Financial issues and future plans

[Minimi]

Hi everyone,

I joined this great community already almost 5 years ago, and I haven't been around here for a while again, so I thought to share a little about my life at the moment and some issues to maybe discuss.

Firstly I live again with my parents, after 3 years of living with some friends on my own. The thing is, I haven't done everything right with paperworks and spending, and due to that, I had to humble myself to come home. Also I haven't got a clue what study I want to attain, and due to my financial situation, I'm now working my ass off to get out of depts, before starting school again.

At the moment I'm learning to spend money well, and be responsible in life, globally. But the thing is, I keep wandering around in life about what I want to do. I've done some webdesigning/gamedesigning, I like to play guitar, sing, work with children, work with people, be on my own, psychology, art, and so much more. Due to all these things, I just can't make up my mind. I've done alot of studies and jobs, but always for a short while, because of the big chaos in my head.

On the other hand, I've made some precious friends the last couple of years, wich are real friends for a lifetime, so that's the positive side!

What I'd like to ask you all, is weither you ever been in a financial dept situation, and how you handled it, and if you ever have doubts about finding the right study and future plans. I'm now almost 22 years old, and it feels like a pressure on me to really start studying right now!

[Ryan Timothy B]

I've been hearing the words 'financial debt' for quite sometime in the past few years...  What's going on?  Is it the easily accessible credit cards?  The way cool toys?  Or is the price of living set at an unreasonably high amount compared to the average earnings?

I live with my father.  I haven't actually moved out on my own yet.  Don't plan on it anytime soon.  I often hear my friends telling me that I need to move out, spread those wings a little.. But usually the ones who are telling me to move out are living from paycheck to paycheck, or worse: they are in financial debt as well.  I always have money saved up and I've already bought all the toys I want (with the exception of a motorcycle, I badly want one--just don't really want to go through the whole M-licensing tests and crap).

But one thing I do know, is you should always have a cushion.  You should always have an extra amount of money saved up to be able to pay one month of bills in advance.  That way if anything Ever happens, if you're sick for a few days, your car breaks down, etc, you're not resorting to your credit cards.  You should only use credit cards if you have enough money to pay for it in cash (BUT don't go spending the cash Just because the credit card has just covered the bill for a month).

If you're really in a jam with money, you should consider how important your cell phone is.. why does anyone really need one?  The only reason I have a cell phone is because I drive 120km a day (to work and back), but honestly, why do I even have one?  Sure I have some pretty crazy whopping snow storms and slick roads, but if your car is ever in the ditch, someone is always bound to come along and offer their cellphone.


A friend I work with was telling me he has owed $700 to a credit card for over a year.  The card has been cut up years ago, and he occasionally puts the minimum payment on his monthly bill.
He's a smoker, which is an EXTREMELY expensive habit in Canada, with almost $10 a pack (25 smokes or whatever it is).
He eats out at restaurants on a daily basis.  Which is also very expensive.
He's an impulse buyer.  Buys things he feels he needs, which are usually just 'temporary' until he has enough money to buy a better version of it.

All those habits, plus more, amount to one hefty monthly bill.  I asked him why he doesn't think about getting a second job.  His answer was, "What's the point in earning all that money, if I won't have time to enjoy it?".  And it's absolutely how I imagine everyone else views it too.  But once you realize how hard you've worked for that money, all those long days you've rolled in, you'll easily think twice before picking up an item at the store.

My father is constantly reminding me... "Ryan, when I was your age, I had $100,000 saved up" (I'm almost 25).
And it's true.  He used to work three jobs: a butcher, a bartender, and a mechanic.  Now he has a comfortable enough life to enjoy it.  He takes a weeks vacation every month.  I wish I'd be able to do that when I'm his age.
I'm lucky if I have a little more than a tenth of what he had saved up, when he was my age (considering the state my mutual funds are in).

Anyway.  I live with my father.  I'm really not a very good example of how you should live on your own and spend your money.
But honestly, No one can tell you how to spend your money, but yourself.  You really just have to think twice before spending money on something.  Is it really worth it?  Is it really worth working 1 full day just to buy those really expensive shoes?  (It's funny.. I actually know this girl who spent more money on her shoes than she did her car.  Her shoes were $150, and her car was $100.  The car was a tiny old Ford Festiva)
That's all it pretty much comes down to.  Is it worth it?  Is the brand name ketchup that is twice the amount of the no-name ketchup, even worth it?  Just buy the no-name, save yourself a dollar or two.

[R4L]

We've been in debt for as long as I can remember, but I haven't helped pay anything since I can't get a job out here .

I think everyone is always going to be in debt. You just have some breaks from the hardship of it is all. I think of taxes and getting all that money back as a nice break from debt, but after it's gone it's back to how it was.

Or maybe I'm just bad with budgets.

Just stay away from credit cards, and actually think about those "deals" you're getting on certain things, like cars and household appliances. It can always cost a lot more, and the price tag is never ever right.

[ThreeOhFour]

I'm one of those evil folk who used to work in a bank and lend money to people.

If ever anyone asks me for financial advice, which they often do, I tell them this: Avoid debt, if at all possible.

People tend to confuse want with need, and allow their spending habits to be swayed by this. When you say "I need to buy this", think whether you truly need it, or whether you can go without.

Learning to spend money within your means seems to be a difficult concept for most people to grasp, so try sticking to the simple rule of "If I can't afford it, I won't buy it". It is easy to get yourself into deals and repayment situations that you really cannot afford and did not actually need to enter in the first place simply because of a few impulse purchases.

As for knowing what you want to do when you grow up? 21 years is not that many - you still have a long life left ahead of you, hopefully. My theory is that if you worry about the future too much, it'll catch up with you before you realize, and you'll never end up getting anything done anyway. Enjoy each day as an opportunity to do the things you like, and you'll probably end up achieving what you want to anyway.

