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Personal finances: The thread

Yakamaru

The hecking hecker
Knowing how to handle money is an important aspect to having financial freedom and economical room to maneuver. Long-term planning in particular plays an important if not a vital role in one's financial freedom and well-being. This opening post to this topic won't be excruciatingly long and won't be going into super details, but more meant as an introduction to the topic itself to hopefully start a conversation surrounding this subject.

This thread is for the discussion surrounding personal economy and private finances as well as various ideas and perspectives on how to deal with budgeting, debt, etc. Keep in mind the forum's no politics rules, be civil.

First pointer: Avoid debt if possible
"The most important thing to do if you find yourself in a hole is to stop digging." - Warren Buffett

This one shouldn't be much of a surprise for those of us who have had to deal with debts looming over our heads for extended periods and know how much pain it can cause in the long-term, not to mention how much potential it have in restraining people. Taking up a loan sure looks good in the short-term, but in the long-term you are going to hurt the more debt you have and accrue. You will have less economical maneuvering space, and can at some point end up with no maneuvering space at all, having tied your own hands behind your back as a result. Debt is a downwards spiral that often leads to financial ruin, so you must be extra cautious about taking on any debt.

Debt will have to be paid back at some point. Question is, are you prepared to pay it back when you need to?

Second pointer: Think and plan long-term
"Financial planning and discipline is key to one's financial freedom." - Kishorkumar Balpalli
"Budgeting has only one rule: Do not go over budget." - Leslie Tayne

How much are you spending on luxuries?
Which luxuries can you reduce spending on or possibly drop entirely?
Can you reduce the price of your phone plan?
How much can you set as a goal to save up every month?
Buy things on sale?
Do you really need that new phone?
Are you aware of how you are spending, and on what?
Spontaneous/random spending?

These are some(among hundreds) of the questions one should ask oneself if you intend to being in control of your own finances and personal economy. Knowing how much you spend and where you spend it and if you even should spend it is important for financial well-being. Knowing how to plan ahead is important, just as being aware of your own habits, both good and bad alike.

So, how do you organize your personal economy/finances? Do you have a strict budget? Feel free to go into as much or as little detail as possible.
 

TyraWadman

The Silent Observer
I calculate my rent, bills and other necessities and subtract it from my income. I never spend anything extra until I've secured it. I have a phone for the bare minimum talk and text and no car. So it's just phone bill and rent, really.

Other things I live by:
No credit cards:
If you can't afford it now, you can't afford it later. You will end up paying back MORE than what it initially cost. If someone offers you a credit card at a dentist, they're already overcharging you to pressure you into getting it, because THEY ALSO get a commission from every person that signs up from it. Fuck those people. That includes places like Wal-Mart and any other grocery store pandering one. They're not their to help you, it's just so they get extra cash. :mad:

Public Transit:
Walking sucks ass sometimes and the bus schedules are even more ass, but you're typically paying $100 or less a month, whereas owning a car would cost fuel, insurance and regular maintenance. The only upside to keeping one is that it MAY increase your job opportunities, depending where you live. Whether or not the paying wage is enough to continue afford it, is the next problem.

Luxury Spending vs Necessities:
If you are just learning to budget, or need to start saving pennies, review your bank history and what you bought that was luxury vs necessity. Guaranteed, most people spend WAY MORE money than they need on collectables and takeout food. Buying food in bulk and portioning properly is always cheaper and healthier. Also be mindful of odd habits like shopping/eating when you're bored.

