Anyone have a problem with...

Post Reply New Topic

banks, money, loans, debt, numbers & figures $ in general? I am 21 and living independently but this something I just cannot get my head around. I seem to be getting into serious debt and owing money without really understanding why or how its happened. For anyone else who has this problem what is your advice? Numbers and maths have always seemed like a foreign language i just cant comprehend. Feeling like I need to pay someone to come over and work this stuff out for me?

I can do maths but anything about finance ... it just slips out of my head because I have zero interest.

The same goes for filling in forms.

Funnily enough, I work in the finance sector.

And just don't use the credit card

Organize and systematize. Most of the financial side of living on your own involves paying bills on time, and making sure you have enough money to cover the checks you write for those bills.

Software for personal financial management is one way to organize and systematize, but you can create your own system, or use one found in a book on personal finance management (check your library, as there are at least a dozen to consider, and which one will work for you is something you'll have to figure out).

Basic rule: keep it simple, very simple, so simple that failure becomes impossible.

1. Pay all bills when they arrive.
2. Always have lots of extra money in your bank account
3. Avoid credit cards (as Trwn said)
4. Use cash as much as possible

A little practice combined with a comfortable system should result in success.

Don't use credit cards, avoid loans unless necessary (i.e. student loans), and always have and keep a budget.

I found it much easier to keep my finances straight when most things were paid using cash. I'd draw out what I needed for the week every Saturday, checking the bank balance at the same time to make sure I wasn't going to be broke by the end of the month, and then every time I bought anything, I'd see at a glance whether the wad of money was going down too quickly or not.

Now I use electronic payment...I have a debit card but no credit card. It works, and saves me a lot of time, but I never feel it's quite under control somehow. The bills all come in at different times so it's hard to keep an overview in my head of what might need paying. Every company and organisation seems to have a different system.....e.g. the council tax is paid for 10 months of the year with the first month needing a different amount to all the other months (how stupid is that?).

It's nice to have the electronic feature that pays bills at a point in the future (I hate to pay early because that loses interest, but if I just delay it, I might forget to pay when the due date comes round), but if I use that, I have to mentally subtract the "earmarked" money from the available balance, which isn't so easy, but if I don't do that then I can get unpleasant surprises when the money unexpectedly vanishes from my account.

I've got a special place on a shelf for unpaid bills...I always insist on paper bills, and as soon as they come in, I put them on that shelf, and remove them when they're paid.

One of the best things is that I've always lived quite frugally, and well within my means, so the money's always been there for the essentials. I don't know how anybody copes if they're spending as much as they're getting, always dipping into overdraft and having to watch things carefully all the time to stop creditors slapping charges on for defaulting. The great thing about my method is that I don't need to do any budget planning at all, at least as long as I've still got my job.

21... Yes. Years later I wound up with about $43k in credit card debt.

First, as others have said - don't get credit cards. If you do, then pay it off ASAP. Anything taking longer than 1 payment to pay off is going to get you into trouble. Why? Because *something* is always going to pop up.

Second, nothing helps finances like getting a good paying job. Avoid jobs dealing with social services.

Balancing a checkbook is a PITA. Use an excel spreadsheet mapping out your paychecks and bills. This will help you forecast how much money you have. The moment you open a bill, write it down in the spreadsheet and write a check for it. I date my envelopes at that point organizing them in the order that they are due (so if you're a mailman and see 10-1-1850, that's a bill thats due on Oct 1st, for $1850) and sort accordingly.

The excel spreadsheet method is good for forecasting when you're going to go broke. It can supply just a bit more motivation to tone down spending in bad times, and help identify time when you're going to get 3 checks in a month and can have fun.

But overall, managing finances didn't come easy to me in my 20's.