[Andail]

My father is constantly reminding me... "Ryan, when I was your age, I had $100,000 saved up" (I'm almost 25).
And it's true.  He used to work three jobs: a butcher, a bartender, and a mechanic.  Now he has a comfortable enough life to enjoy it. 

I agree that it is wise to save money, but sacrifying your entire youth just to be able to kick back later in life might not always be worth it.

To save up $100,000 (if he was your age at around 1980, that equals $250.000 today) by manual labour alone is a tremendous task.

I think it's wise to save up money corresponding to one month's salary as a security buffer. It means you won't have to borrow money immediately if you lose your job etc.

And never ever loan money to buy things, if it's not some kind of investment (like an apartment or a house, that won't drop in value). Only buy things for money that you own.

[Trihan]

Well here's a little lowdown on where I've been for the past few years:

I was at college a few years ago, and decided to buy a new computer to do my coursework on. I also happened at the time to be dating a woman from the US, so I took out a loan with the dual purpose of paying for me to take a holiday to visit her and buy me a new computer.

A few years later I had bought another new computer (because the old one just wasn't good enough to play World of Warcraft any more ) and my mum's washing machine had packed up so I'd bought her a new one, and I had a store card to pay off for some clothes I bought for work. So I took out a consolidation loan to pay off everything, including the remainder of my original loan.

I'm now enrolled on an advanced networking security course that costs just under £6000, which is due in July or so I think. I've paid back about 10% of the aforementioned loan as of this writing (I think, it might be more than that).

At the moment, I'm not in dire straits and I'm not living the high life. I rarely buy new clothes unless I vitally need them, and I've even stopped splurging so much on video games (which is by far my highest expenditure, I just love games)

I moved out of my mum's last year and share a house now with a guy I used to work with. My rent costs me about a quarter of my weekly paycheck. I probably eat out more than I should and I definitely go out with my friends more than I should, but I'm going to cut back on that to save some money.

That said, I honestly have no idea how I'm going to pay for this course...

Sometimes I wish I'd just rode it out with the computer I had, but those are the choices I made and for better or worse I'll live with them and find a way to get by, even if it means selling some of my fancy little gadgets and giving up my mobile phone for a while.

And I would never, ever get a credit card. Don't trust myself with one.

[Ryan Timothy B]

I agree that it is wise to save money, but sacrifying your entire youth just to be able to kick back later in life might not always be worth it.

To save up $100,000 [..] by manual labour alone is a tremendous task.

Well the first lump sum of his money which was earned by working three jobs, he used it for a down payment.  He bought a house, which I believe, had 2 apartments in it.  He rented out the upper floor, and lived in the lower floor.  He later sold the house for more money.  And bought another house.  Doing this about 3 or 4 times, while still working and saving his money.  Then he bought an old grocery store (when he was around 30 years old) which he owned for 8-ish years, until he sold to build his own grocery store.

Obviously--and I tell him this all the time--you can't really do that in today's market.  Real estate doesn't jump as high as it used to with only a few years of owning a house.

[ThreeOhFour]

Obviously--and I tell him this all the time--you can't really do that in today's market.  Real estate doesn't jump as high as it used to with only a few years of owning a house.

It does, actually, depending on where you live.

[kaputtnik]

My sincere suggestion to anybody out there not hypochondriac or depending on prestige: Used stuff. I have assembled almost all of the furniture (except the bed, come on!) in my and my girlfriend's flat from obscure sources like collection stations, bank liquidations (I got an incredibly heavy and pretty oakwood desk for 5â,¬ there), civil amenity sites (= welfare shopping centres, pretty euphemism the dictionary has in store there) , e.g.

To most of you that may sound like I am a bit of a bum, but if you'd see our flat, four rooms completely furnished for maybe 150â,¬ and at the same time very individual, comfortable and welcoming, you wouldn't think so for sure.

Of course, you have to be some kind of nerd to enjoy digging through heaps of scrap to find a perfectly good Italian Hammond organ or to buy an unbelieveably out of style IBM computer that looks like it can barely run Windows 95 but in fact is a power workstation - but that's my way to stay out of debt, and I enjoy it very much. You might say that I also suffer from impulse buying, only in that case it might be 50â,¬ for a battered old drumset I buy and plan to revamp but never do. And I always have to tell myself to stop buying stuff before I drown in it and my girlfriend gives me the "Don't even try to become a weird messy who unsuccessfully tries to repair old cardioid microphones all day and uses vacuum cleaner motors to power broken synthesizers." look again. So far I've managed to avoid broken down cars in the front yard.

Oh, and I also got myself a credit card about a year ago, it's really practical. If you keep track of your spendings, there's absolutely nothing wrong with a convenient method of payment, it even earns me some interest. Which is ridiculous, I know.

[ThreeOhFour]

I so agree with second hand stuff. I managed to get all of my furniture for less cost than you can spend on a single chair! And for the price of one new pair of trousers, one can buy 20 or so used but still very good condition trousers (not that I buy 20 pairs of trousers at once, mind you...)

I have one of those credit cards that is not actually a credit card, and yeah, they're really handy, not 100% pure evil like some would say!

[Ryan Timothy B]

I buy all my work clothes from Value Village.  It's all previously used clothing, equipped with fart stains and urine patches.  Mmmm smells fresh.  Lol  Nah they're all pretty nice clothing.  Usually I find Calvin Klein jeans for around $5, and lots of really warm sweaters.
I feel like a bum shopping in there, but what's the sense in wearing jeans I may have spent $15 or 20 on, just to wear holes in them at work?  I work in a sawmill for christs sake.

I'm cheap