KiwiFarms Budgeting Thread - If you're a poorfag, come to this thread for financial literacy.

[Osama Bin Laden]

A big thing I learned growing up is how to budget. It's one of the main responsibilities that a reasonable adult should do. Are you making enough money, but don't know how to pay bills? Have you fucked off medical bills until they went to collections, and now you're getting calls from indians about how you owe $700 for a one-time hospital visit?

Okay Osama, I have accepted that I am financially retarded. What should I do?

You need to examine how much you are bringing in (either by yourself or if you're together), and how much total expenses are in the household. Every working man should be aware of how much they are bringing home. You can use a budgeting app, a spreadsheet, or if you're a boomer, just write it down.

Wants vs Needs

On paper, this should be an extremely easy thing to understand if you are someone with self-control. I will explain to the class what a want vs a need is. You NEED food in your house, you NEED water and power, you NEED a place to go home too. You want expensive clothes, you want a brand new car, you want a Disney+ subscription, you can watch the latest Marvel slop. If you are someone who is struggling with money, you need to make sure your basic needs are met before you can even think about splurging on shit that can wait.

For example, if most of your income is being spent on ordering takeout, learn to fucking cook. Most of my advice can be dumbed down to "don't be lazy, and be motivated". DoorDash and other apps like this are going to overcharge you for some illegal to bring (if you're lucky) warm food to your doorstep for the sake of convenience. You are paying for the convenience of someone bringing food to you. If you can afford a lifestyle like that, so be it. But you're poor, so you don't need that. Don't be afraid to shop around at food donation stores or a cheap supermarket in your area. Despite food costs being high, it's still way cheaper to cook meals than to eat out.

-It's always good to stock up on dried/canned beans, dried pastas, canned tomatoes, frozen vegetables, and onions and potatoes. Get some basic seasonings (salt, pepper, cheaper seasoning blends). It's not the most ideal, but if you're trying to get out of debt, it's better to sacrifice a bit of flavor. Once you get out of debt, you can start to splurge a bit on better ingredients.
-Meal prepping is king for saving money. Same with soups/stews.

Emergency Fund

One of the main things that I try to tell people around college age is that you always want to have a nest to fall back on when shit gets rough. I always try to recommend if you are someone who hasn't been able to purchase a house yet (especially in this market), you should have a nice emergency fund before you decide to buy a house. Your car breaks down, an unexpected bill pops up, or you just need extra money for a bill you were unable to pay right now. Even if you aren't able to put much away (around $500) in a high-yield savings account, putting $25/$50 each paycheck is still better than no money in a savings account.

Pay off high-interest loans first

A main thing that kills a lot of people in debt is interest rates. It's always the interest rates. If you are planning to knock off debt, I would strongly recommend making payments on high-interest credit cards and/or loans first (after bills, of course) because you are going to be spending more money in interest than the actual debt. Try avoiding paying the mininum, If it's easier for you, try and knock out all your small bills first, and then you can take on the high-interest debt.

Credit is King... until it's not

A big thing I try to pride myself on is having good credit, because you don't always have cash on hand to buy things. It's easy to overwhelm yourself with credit card debt if you don't know how to manage it. If you do it right, you're able to build your credit score, and banks will take you more seriously as a lender. If you have low credit, such as in the 500 range, it will take a while to get it back up. However, this is where setting a goal and having motivation come in. Let's say your credit score is 550, and you want to hit 600. You've already set a goal; now you need the motivation to reach there. Think of how stress-free your life would be without debt.

Invest in the Future

While having a emergency fund, it's important to have a Roth IRA (or a traditional one). You can just throw money into that account and allow the account to make money. It's easy to invest if you don't think about it. I put money in it somewhat regularly so it's nice to come back every few months and see how much it's grown. You always want to plan for the future because you never know what could happen to you.

If anyone else has money advice, feel free to leave it below.

 

[GotFriedBy]

i owe 5000 dollars to a hospital for an EKG
luckily I will never pay it because I'll never go back to the USA
my budgeting advice is just never pay

 

[tygressofaera]

The ducks at the pond are literally free, it's not just a meme. But most of them are just useless males.

You can get chicks at the feed store for a dollar if you wait for them to start feathering out.

