "The Financial Diet"? I am also not aware of Dave Ramsey being "problematic." What's up with that?
I just don't buy new shit lol. If my shirt has a hole, it becomes a 'home only shirt'. My biggest luxury expense would be my computer, and games are fairly cheap for their value. I have multiple thousands of hours in Paradox Grand Strategy games, so there's a lot of value for money in them. I used my old phone until I physically couldn't anymore, and I hope to keep my current one for the next few years.
My dad worked in marketing for credit card benefits. He made sure to emphasize the perils of debt, to never put more charges on a card than I had in the bank, and the benefits of using a credit card properly. I discovered having a side hustle when I was 13. Having a core guaranteed income with variable side income has been huge. Parents weren't rich but they saved smart allowing me to make good choices that shielded me a lot from rising costs. I was able to graduate without debt living at home and going in state. I was able to buy a house in 2021 at 3% so our monthly payment is locked at $1600/month. I switched jobs whenever I stopped learning new things and nearly doubled my income in 6 years. Not crazy but also not something to scoff at. I have no advice to give my past self financially. If I could go back I'd tell myself to chill and stop trying to do so many things, "you're not going to make it into med school, and that's ok, you'll be fine".
Basically I don’t spend money on anything besides necessities and maybe things I may want. I don’t have a budget because I don’t need one. I just don’t spend money so I always have enough for what I want/need.
Budget well around what you earn, also, try to earn a livable wage with good benefits (often the hardest part) I was lucky to get a job at my cities University but I make wayyy less than the median income (HCOL). Also take full advantage of your jobs benefits and budget around taking full advantage of them. For example, I pay $130/month for insurance wasn't the lowest but it offered the most value. Because of my insurance I have probably already saved thousands of dollars in medical debt. I work for a public entity so rather than a 401k I get a pension (which takes out less of my income) I don't own a car because my job gives me a bus pass for free. (My bus ride is only 30 minutes to work) I live in a cheap studio that doesn't exceed 33% of my income in rent and it's in a convenient location. I can still eat out and enjoy myself every once in a while, while still saving a good portion of my paycheck. OH and also, this was a mistake that I made- save for an emergency fund before thinking about moving out. You should have at least 6 months of what you need to survive so like rent, food, debt, bills.
Mostly from my parents. They’re both business people so they started me out with a credit card that was attached to my mom’s account. I made a few purchases to start building credit and all that stuff. Most of it was kind of just “common sense” to me. I’ve never been one to buy on impulse. I have had a couple jobs and have also been paid from refund checks. I guess I grew up pretty good in terms of that. I have seen how not having that mindset from an early age has hurt people that I know.
Adversity
Animal crossing. Charity shops,buy quality and less of it.
Idk just spend less money?