Changing the way you think

iVillage Member
Registered: 12-28-2005
Changing the way you think
2
Thu, 01-05-2006 - 2:57pm

(this is kinda free-flowing through my mind, but going to try to get some cohesive thoughts down!)

Part of the way we got into debt is because we were thinking like consumers. For instance, credit cards CAN be a useful tool (even though I think they are EVIL!). If you use them smartly and with great discipline you can use them to build up your credit score, increasing your buying power in large investments, and decreasing fees and interest you'll pay on almost anything for years. But did we use them like that?? NO!! Why??? Well, no one TAUGHT me (and I hope I can teach my children to do better!!), and the CC companies and society in general taught me that CCs are so I can SPEND SPEND SPEND! So I never have to run out of gas! So I don't have to wait to buy that washer! So I can go out to eat!

Although our debt right now is not due to CCs, we did do that in the past. Now no one will let us have one :0)! Actually, other than mortgage and car, we have almost no debt that is intrest accruing. But how we used CCs shows how we THINK like CONSUMERS.

I have to do some reading to find it(although I love reading, I HATE reading stuff like this!), I know there is some term to describe thinking like a consumer instead of as an investor in your personal finances. Changing your thinking like this is kinda like dieting. Not the diet that you're on for a few weeks/months in order to hit a target weight (ha! like I'd know anything about THAT!), but the kind where you change your eating habits long term.

Snowflaking... that money that you're all using for snowflaking, for me, that's the money that's left after bills that I use to rent or go to movies (not very often) or for fast food (once a monthish), and my grocery money. I keep forgetting to figure groceries in when doing my bills. And savings? Savings? I'm trying right now to figure out...We've got about $125 "left over" this pay period. Even though I'm calling it "left over", we are behind on every bill by a month-have been for awhile. So the first of the year coincided with this "extra" money and we said "hey! let's start that savings account NOW!". BUT... I've been visiting this board and trying to adjust my mindset on finances, and it occurred to me that I can add that money to my car payment.

At least, I think that's what I should do with it!

iVillage Member
Registered: 07-11-2001
Thu, 01-05-2006 - 4:52pm
Take a read of the debt articles I posted today. They may have some helpful tips.
Avatar for endomagazine
iVillage Member
Registered: 11-09-2004
Fri, 01-06-2006 - 12:28pm

Hello,

Your comments about thinking like a consumer reminded me of my mindset a few years ago. I've read several financial books, including Suzy Orman's and a number of others. The one that really brought the "saving" mentality home to me was "Automatic Millionaire". I'm not so interested in becoming a millionaire, but the main point of the book is showing you how to pay yourself *first*, not with the *leftovers*.

For instance:

A) I want to take a trip to Italy this year. I get paid on a regular schedule, so I set up a savings account that will automatically deduct a small amount on payday.

B) My mortgage payment is divided in half and paid automatically from my bank account on payday. I'm never late with the payment and my paycheck is not totally *gone* at the beginning of the month from that large payment. If you receive a paycheck on a predictable schedule, you may want to investigate bi-weekly payment options. They can be adjusted to whatever schedule you want.

C) At work, I've invested 6% of my income in a 401K. It comes out of my paycheck before I get it, so I don't miss the money as much.

Basically, if you set up an automatic system, you make the decision *once* and then leave it alone until you want to *increase* the amount you're putting away / paying off debt. I know that if I make my minimum payment for one credit card (0% APR), the payment will reduce about $3 or $4 per month.

I've already set up an online payment to send $3 in February to a higher APR debt, then $6 the next month, then $9 the next month, etc. I'm automating the snowballing. =) I'll still send a little extra if we have extra at the end of the month, but with the automatic stuff, I don't have to think about it.. I just have to leave it alone. =)

Sincerely.
Lindsey Schocke

Got Dot? Why Not? It Pays!
http://www.website.ws/runsamok/show

Sincerely,
Lindsey Schocke

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