 

[࿕࿕࿕]

I try to use this site less than 2 hours a day

 

[Squanto Airi]

For example, if most of your income is being spent on ordering takeout, learn to fucking cook. Most of my advice can be dumbed down to "don't be lazy, and be motivated". DoorDash and other apps like this are going to overcharge you for some illegal to bring (if you're lucky) warm food to your doorstep for the sake of convience. You are paying for the convience of someone bringing food to you. If you can afford a lifestyle like that, so be it. But you're poor, so you don't need that. Don't be afraid to shop around food donation stores, or a cheap supermarket in your area. Despite food costs being high, it's still way cheaper to cook meals than to eat out.

Cooking isn't that hard either, unless you're trying to do more advanced cookery that you see on sloptok.
-It's always good to stock up on dried/canned beans, dried pastas, canned tomatoes, frozen vegetables, and onions and potatoes. Get some basic seasonings (salt, pepper, cheaper seasoning blends). It's not the most ideal, but if you're trying to get out of debt, it's better to sacrifice a bit of flavor. Once you get out of debt, you can start to splurge a bit on better ingredients.
-Meal prepping is king for saving money. Same with soups/stews.

a spreadsheet

I am thankful that my dad was able to make a spreadsheet for me (back when I was more retarded than now).

 

[FlappyBat]

If you get tired of running your budget in Excel and don't want to shit out $15 a month subscription for a basic budgeting app that should be free, take a look at Actual Budget. If you pair it with simplefin, you can get the capabilities of most of the other subscription budget apps for just over a dollar a month. Or you can import stuff manually for free.

SimpleFin is pretty nifty on its own if you can program and want to run stuff yourself, allowing you to pull your financial data from most major organizations through an API.

The only downside I've run into is Actual Budget doesn't play nice with brokerage account integration with SimpleFin. It can track the transactions fine, but doesn't track the appreciation, so you have to go in and manually adjust. You can also do things like track loans like mortgage principal through it.

 

[ZealotCrustacean101]

Don't buy what you can cook.
Don't cook for taste but for nutrition.
Every buy carries an unexpected extra expense.
Nothing is as cheap as it looks.
You always have to give up something you want for something you want more.
When things just can't get any more expensive, they will.
The best way to lose your money is to assume you are spending it well.
The worst spending habits in your daily life are the least obvious.
Only the dead always maintain a net positive.

Good times end too quickly. Bad times go on forever. The more you think about money, the less sane you become. Enjoy what you have and think of what could go better.

 

[Judge Dredd]

learn to fucking cook

Boomer take. It's like when they say "Just don't buy coffee, that's £98 a week saved you can use to-". It assumes the average person is buying two £7 Starbucks every day.

Some people don't have the time, or the space, to cook. And cooking can get quite expensive in it's own way. eg. The cost of making home made bread vs buying a loaf at the super market. "It'll pay for itself in the long run!". Maybe after about 400 loafs. Which might be worth it if you're eating a loaf a day.

I think better advice here is to figure out how cheap you can go without compromising on quality. Brand name things that are generic products are usually not worth the money. eg. Orange juice is just squashed oranges. There's no difference between the brand name bottle for £6 and the super market own brand that's £2.


In a more general sense. When it comes to hobbies, you can get away pretty cheap provided you don't chase the latest slop, or fall into FOMO. FOMO (fear of missing out) is a business model a lot of companies use these days and the FOMO is pretty much never worth it. Consoomers will often try to defend their irresponsible spending and lack of control with insults like "ur just poor" or by making excuses about quality or value that doesn't exist.

 

[888Flux]

Some people don't have the time, or the space, to cook. And cooking can get quite expensive in it's own way. eg. The cost of making home made bread vs buying a loaf at the super market. "It'll pay for itself in the long run!". Maybe after about 400 loafs. Which might be worth it if you're eating a loaf a day.

Bro, please tell me this is a joke.

What are you eating on a day to day basis. Cooking is not that hard. There are one billion cooking videos on YouTube that you can find and pull up, for free. You can't equate "making your own bread" to "making your own meals and not eating fast food everyday".

With regards to time or space - You don't need very much. In fact there are methods of cooking where you don't have to do anything at all. A slow cooker / crockpot is a good appliance for this.

 

[Osama Bin Laden]

Some people don't have the time, or the space, to cook. And cooking can get quite expensive in it's own way. eg. The cost of making home made bread vs buying a loaf at the super market. "It'll pay for itself in the long run!". Maybe after about 400 loafs. Which might be worth it if you're eating a loaf a day.

take one day to meal prep for the week

 

[FlappyBat]

Boomer take. It's like when they say "Just don't buy coffee, that's £98 a week saved you can use to-". It assumes the average person is buying two £7 Starbucks every day.