If you are struggling and trying to get by:
Buy the food based on quantity and quality. I'm not saying buy $5 produce, I'm saying avoid foods that have FILLER. Most prepackaged meats, bread and even junkfood will have it. There's nothing worse than eating and still feeling hungry afterwards. Buy what you can get the most of like Pasta, rice, canned veggies. Always keep up on sales! Check for stores that put their stuff at %50 off when they don't sell. Make multiple trips a week if you have to. Pick up every coin you see on the ground. Look for local YMCA's or somewhere they allow free showers and of course homeless shelters/income assistance locations. Library's have free computer use. NEVER FEEL ASHAMED OR AFRAID TO ASK FOR HELP. NOT EVERYONE MIGHT WANT TO HELP YOU BUT SOMEONE MIGHT BE ABLE TO POINT YOU IN THE RIGHT DIRECTION. (this is also equally useful if you just wanna save up without becoming a total cheapskate)
 
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Firuthi Dragovic

Gamer Dragon, former speedrunner
I'll get to most of this later, but right now what I'll say for sure is this:

I don't have a whole lot of bills, trying to change my worse habits is simply not something I can pull off at this time, mine is an area where having my own vehicle is mandatory, and I prefer to pay bills immediately rather than wait even a day. And I'm one of probably a tiny handful of people for whom buying food in bulk is actually a really, REALLY bad idea.

And I'm in a position where squirreling away money in multiple accounts for an emergency fund is almost mandatory.

AND I may very well be in one of the few places where buying is cheaper than renting for the sake of monthly payments - I'll have to check all the insurances/utilities/taxes/etc., but I definitely did plan on moving in the next couple years and whatever location I pick I plan to stay a while.
 

Shane McNair

Ace Pilot
I plan out a budget for each month and stick to it. First I estimate what my paychecks are going to be each month and add those together, then I factor in constants like rent, internet, insurance, utilities, etc. Then I plan out things like fuel, food, clothing, fun money/things I want, and set a spending limit for each one. I also make sure that I have at least $5,000 in an emergency fund (I also budget out $50 to cumulatively add to that), along with at least $10,000 in monthly living expenses should I ever be unfortunate enough to find myself out of work for an extended period of time. Whatever unspent money I have left over at the end of the month goes into my savings. I also plan for major anticipated expenses. For example, I'll need to get a new set of tires for my truck soon. I'm going to use my tax refund and part of a stimulus check for that. I will also need to renew my registration on it at the end of May (about $190), so I'm going to plan for that too.

Now, I'll admit that I'm not always as restrained about my spending as I should be, but I'm generally pretty good about saving. I have my dad to thank for inculcating in me good money sense and financial habits as a kid. I don't eat out very much, and I like to do simple things like turning lights off when I don't need them to save money on my energy bill. I'm also not very materialistic either, and don't really care much about having a lot of expensive possessions (with a few exceptions), so that also helps. I prefer to have a simple, unencumbered life and spend only what I need to live and enjoy a few lifestyle things.

Regarding your point about debt, as Dave Ramsey likes to emphasize, "the borrower is slave to the lender", and those are a few words I live by. I have no credit cards and don't want one. I've never borrowed a dime in my life and don't care to. I've never liked the idea of having that burden hanging over me and being financially beholden to someone, and especially having to pay it back with interest. That's why I've never applied for student loans or car loans or anything like that, especially after having seen how student debt has so badly affected my generation. I would rather drive a hooptie that's paid off and MINE than a brand new, $60,000 pick up truck that I'm spending an arm and a leg each month to pay off. Probably the only thing I'd ever borrow money for is a house, and that's about it.
 
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Astus

Well Known Foxxo
Things I've always tried to do and has worked out so far

1. Don't have any debt.
I always make sure if I buy something, I have the money to pay it off right away. This especially works for my credit card which I get cash back on. I basically get money back for buying things with money I already have. Sometimes this cannot be avoided, like student loans, in which case I always try to pay off more of the higher interest payments first so you aren't paying back extra.

2. Save your money
I try to save at least 75% of my money when possible. This means that after bills and everything else, I put away 75% of my money. Sometimes this will change depending if I really want something and I deserve to treat myself... But it has helped me get some savings so far.

3. Think with the end in mind
If you can get an IRA/401k or something similar, start putting money in ASAP (or just savings account that you will never touch). It may be a long ways away, but you are going to want to retire. You need money for that, it's expensive to live. Make sure you have enough being put away to ensure you can actually retire.

