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Old 10-28-2008, 06:49 PM   #11
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Ditto, I'd rather earn 3% or more in my HSBC online checking account and get airline miles and hotel points using my credit card rather than having cash sit in an envelope. And what happens if you misplace or lose and envelope? Do you not eat for the month? With a credit card you just call them and they'll send you a new one.

If you're not disciplined, then I can see how the envelope is a good idea, but otherwise, I don't see how the point. How is it different if you have an envelope with $100 in it instead of telling yourself "Don't charge more than $100 at the grocery store today"?

Also, if you don't use credit cards, it's going to be really hard to qualify for a mortgage because you'll probably have a low credit score (unless you've taken out loans for a lot of cars).

Just because they give you a $10k limit on your credit card doesn't mean you should charge $10k.
The bottom line is not having to pay interest. If there's a car you want, save your money and pay cash. You'll pay less for the car. Same with a house, not as easy to do, but it is possible.


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Old 10-28-2008, 07:00 PM   #12
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The bottom line is not having to pay interest. If there's a car you want, save your money and pay cash. You'll pay less for the car. Same with a house, not as easy to do, but it is possible.
I do pay cash for my cars, but not my house. I didn't want to wait until I was 40 to pay cash for my first house.

As far as credit cards, I haven't paid any interest since I got my first card because I pay it off every month.


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Old 10-28-2008, 07:00 PM   #13
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(I always pay cash at local businesses, though. Shop your values!)
This is my point that your airline miles or cash back are not free, you are charged for them by the store you are purchasing at (even if you use cash since everyone else is using credit cards).

But Yes I do have credit cards, several I don't use (but once a year perhaps to keep them active) and one we use for gas. I don't have any problems with a credit rating (Despite never needing a car loan).

If you keep track of your budget on paper/online I think that is great and it works well for you. For me I hate entering every purchase I make to see how much money I have left, I'd rather just look in my wallet (for fun money/restaurant money) or in a drawer and see what I have I can spend.
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Old 10-28-2008, 07:28 PM   #14
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Never considered the envelope approach, but I like it.

I have an overly detailed monthly budget that accounts for every penny we earn a month. From the auto deducted mortgage, to the 4 different savings "systems" i have. The only financing I do not track in it (yet) is the retirement accounts since they are pre tax anyway.

The majority of my real interest earning cash lives in a high yield savings account, and gets a monthly cash dump for our general savings. The gas and groceries are on one debit card, and my wife and I each have a disposable spending debit card for our own enjoyment. I think the cash in the envelope would be great, except I do buy some stuff online. I guess I could dial it all in over time...
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Old 10-28-2008, 07:34 PM   #15
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I will never use a debit card for anything other than ATM withdrawals.

Have Taco Bell Joe get ahold of a bank account number and you'll know what I mean. Screw that!

Cash or Credit only and pay the bill before the interest accrues. Let the CC company leagal department handle the ident fraud if it occurs. At the least, the CC co will drop the charge til' they can prove it was a valid purchase. the banks not so much. Guilty til proven innocent. the money is already gone and they aren't putting it back til you prove theft.
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Old 10-28-2008, 07:34 PM   #16
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I have never liked giving a company my bank info, so I send the money from my bank account (Pay Bills option on the Chase site) instead of letting them pull from my account. If there is ever a dispute they don't have the ability to just take money if they feel like it.

Anyway as for online buying I really only do that for stuff I want, not need (Haven't found a reason to buy groceries online yet...) so what I generally do is buy what I want and then I put the money from my wallet in the front of our drawer with the envelopes, then the next month when we plan to take out the budget we subtract that amount from what we'll go withdraw. A little complication but we only have to do that math once a month.

Oh and my other wrinkle is that any money I can make besides my job and investments I get to spend how I like... on beer stuff (and the same for her). That's kind of a nice incentive for side projects.
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Old 10-28-2008, 08:15 PM   #17
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I don't budget.

I use my credit card all the time and pay it off every month.

I put $75K CASH down on my house then paid it off in 2 years, 2 months...

After all the bills are paid I still save $2500 a month (in a CD) in addition to my work retirement plan.

I'm down $32K in the past weeks in the Thrift Savings Plan.
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Old 10-28-2008, 08:35 PM   #18
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I too am a strict budgeter, but I use spreadsheets rather than the "back of the envelope" for budgeting.

Using my debit/credit card to pay for everyday purchases helps me reign in my spending, because I can export the transactions each month to monitor exactly what I spent. That way I can keep track of where I am wasting the most money (beer).
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Old 10-28-2008, 08:51 PM   #19
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It depends on your makeup. What I mean by that is I can gauge rather easily the amount I spend on a card and pay it at the end of the month, the advantage of this being in the form of a return and the convenience (and added security) of not having to carry my cash. For others it is much easier to "see" the money in front of them. I agree, the budget is a necessity. The only thing that I don't like is someone else can easily find out my spending habits. Fortunately I have nothing to hide, but entertain a random thought for a moment....

....Picture in the future all of your spending in the grocery store tied to a database that is monitoring your spending habits for 'flags'. These 'flags' could be tied into other systems such as health care, insurance, credit scoring. You can laugh, but in France, most banks won't allow you to get a home mortgage without passing a physical. How convenient would it be for a Health company to drop you as a risk say if you continually eat Red Meat or something and have a family history of heart disease. Yes, probably won't happen, but you never know. The upside of this would be that those who are abusing the health care system by continually making selfish choices (say the guy that doesn't give two craps about a heart attack and says "that's what insurance is for" and continues to gorge himself on 70% lean burgers 5 times a week, doesn't exercise and has a family history) could be culled (multiply his case by however many people are out there like that by the amount of money a bypass and all that jazz costs and you can see my point). I know this is all very fantastic, but the current financial Tsunami triggered by careless overextension is proof enough that at one point there will be intervention. If we don't take care of problems at home, we can only look forward to the reduction of personal freedoms.

Sorry for the rant
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Old 10-28-2008, 08:54 PM   #20
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....Picture in the future all of your spending in the grocery store tied to a database that is monitoring your spending habits for 'flags'.
The grocery stores already do this. They use those shopper discount cards to track the spending of their customers. Fortunately atm all they use the data for is to help target their advertising in local communities.


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