money matters...

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DoesntPlayNice Posts : 809 Registered: 12/17/08
Re: money matters...
Posted: Mar 25, 2009 8:45 AM Go to message in response to: mrsJLA

I understand your concern about an allowance or "blow" fund. But for people that already have a spending problem....you can't expect them to NOT spend...that is why there is a "blow" fund. It is better to put aside CASH to spend rather than rack up more Credit Card Debt.

You can't honestly expect someone to stay home EVERY weekend and NEVER eat out...that is why we have that cushion for us :)

Previously Posted as Military Bride.

Back from Iraq and ready to switch out the ACU's for a Wedding Dress!

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: money matters...
Posted: Mar 25, 2009 11:01 AM Go to message in response to: DoesntPlayNice

Dear MB,

I think you're mixing two situations.

A couple who is in heavy debt, is behind on bills, and who has a spending problem, needs to account for every penny and should make the sacrifice to stay home every weekend and never eat out. They had a glorious time while they were living high off the hog on credit cards; now the chickens have come home to roost. (I just love mixed metaphors!)

Another couple who has succeeded in staying with a spending plan, and who is on track to pay off managable consumer debt and whose other bills are all current is in a whole different situation. They absolutely need a "blow" fund where they can spend cash without having to account for, nor worry about, every penny.

I said earlier: We do exactly what you do, except we call it an "allowance". My husband goes to the ATM every Wednesday, like clockwork, and gets his $100 allowance. He can spend that as he pleases; no accountability. He also stashes $20 or so of each week's allowance in his bedside table so once a year he can "blow" it on something expensive.

I do it a bit differently. I wait until I'm down to my last $20 in my purse, then check to see if it's been at least a week since my last ATM withdrawal. I feel I "stretch" it out a bit more that way. Typically I go about a week and a half before needing another withdrawal.

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DoesntPlayNice Posts : 809 Registered: 12/17/08
Re: money matters...
Posted: Mar 25, 2009 11:26 AM Go to message in response to: auntofthebride

I totally understand what you are saying.

I guess I think I am just trying to be practical because I know for my husband and I...we KNOW we are going to spend money and know we are not diciplined enough to stay home every weekend and not spend money....so it is a sort of "cushion" for us. If we account for this spending ahead of time then it is there if we need it. If we don't use it we can pay a bill with it. But we are not hurting and our credit card has less than $500 balance...so we can afford that cushion.

I mean what happens if you forgot your lunch one day at work...who is really going to just not eat? but you didn't account for eating out...so you have that cushion just in case. The "blow" fund could be as little as $10 a week. I wish I could find on Dave Ramseys website what he says about the Blow fund...but I can't seem to find it. I think he called it something else.

But Like I said I totally get what you are saying AOTB...but being on the other end of the stick i see it a bit differently. I just would rather be safe and plan for that cushion rather than thinking I can be diciplined enough to NOT spend outside the budget :)

Previously Posted as Military Bride.

Back from Iraq and ready to switch out the ACU's for a Wedding Dress!

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: money matters...
Posted: Mar 25, 2009 6:44 PM Go to message in response to: DoesntPlayNice

Dear MB,

"...we KNOW we are going to spend money and know we are not diciplined enough to stay home every weekend and not spend money...."

Sure. You are enjoying one of the BENEFITS of having been responsible with your money in the past. Your bills are paid on time, you are saving for the future, giving to charity, and you have discretionary income.

Who cares if you "blow" it (within reason) on restaurant dinners or movies? I sure don't. I do the same.

Stick with the plan. When you get to be my age you can do really great fun stuff like travel. I go to Europe every year. I'm now enjoying the BENEFITS of past responsibility with money.