4. If possible/you have experience invest some of your money
Bank interests rates are terrible. 0.02% at most banks per year is all you get. I have made myself a little more savvy to stock market ideas and I'm making 8% or so off of my money a year. Be prepared to lose this money however; make sure you always have something to back you up incase you lose everything. I put around 5-10% of my money into stocks and let it work for me.

5. When your passive income pays your overhead, you're rich
If your investments pay for your cost of living, you're doing the right thing. It could be from the stock market, or other forms of passive income like owning rental property. You usually have to work to get this sort of thing... But this is essentially how rich people stay rich and get richer. Always be careful with investing however... There's a reason it has a higher payout.. and that's because it's more risky. Like owning a business vs being an employee; you have more to lose as a business owner than and employee, which is why employees are often paid much less than a company will make, because they have job security

That's all I got for now, hope it possibly can help someone...

And please note, I am not giving any particular person financial advice or advice on investing; these are just personal guidelines I follow. Do not take anything I say as practical advice on stock market, investing, or any other form of investment that will lose you money or has risk. It's all theories I have developed for myself
 

Kumali

Lupine-American
"A man is rich in proportion to the number of things which he can afford to let alone." - Henry David Thoreau
 

Yakamaru

The hecking hecker
Thanks for the replies so far, I appreciate it.

As have been mentioned several times, don't go into debt unless you can avoid it. I've been 100% debt-free since Summer last year and it's doing wonders for my future/long-term planning. It's made it very easy for me to budget every month. When I get my vacation pay and tax returns this Summer I will be sitting on roughly $35,000-36,000 saved up since May 2019. This of course have been converted from Norwegian Kroner to make it a bit easier to understand, though do keep in mind that we earn decently more over here. I earn about $28.5 an hour roughly converted, so I earn quite decently with my current job.

I make sure all expenditures are taken care of such as rent and bills, something of which isn't exactly much of an issue with the wages I have(and there's been a fuckton of overtime these past 3 months as well, something of which adds quite a lot to my earnings). I always put aside at bare minimum $1200-1300 a month that I shove into either a savings account or use to invest into things like cryptocurrency, stocks, shares, etc. So far I've made quite the profit off of it all, and there will be a lot more profit to be made in the future. Apart from the mandatory expenditures and saving plans, I leave a lot of room for various spontaneous and/or necessary expenditures such as food, driving lessons, potential doctor's appointments, monthly bus and/or train , +++.

I'm quite pleased with these plans, though should probably reduce my random expenditures such as buying too much ice cream, candy, soda, etc.
 

Netanye Dakabi

people call me queen
Banned
I'm living in a farm house cellar with the entire population of a former tourism-based town.

it's fair to say i've got no money.

if one of us gets a bad case of flu we're fucked.
 

rekcerW

Well-Known Member
i had some pretty good savings, but then covid kinda threw a wrench into everything. was out of work for ~4 months. didn't default on my mortgage which is pretty decent, though.

gradually working my way back out of the hole. i make pretty decent money, so shouldn't take long if i just don't spend like an idiot.
 

Glossolalia

just happy to be here
I'm not financially savvy, but I'm an instinctually frugal person. I buy secondhand whenever I can, I keep clothes until they wear out, the main staples of my diet are beans, rice, bread and frozen veggies. My main hobby, multimedia art, requires a lot of materials, but I pick them up gradually and horde them when I find a good deal. I've worked a handful of minimum wage jobs, with stretches of unemployment in between that most people would consider worryingly long. I definitely wouldn't describe myself as "good with money", spending it just doesn't come naturally to me.
 

Firuthi Dragovic

Gamer Dragon, former speedrunner
Okay, for realsies this time:

My immediate family's generally been stingy with money. I had a few nice things growing up but never "all the latest". No, not even with computers - it wasn't until I started getting my own work that I could have decent graphics cards.

As a result of that, I'm generally more substance than style when it comes to shopping in the first place and I'm VERY used to hand-me-down equipment. Thing is... only reason I'm good with money beyond that point is because I'm WAY behind on developing independence compared to the usual. I've blown through emergency funds multiple times.