Rotisserie chicken already cooked at the store, frozen veggies, and a bag of potatoes is cheap as shit and trivial to make into 4 or more nutritious meals with just a microwave. Grab a stick of butter for the veggies, sour cream for the potatoes, and your favorite bottle of BBQ sauce for the chicken and you are eating better than 75% of the country.

 

[harbringer883]

Rice, tuna and beans are cheap.

 

[Robotic Kiwi]

Some advice to add to the thread, and adding to what @Osama Bin Laden said:

Don't "keeping up with the Joneses" (live within or under your means)
basicly keep your envy in check. It's good to want better for youreself, but know your limits. Just because Susan has a designers bag doesn't mean you should get it too, or you can afford it. Trying to "blend in to a lifestyle" because other people have it is a good way to get yourself into debt. You should be living under your means, at least until you reach the savings buffer(see below), so when unexpected bullshit happens that costs money ( like it usually does) you (should) have amassed some buffer so you can afford that financial bump in the road of life.

Have a savings buffer
@Osama Bin Laden already mentioned something like this, but you should also have a goal of having a minimum 6 months Savings buffer for your current lifestyle to fall back on if you get laid off from your job, and that's a underestimate nowadays, as it can take longer sometimes to get hired, depending on your circumstances. You just got to start working towards it to prepare for the worst as shit happens and you want to avoid being a debt slave if you can help it.

It takes quite bit of time to get a job you like, and unless you want to do backbreaking shitty jobs to prevent you from becoming homeless, you need to have a buffer so you can focus on the important stuff. You do not want to be stressing out over money, you want to be focusing on getting a job. Its recommended to put some of this in a Checking account for quick access, and the rest in a high yield savings account to combat some of the inflation that will occur over time.

Don't buy junk you do not need (Impulse Buying is BAD)
In retail, they have areas and products for impulse buying. Things that are at the register, or along the main walkway of a store that are useful, but you really didn't come into the store to buy. Are you going to let some soul-less corporation manipulate you into buying bullshit you really don't need, or are you going to ignore the various temptations / upselling (suggesting add-ons that go well with that product / project) offered and buy only what you came to the store for? The goal is for them to sell you as much as they can, regardless if you can afford it, always remember that.
Its harder for some people than others, as peer pressure, impulse control, and the use of credit tends to make overspending more common then you would think.

Avoid Klarna and other pay later offers if you can help it
There are people out there that break up payments into manageable chunks over the course of weeks or months. Normally this is ok for some things, but some people are financially illiterate, naïve, or think paying off debt with more debt will save them (it rarely does), it is a clusterfuck waiting to happen.
Avoid anything that is Buy Now, Pay Later as a general rule, as this isn't your saving grace. It is only really good if you are absolutely sure you can pay off the installments, including the surprise bullshit that may pop up, but that scenario is rarer than you think nowadays. Best to avoid it whenever possible.

Spoiler: Additional videos on the subject

When Exploiting The Poor Backfires...Klarna's $40B Meltdown
The rise and fall of Klarna, as well as the pitfalls in the "I will deal with it later" attitude when shopping. Recommended viewing

The Debt Crisis Is Going To Destroy Society Forever
An educational video on debt issues, Debt Crisis and the dangers of buy now pay later. Its branding is the typical doom and gloom blackpill clickbait that some people search for nowadays, so keep that in mind when consuming this material.

Minimum payments increase after 0% APR Introductory Period (Surprise Minimum Payment Trap)
This should be obvious, but not to those just getting a credit card with no financial guidance. Don't be fooled by the current minimum payments of credit cards if you are in a 0% interest period on that card. That minimum payment skyrockets to what it was supposed to be with normal interest after the 0 interest period on the card ends. This is a common trap that the credit card companies do not tell you when you get a new credit card, as the interest is calculated into what you need to pay for the minimum interest, and this gives people a false sense of what they can afford, leading to more spending and more debt the credit card companies can benefit from. Check your real APR interest rate on the card statement, and use a website calculator (there are plenty of them online) for minimum payments by entering in your APR and what your balance really is, and incorporate that into your finances.

