From: markr@mot.com (Mark Rindsberg)
Subject: Re: middle class/affording a house
Reply-To: markr@mcil.comm.mot.com
Organization: MCIL, Tel Aviv
Distribution: na
Date: Wed, 22 Jul 1992 12:17:39 GMT

In article <1200@stake.DaytonOH.NCR.COM> emolinar@stake.DaytonOH.NCR.COM (Elizabeth Molinaro) writes:
>
>        What has amazed me about this conversation is that (aside from what I
>will say) only ONE person has advocated a little bit of buying/spending
>restraint in order to save to buy a house.
>        In the spirit of helping out that one true believer ; ), I would like
>to offer a couple of tips that have served me well, for all my 30 years:
>(with house, 2 cars, 2 cats, no bills.)

>        1.  Get those credit card bills down to $0.00
>                The corrolary to this:  pay off your
>                cars, etc.  Get all bills to $0.00.
>                Once you quit paying XX% interest, 
>                you'll be amazed at how much you "save"

Absolutely, NEVER carry a balance on your credit card, it is generally costing
you upwards of 17%, which is not worth it. (unless you paid medical bills with
the card, or something equally important, a new receiver and great speakers
don't count)

>        1.5 TRY to exist on a cash only basis from hereafter,
>            and use those credit cards only for purchases that
>            you can pay off in a month -- and only because you
>            want to make some interest on your cash accounts in
>            the meantime.

I actually put everything I can on a credit card and then pay the full amount
when the payment due date comes.  A corollary would be to pick a bank which
gives you the option of earning interest (however low a rate) on your balance.

>        2.  Save ANYTHING.  But make sure you save at least 
>            something every single week.  If it's $20.00 bucks
>            this week, then make it $200.00 when you have finally
>            paid off your credit cards.

Definitely.  Also, do the saving immediately upon receipt of your paycheck, not
after it's all been spent. (I have my paycheck automatically deposited and
then draw checks and automatic withdrawals against the account)

>        3.  Do not buy anything on the spur of the moment. This means
>            that you go gorcery, clothes, sundry shopping with a list,
>            every time.  No buying anything that wasn't on the list.
>
>        4.  For everything that you managed to resist, put that money
>            into a jar.  Empty that jar into a savings/money market/
>            investment fund at least once a month.

In general, don't treat money saved on something as money that can be
used for any whim of yours.  ALL money is equal and should be saved.

>        6.  And, I hate to say it, but the other guy said it right:
>            live frugally for a year or two.  Find free things to do,
>            go on cheap vacations to relatives places in the Pocanos,
>            or wherever, and make sure your families know that you
>            are in the frugal mode: you'll be amazed at the helpful ; )
>            suggestions and the extra generosity that may come your
>            way for Xmas, birthdays, etc.!  This also gets you off
>            the on-upmanship game of gift giving...
>
>                AND: entertain at home, with friends who you like and who
>                are the type to bring something (subsidizing everyone else's
>                Friday binge is not what we have in mind here.)

This is the greatest thing.  Instead of sitting with your friends in
a smoky bar with music so loud that you can't hear each other, and with
high priced drinks, do it at home and have a better time at it.

>
>        7.  Life is not too short to live frugally for a year or two, in 
>            order to accomplish large goals.  And who said frugal had
>            to be boring????  Life is always what YOU make of it: money
>            is only a part of the equation, not the whole.

You said it, money isn't nearly as important for having fun as we make it out
to be.  Some of the best things in life are free. 

Actually, I have done all the above things and saved enough to buy a house,
(at least a goodly down payment for one) but have decided that it isn't
worth buying a house now. (fate, I guess)

Mark