The living arrangement I have specifies that my student loan payment (my main recurring bill - I think the only other bill I pay is car insurance) is effectively my rent - and that got suspended with this whole pandemic thing, so I've been hoarding money in an effort to put that requirement to rest for good. At which point, I will be focused on both retirement savings and the down payment for a house for when I finally move out. (They've been trying to push me to rent a house first - not happening in this area or the current market.)

I've actually been using this opportunity to get more of the things I want, expecting to have less chance of that when I move.

Retirement-wise, I'm probably going to find a bunch of index funds and a few stocks that are really low, throw in money once a month, check it twice a month and that's IT. I will not minmax money as I remember from the Gamestop experience that I get way too anxious if I'm watching the market all the time.

(This also means my budget is not as strict as it probably should be.)

If anyone wants to ask me anything specific about finances to guide this conversation feel free.
 

Kinare

RAWR
I was raised not allowed to have anything I wanted. My brothers and I rarely got an allowance, instead my brother would "work for an item he wanted" - which generally meant helping my dad for an hour or so and then dad would go buy him what he wanted, expense didn't matter much. The same offer was not true for me because I didn't know how to milk it properly. Because of this, I didn't learn money management early on, and it shows.

As soon as I turned 18, I got what I wanted, and then some. Little did I know then, but those actions would fuck me for the next 14 years. I barely paid anything on those debts because I barely made any money working 20-30hrs a week at $7.45/hr. The only debt I have consistently paid on is my student loan, and the only reason I didn't also let that go into default like the rest was because my dad would have gotten stuck with the bill and his credit score ruined if he didn't pay in time. Last year the credit bureaus forgot about my delinquent debts and my credit score has returned to a normie state, just in time for my move back home where I racked up another pile of debt thanks to moving expenses and... well, let's be honest, not all of that was moving expenses.

To this day my spending habits are still really garbage. It's gotten worse since I moved home because I do have extra money now, but instead of putting that money aside, I spend much of it. I had to budget hard when I was out on my own to make sure I made rent and such, which left very little spending money, so now that I have wiggle room my old awful habits are coming back up - I want, therefor I will get if the funds are there. I always find a way to justify a purchase I really, really want. Then when something major comes up that I really need money for, like before when my cat needed surgery or my own health I'd like to get checked out, I can't foot the bill.

That said, spending habits aren't my only issue. I still barely make above minimum wage and have no benefits at my job. I could probably safely put away like $50 a month, but that seems like such a small number compared to what I need for my goals, so I self-defeat and just spend it because the things I get with it makes me happy briefly. :v See, I know my spending habits are bad, but until I actually get a job I can truly live on it feels like it doesn't matter much. After a year that's only $600 I'd have sitting there. That's practically nothing. That's not even a month of rent + utilities.

Right now, I think I'm better off using extra money to put towards my debts so I can have more breathing room when I eventually can move out again, which is what I have been doing with what I don't spend. Goal is debt free in 5 years, and I'm on the right track to that or sooner, but I still need to secure a better career path to be financially stable because even being completely debt free I just don't make enough to pay the cheapest possible rent+utilities and buy my own health insurance.
 
D

Deleted member 93706

Guest
I was raised to be fiscally conservative, and I am very much that.
 

ASTA

Failed Redemption Arc
I've maintained roughly the same monthly budget since late 2019 when I began working at my current job for a paltry 9 dollars per hour. I've gained three pay raises since then, two position advancements, and learned to sell our product better, netting even more money. I now make 18.50/hr equivalent in Texas. With overtime, the four to five additional paychecks that weekly-paid workers receive every year, the small dividends that I make from my various investments, and tips from customers, I make between 35k-40k gross/year.

My budget at the moment is about 1100 dollars/month. I save between 55 and 60 percent of my income.