Touch grass, explore, and go to publicly funded areas (plan cheaper days off)
You pay taxes, so you should take advantage of the places your society provides you.
Go touch grass and go for a walk at the park. Like reading? Go to the library to read. Want to go somewhere new? See if there are any county parks that have trails you can hike up and relax in nature. Got nothing to do? Go for a walk and get some minor exercise, its healthy for your mind and body. Maybe take a few pictures for a collage or for memories sake, as you never know when shit hits the fan and you need to move. Hell, you have apps for trails you can use to find new places and even Pokemon Go is still around helping people to find places. The point is, its an excuse to get out of the house for cheap and maybe picking up a new hobby or meet new people by exploring your town / state for cheap daytrips.

Its still going to cost money to get some of these places and I am not saying to do this every day off, but you are paying for most of these places to exist, and the roads to get to them, so you might as well get your moneys worth and use them while you are young and in good health.

Plan for inflation

Spoiler: Simplified explanation of inflation

Think about money as a silo of grain, with the grain being the value of your money and the amount of grain in your silo being the tradable bit of your money. You need more grain in that silo over time because cracks in the silo keep increasing little by little over time(inflation of money), and you need to put a bit more each year into the silo to have the same trading power, because of the cracks. The problem doesn't go away until the farmer fixes part of the leaky silo (deflate the currency) so you have more grain being useful and not spoiled by leaking out of the cracks of your silo. Your money (silo) is going to provide you less over time until the government deflates the currency, which isn't going to happen because they are a lazy farmer, and for other reasons that are more complex (and off topic) for this simplified analogy.

Your money is going to be a % less useful when spending money each year, and it will not get better. A financial plan needs to incorporate that, and offset the some of the losses by increases in wages, investing, or a High yield savings account. At the very least, remember to adjust your financial plan each year as things get slightly more expensive, and remember that minimum wage (and your pay increase each year, if you have one) does not keep up with inflation, so keep that in mind when looking for a new job.

 

[Attempt Turd]

I have always been good with saving money since I used to suck at bringing it in and grew up poor. Good advice upthread!

I have one tip which I haven't implemented for myself yet. When calculating if a purchase of an expensive tool or toy is worth it I used to calculate net (after taxes) income per hour and think about how many work hours it would take to purchase it. That thing I could make or restore in 10 hours only costs 4 hours working at my job so just buy it.

Belatedly I have realized that the proper net income per income calculation would be whatever is left over after expenses and living costs divided by work hours per month. I am afraid to do this since I am a frugal bastard and will probably not be able to buy anything I want ever again.

The other tip is thinking about depreceation and turn every purchase into a monthly cost. My oven thermometer (10$) recently broke and I started looking at these new cordless probe ones which go for about 50-150. That would solve the problem of the probe cables breaking about every three years from use. However the internal battery in the cordless ones will probably die in less than two years from recharge cycling. Do I want to spend 2-4 bucks per month
on oven thermometer? No that is insane. Wait to buy until battery or supercap technology is better.

On the flip side I might buy a professional version of something for 3+ times the cost of a consumer version since it will keep working for longer, can be repaired and has much cheaper consumables.

 

[Frostnipped Todger]

Don't "keeping up with the Joneses" (live within or under your means)


Have a savings buffer


Don't buy junk you do not need (Impulse Buying is BAD)


Avoid Klarna and other pay later offers if you can help it


Touch grass, explore, and go to publicly funded areas (plan cheaper days off)

Some excellent advice here. I'd add (as someone who fucked up and ended up bankrupt many years ago) a couple of things I've learned.

1. The majority of people are retarded. Do you really want to keep up with them? If you're getting judged by people because you don't have the latest "whatever", they're not your friends anyway.

2. This is really hard when you're starting out. The best method I found was to have a separate bank account that you can't access with your card. Set up an automatic transfer on payday, and try to pretend that account doesn't exist.
Also, if you quit an activity (smoking, buying lunch every day, etc) start transferring that money every payday as well. My mother-in-law quit smoking, and two years later she had enough to fly to the USA for a holiday.
If you're a drinker/partier, one method I've used is to take out the amount of cash that you can afford to spend and leave your card at home. When you run out, go home.

3. This is often tricky because buying new things is a palliative when you're poor. I try to live by the "buy once, cry once" philosophy (waiting to buy a better quality product, instead of buying something that needs to be replaced frequently). At least look for second hand alternatives if you really want something and don't want to wait.