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LilTuffGirl Posts : 301 Registered: 11/4/08
Re: money matters...
Posted: Mar 25, 2009 8:49 PM Go to message in response to: auntofthebride

We didn't put anything down on our house and got a pretty damn good intrest rate (got it last year). It's all based on my FH's income and we went with a "starter home". I love this house but it is small. We would really like to get land and build our own house and have that as our "forever home" if at all possible. Once I HOPEFULLY pass medic class i'll get a good pay raise and i'm hoping to go ahead and buy the land. Also hoping by the time we are ready to sell this place the land will be paid off so we can get a builders loan and build the house of our dream. Once we sell this place whatever we make off of it will go right back into the builders loan.
We also got this house at an AWESOME price. The owners had 3 dogs and it smelt HORRIBLE. The dogs also chewed some stuff up and.. yea.. a mess. So we've put our time into cleaning it up. The realitor stopped by to see how we were doing and he was majorly impressed. He said we could make a profit off of the house already without a problem :) Although it took me a long damn time to find "the one" when chosing houses. I was ready to scream! The FH just had to come look at them with me from time to time. This one he said before we even looked at it "damnit we are buying this one regardless" lol

I say do what you can when buying a house. If you can't afford the house you want then wait and save. DO NOT count on getting extra money or saying you can cut back on stuff for life. If you can't pay the payments on the money you have now DON'T DO IT!!!
We pay our bills and still have the cash to buy the toys we want :) thats the way I like it!! Although now we have too many toys and not enough garage space for them :( lol

http://www.ezticker.com/ticker/1642/214/20090829/our+wedding/ticker.png

True love never lives happily ever after - true love has no ending

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: money matters...
Posted: Mar 26, 2009 11:47 AM Go to message in response to: LilTuffGirl

Dear TuffGirl

Fantastic!!!

You have a great plan, and I hope it all works out. Excellent.

" If you can't afford the house you want then wait and save. DO NOT count on getting extra money or saying you can cut back on stuff for life. If you can't pay the payments on the money you have now DON'T DO IT!!! "

Absolutely true.

I got similar great advice from a shoe salesman. He said "Buy shoes that fit perfectly in the store." If they pinch you in the store, they will pinch you forever.

A house purchase is the same. If it pinches your budget now, it will pinch your budget forever.

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MrsWilliams2008 Posts : 1,431 Registered: 7/19/07
Re: money matters...
Posted: Apr 8, 2009 10:19 PM Go to message in response to: auntofthebride

Thanks everybody for responding. Keep the comments coming. DH and I have reached our goal and we have an appointment the middle of this month to apply for financing keep your fingers crossed! Anyway: I need some of you all's perspective on FHA and conventional loans. I've read the literature about it, but i'm confused as to what would be better for us. Both have their pros and cons. Tell me your thoughts.

                         Poster Formerly Known as beauti381

http://www.theknot.com/ourwedding/RyAnne Stafford&RobertWilliams, Jr

                              Happily Married since June 21, 2008

                              Happy Together since June 20, 1994

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cyndi33 Posts : 2,585 Registered: 1/3/07
Re: money matters...
Posted: Apr 9, 2009 10:01 AM Go to message in response to: MrsWilliams2008

We went with FHA because of the downpayment. WE paid off debt, but the interest rates were great and even with PMI, the mortgage payment was less than renting a home for us. We bought well within our income ranges, though. Actually, only used one of our incomes. We went iwth a home we wanted to be in, unless something totally unforeseen, until we retire at least. Only work it needed was to finish the basement, and DH wanted to buy a home where he could finish the basement rather than someone else's work. There are a couple things we want to do, but n othing that needs to be done.

FHA for us was the best route. got a low fixed 30 year mortgage that we pay extra on ( but that's voluntary) the payments for PMI aren't bad, and a higher interest rate second loan would have been worse in the end for us than the pmi. We saved a lot this year over last year from the tax write off also (that we didn't get when renting)

If we had the downpayment we would of done conventional (but not a gap one like the 80/15/5 ones) but we figured it was better for us to pay off debts, and have an FHA loan. So we did.

 Proud Member of P.O.O.P.,  People Offended by Offended People

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MrsWilliams2008 Posts : 1,431 Registered: 7/19/07
Re: money matters...
Posted: Apr 14, 2009 3:35 PM Go to message in response to: cyndi33

Thanks for answering cyndi! The more I read, the more i'm thinking an FHA is for us. Anybody know of down payment assistance programs approved by FHA? We have a 3% down payment, we're just interested in other sources.

                         Poster Formerly Known as beauti381

http://www.theknot.com/ourwedding/RyAnne Stafford&RobertWilliams, Jr

                              Happily Married since June 21, 2008

                              Happy Together since June 20, 1994

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