  • 470 dollars base rent/utilities
  • 200 dollars a month for food
  • 100 dollars for gas
  • 89 dollars for car insurance
  • 136 dollars for health insurance
  • 9 for my Crunchyroll subscription
  • 10 for my Discord nitro subscription
  • 13 for my Amazon prime subscription
  • 60 dollars for my phone bill

Fun fact: If I did not have a car, if I spent 100 dollars/month less on food, if I downgraded my phone bill from 55 dollars/month to 10 dollars/month, and if I reduced my health financing costs from 134 dollars/month to 100 dollars/month, I would be living off of 727 dollars/month (or 8,724 dollars/year). This would be 1,024 dollars more than the 7,700 dollars/year that Jacob Lund Fisker, author of the book Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence (and arguably the grandfather of the FIRE movement itself), lives off of.

Hell, if I just shaved 45 dollars off of my insurance payment, 50 dollars off of my phone bill, 100 dollars off of my monthly food bill, and 36 dollars off of my insurance bill, I'd save 2,772 dollars/year, increasing my savings rate to 65%. Ditching the car altogether pushes it to 70%.

A few reoccurring monthly additions and deductions have come into effect between 2019 and now.

Additions:

1) I became debt-free in the later half of 2020. This freed up 204 dollars/month (119 dollars/month for a bank loan repayment, 35 dollars/month for one credit card, and 50 dollars/month for another credit card).

2) Retaining a clean record driving record, increasing my credit score from the mid-500s to the mid 700s (this happened shortly after the aforementioned debts were reported as having been paid in full on my credit report), getting past age 25, and switching car insurance companies reduced my monthly car insurance premium from 119 dollars/month to a current 89, resulting in 30 dollars/month saved. I would be paying 35 to 45 dollars/month if I had a more modern vehicle that possessed more advanced safety features and that wasn't a two-door coupe.

3) Base rent went down from 515 dollars/month to 425 dollars/month when I signed a 12-month lease instead of a 6-month lease. Utility cost range (35 to 40 dollars/month) did not change. 110 dollars/month saved.

Total additions: 324 dollars/month (or 3,888 dollars/year.) If this figure were converted to represent a weekly paycheck obtained from a job, this would equate to circa 2.05 dollars/hour (or the equivalent of me taking up a part-time position at a McDonald's franchise restaurant for ten hours/week at roughly 8 dollars/hour). It would also represent a two dollar raise over the 9 dollars/hour that I was making when I first took this job and formulated this budget.

Deductions:

1) I gained health insurance coverage. 136 dollars/month.

Note: I'm currently researching ways on how to reduce this expense while simultaneously increasing the quality of the effect that this product and its related services provide. Direct primary care plans, shared healthcare plans, or HSA + high-deductible insurance package combinations (these have been possibly rendered obsolete by ACA plan) may be options.

2) Monthly fuel costs have doubled due to a job location change. Up from 50 dollars/month to a whopping 100 dollars/month.

Total deductions: 234

Net adjustments: 88 dollars/month, 1,056 dollars/year, or 0.55 dollars/hour.

Ramblings and possible questions people may have for me:

1) "How the hell are you saving almost 60 percent of your income while only making 30,000 dollars/year after-tax?"

  • I live in an area with a sensible COL.
  • I don't have any children.
  • There are no "human financial outlets" (mooching family members/money pit significant others/dating) eating at my budget.
  • I try not to spend money on things with low ROIs or low resale value. I'll happily purchase 800 dollars worth of FSKAX but my heart would skip a beat if someone told me to drop 800 dollars on a cellphone. The former would appreciate in value to about 1,070 dollars within 5 years assuming a 6 percent annual return rate. The latter becomes an outdated 100 dollar refurbished potato on Ebay within the same amount of time.
  • I don't do debt.

Car debt, student loan debt, and credit card debt are the "Three Sirens" of the average man and woman's financial world, destroying their wealth-building capacity gradually through interest accumulation and late fees. Every dollar that they pay to one or more members of this diabolical trio is another dollar that cannot go towards investments or a retirement savings account. Particularly cash-strapped and desperate Americans will find themselves turning to the various shit-tier money institutions that comprise the poverty industry for temporary financial relief, but these alternative financial services (title loan places, payday loan places, etc) often have some of the highest interest rates and late fees ever seen.