4. Remember the words of Admiral Ackbar.

5. Excellent advice. Unless you live in the ghetto, a trip to the park is always a good idea. Instead of going out to lunch on the weekend, my wife and I often make lunch and head to the lake. If you don't act like retards, sharing a bottle of wine or having a couple of beers won't draw the attention of the law.
Just take your trash home, and don't blast mumble rap, people are trying to relax.

 

[ShootyPee]

I would like an opinion on something I feel pt deadset on (unless I am infact wrong) but shouldn't people use strategic debt and investments to make up for the amount of spending power they lose on inflation? I feel very debt pilled however I believe debt should be portioned like calories otherwise ya drown......

 

[FlappyBat]

I would like an opinion on something I feel pt deadset on (unless I am infact wrong) but shouldn't people use strategic debt and investments to make up for the amount of spending power they lose on inflation? I feel very debt pilled however I believe debt should be portioned like calories otherwise ya drown......

Probably not the thread for this. There's a dedicated stocks thread in the Bidness forum.

Your intuition isn't so much wrong, just people are much more likely to go wrong when using it. There is academic research indicating the conclusion you came to. That the young especially should invest with leverage (borrow to invest) and that even doing so results in a "safer" investment strategy.

Spoiler: Life-cycle investing and leverage: Buying stock on margin can reduce retirement risk

By employing leverage to gain more exposure to stocks when young, individuals can achieve better diversification across time. Using stock data going back to 1871, we show that buying stock on margin when young combined with more conservative investments when older stochastically dominates standard investment strategies? both traditional life-cycle investments and 100%-stock investments. The expected retirement wealth is 90% higher compared to life-cycle funds and 19% higher compared to 100% stock investments. The expected gain would allow workers to retire almost six years earlier or extend their standard of living during retirement by 27 years.

Spoiler: BEYOND THE STATUS QUO: A CRITICAL ASSESSMENT OF LIFECYCLE INVESTMENT ADVICE

At the medium spread, the couple optimally borrows 55% of their wealth. Rather than levering up a balanced portfolio, as advocated by Asness (1996), the couple continues to choose an all-equity portfolio with 34% in domestic stocks and 66% in international stocks. These results show that households who pay realistic margin rates optimally choose all-equity strategies.

Many people do invest with leverage from an academic standpoint when they do things like invest into their 401k while they have a mortgage. From an economics standpoint, any investing while you have debt is investing with leverage. But in this common case, people are forced to hold a relatively safe asset in proportion to their debt (until another '08 happens).

The best reason not to do it is the exact moment it's most tempting to invest with leverage is almost certainly also the exact worst moment to do so. And the people who in academic theory have the potential to benefit the most (the young and the poor) are also the same exact people completely unprepared to execute the strategy.

 

[Slap47]

Rotisserie chicken already cooked at the store, frozen veggies, and a bag of potatoes is cheap as shit and trivial to make into 4 or more nutritious meals with just a microwave. Grab a stick of butter for the veggies, sour cream for the potatoes, and your favorite bottle of BBQ sauce for the chicken and you are eating better than 75% of the country.

Honestly, people talk about saving money on food by eating staples and making bulk, but you really do not need to do that to eat affordably.

Everybody I know buys a bunch of food and lets half of it rot or sit unused for 10 years before they throw it away. Avoid doing this and you can feast on different stuff everyday. Americans only spend like 10% of their money on food on average so this is an area where you can treat yourself if you're not an idiot.

You don't even need to do food planning. Just know what you like and commit to using what you have.

 

[ChaosReignsOnSomeSaturday]

I finally landed a job where I make enough I can actually use a budget to start paying off my debts. I should be in the clear in a little under 2 years. I think with saving you need to give yourself an incentive along side the obvious "it's the responsible thing to do."
You know what is a good hobby that also is investing? Buying silver coins and precious metal related. Genuinely I feel excited when I manage to actually find a coin with a design I like and get it in the mail.
I also budget out for individual long term things as well as an emergency fund and regular IRA contributions.
I meal prep on Sunday to eat lunch at my desk during the work week, and I buy one large thing to eat on over the weekend with part of the money I set aside for food/groceries like a pizza or something similar.
Currently my only major budget issue is that I have to redo my budget every week based on the paystub I get. I have different expenses that rear up outside of essentials that I've got to pay infrequently in different amounts so it's hard to have a set in stone budget. Essentially I just make sure each check to budget out everything I need to pay, invest, buy, or save and the remainder I pay towards my debt I owe. I'm less stressed about money now which is nice.