Also, I believe that money is a measure of time. Time is the single most valuable finite resource in the universe. You cannot get more of it than what you've already been allotted, there are no refunds on it, and you can have your entire time balance reduced to 0 with little or no warning (you die prematurely). Yet it is critically undervalued by the lion's share of people---so much so that many average Americans give away oodles of their time to parasitic financial institutions, useless people, and useless causes for social recognition points.

I value watching my accounts grow over buying junk and impressing random nobodies.

2) "Are you able to contribute to any retirement accounts or investment portfolios despite making so little?"

Yes. I contribute 6,000 dollars/year to a traditional IRA, 10,000 dollars to standard passive investment vehicles per year (ETFs and index funds along a 70/30 domestic/international split) and another 3,000 to 4,000 dollars to other misc investment (either crypto, more ETF and index fund shares, or just general savings).
 
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Stray Cat Terry

"테리는길냥이"
Not gonna lie, I sense this thread is one of the most helpful in terms of dealing with reality. OwO
Relating the OP's statements to my experiences, I can never agree more!

Lemme begin then!
I tend to get bonus cash from whatever sources possible. Call me fortunate or sly, whatever. Anyways, thanks to this, I can manage to spend as additional boosts for both my essentials and luxuries. ($200 prop guns, cute outfits and videogame microtransactions every couple of months won't hurt, right? OwO)
The con, however, is that I can't plan too grand on spending anything, of course.(Unless I take it slow, and I mean slow slow!) But that's okay, it's still always enough to take care of the vitals. UwU

In fact, I'm rather a minimalist compared to most people around in relevant economical regions. The key is to spend the least while gaining the most out of what I spend, and I assume my lifestyle is never compatible to most people around. In short--I'd rather save more than to work harder. Working hard for more advantages is just not my taste, it just ruins all the fun in life! ÒnÓ

What do we live for, under this uneasy society? Answers shall vary, but in my case--I live for bliss. The refreshment, the catharsis.
For example, encountering street cats and staying with them alone makes me feel being healed. And perhaps buy a few ham pieces to share? It's not a big deal on spending my money, yet I gain far more than that doing so.
And not to mention the cats(same goes for any animals) are incomparably the better beings to accompany with than most human beings I met throughout my life, even though they never speak 'Humanese'.

The 'unconventional' mental well-being method asides, the budget thing... As I stated earlier, I can never plan and act beyond what I can afford. And thanks to some people I know who had either been fooled or stepped in themselves into debts, I'm conveniently and constantly being reminded that I should keep doing how I do.

Apart from the debt thing, there's something similar--lending someone your money.
Hell, this is the last thing you're gonna do with your money besides paying debts, unless you're perfectly fine on losing what you lend them.

Firstly, who you're lending it to doesn't matter, they aren't you, and they are neither god nor softwares. You don't even know what'll happen to yourself, hence them!
I also did lend money to my friends a few times, but hey, what if my friend gets scammed, robbed, lost or whatever? Guess what, they happened.
So, the rule of thumb is, always consider the money you lend others gone, no returns. That way, you'll never suffer from other's fault. It'll be extraordinarily infuriating if it happens.

Secondly and lastly, you never know who you're dealing with. Even your family can throw you away like an old shoe (No..? it happened to me anyways), why wouldn't everyone else be so as well?
Unfortunately, we ain't psychics nor gods. We'll never know someone's true intentions. (We don't have to be wary against everyone all the time, however. As long as the interaction and things involved are within manageable range) This fact alone can involve various circumstances, but I'll get back to the money side for now.
So, since that, and again, gotta make sure you won't get disadvantageously impacted or further get your life ruined even under the worst scenario--consider the money gone, or simply never lend them money.
And again, a friend of mine provided me the perfect example what can go wrong if one lends money to a friend(who even was known to be faithful), while the initial owner of that money also needs that money in time. It went horribly wrong.

Well... guess that's all!
Save strategically, use strategically, and always keep enough margin for both your usual supplies and the plan B. That's how I manage my finance.

While that's that, I can't condifently say I'm rich, while I do donations sometimes though >p<

...But I'm never poor with my strategical mindset aiding me UwU
 
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