A serious off-topic question for ya'll

[rlhubley]

I have a $$ question I would like to ask of my fellow drummers. You see, I have a day job. It's nothing glorius, but pays a decent wage. As I left for lunch today I stopped by my bank to deposit the paycheck, and get back my usual $50 in cash. The teller informed me that I couldn't have the $50 because my account was negative, ya know, in the red. BY $300!!!!

 

My question is this:

 

Are any of you able to deal with money, and do it well? How often are you negative? How do you track your dough?

 

It seems that I live in the red. And beleive me, I don't go buying all kinds of expenses. I just bought Quicken, so that should help some. AAAAARRRRGGGGGHHHHH!!! This is so annoying, I just wanted to find out if I'm the only one.

[DrummerCafe]

Robert,

 

We had a discussion, months ago, that covered a good portion of what you are talking about. I'll do a search and see if I can find it or not. I don't know what the thread was called though.

 

I feel like I have a very good handle on the financial thing, but it didn't come easy to me. Let me see if I can find the thread first; if not, then I'll make my attempt to explain my opinion and knowledge on the subject.

 

For those who may remember, the thread in question had me spilling my guts about my finances and how I handle them. Many of you proceeded to tease me, quite intensely if I remember correctly! Anyway, if you remember the thread, let's help our friend here and find it!

[DrummerCafe]

Well, I looked for the thread, and I can't find it. I guess I was wrong. We did touch on the topic a little in some other threads that I found.

 

Originally posted by rlhubley:

My question is this:

 

Are any of you able to deal with money, and do it well? How often are you negative? How do you track your dough?

 

 

To be blunt: IF I DON'T HAVE THE CASH ... I DON'T BUY IT!!!

 

As simple as this may sound, I realize it takes a lot of discipline to fully achieve financial freedom. I do live by this rule however. I pay cash for everything. When I write a check or use the credit card, I know that I have the cash to back it up and/or immediately pay off the debit. I don't allow any balances to remain on the credit card; they are paid off each month ... period.

 

I get receipts for EVERYTHING!!! When I buy a Pepsi, I get a receipt; whether it's a write off or not. I get a lot of strange looks http://baeproductions.net/images/emoticons/shakehead.gif from people when I want a receipt for a purchase that only totals $1.29. I track it all and set-up budgets based on my income and on need. I use Quicken to entire in all my receipts. It's time consuming, but it works well for me. The credit card is great because I get a statement each month that I can compare to my records in Quicken. Quicken also has a budget feature so you can plan out your month.

 

So, here's my advise:

 

1. Only use CASH. If you must use some other form of payment, make sure that you plan to cover it immediately with CASH.

 

2. Create a budget. Be sure to include ALL living expenses, as well as your "fun" money ... if there is any left over. When creating your budget, use your month pay check to balance out your spending. The only way you can get in the red is if you spend more than your bring in, right? So the budget will make you aware, on paper, where you stand and what you can afford. It's still up to you to adhere to it.

 

3. Get receipts for everything you purchase. Entire them into your accounting program every few days so you can see where you are at. If you have a budget of $50.00 a month for Dining Out ... you DO NOT buy ANY FOOD, except at the grocery store, once you reach your limit of $50.00.

 

I have a lot more I would like to share, and will share, but I have to get going to my gig. More later!

[sidereal]

Man, I suck at it. I can't even pay my bills. I have money, but because I can't pay my bills I get these marks on my credit history. it's a real drag. I feel like a loser, but for some reason it's just not in my blood. Getting organized financially is always my New Years Resolution. It's something I always struggle with.

 

But as Bart said, I've aleviated some of the difficulty by never buying anything on credit. Cash, checks or debit cards is the only way for me now. The mastercard is a backup just in case I need it for an emergency.

 

My advice (that I can't follow myself): PAY YOUR BILLS and keep a schedule.

[felix stein]

I come by making dough naturally I guess.

 

But I worked my ass off to get there and still am.

 

Problem is, money isn't everything- one gets these golden handcuffs on them and gets enslaved by material goods and the trap of making more money.

 

It's very simple...spend less than you make. I balance my check book at least 2x a week.

 

Get married to a rich babe...that helps too.

[rlhubley]

Well, some sort-of good news for me. It turns out that the reason why I was overdrawn actually was NOT my fault. In mid-November i paid a pet deposit for our new dog. OUr apt mgmt was super-nice, they allowed us to pay the deposit in 3 payments, stretched out over 3 months. They even suggested waiting until 12/1 for the first pymt, as long as I wrote and post-dated all three checks that day. GREAT, no problem. Well, on 11/30, the first pymt came through my bank. I was not aware, nor was I expecting this. SO, i spent $$ according to what I thought was in the bank.

But, I'm $300 in the hole. Here's how, $176 check processed which brought my acount to about $20. I expected there to be $200, and I spent close to that over the weekend, knowing I would be receiving my paycheck. Say $150 in withdrawls, that was 5 items with 5 $30 overdraft charges, which is another $150, and there you go.

Well, basically I am probably going to just get screwed out of that $150 all together. But at least I know that i was closer to calling myself finacially responsible.

[DrummerCafe]

Originally posted by felix stein:

It's very simple...spend less than you make. I balance my check book at least 2x a week.

 

 

This is DEFINITELY one of the keys to staying out of the RED!!!

 

 

I want to tell you my background and a few success stories; I'll try to keep it brief.

 

First of all, I grew poor and was raised by my mom; my dad split when I was ten years old. We had little or no money, but my mom worked her butt off to provide for us; putting food on the table, roof over our head and clothes on our backs. I'm dad was a dead-beat and never paid child support. All of this to say ... I started out on my own with nothing.

 

Worked a vast number of jobs and paid for my own college education. Eventually started gigging more and was able to support myself while I was still in school. Went on to graduate school, again paying my own way because I could never qualify for financial aid. I believe that I only borrowed about $5k with a student loan for my undergraduate degree. I was a paid teaching assistant during my graduate work. That plus gigs kept me afloat.

 

In 1989, I moved back to Amarillo, TX of all places; playing with a wide assort of groups and bands. I wanted to open my own drum shop, but didn't want to go into debt for it. I looked into a Small Business loan, but that's another story. So I decided to get another job in addition to my gigs and private teaching. I started working as a courier for a law firm. Saving every penny I could find, I eventually had enough to pay $125 for a store front in the downtown area. At this location, I taught more private students ... but didn't live off the money from teaching. Instead, I put the money in the bank and saved it until I had enough dough to purchase a gross of drumsticks from ProMark. The money I made off the sales went back into the shop. A month later, I had enough money to open an account with Remo and purchased hundreds of drumheads. My business started to take off, just by word of mouth; so much so that I was able to quit my courier job and run my shop (plus gig and teach).

 

Business continued to grow (remember, I never borrowed a dime and started with nothing), so I rented out a duplex that had been gutted and converted into a business office on a major street in town. I lived in one side of the building; the drum shop was in the other. About a year later, I moved my shop to a dying mall, but I was right next door to Service Merchandise and the rent was cheap.

 

I closed my shop in the Fall of 1992 to go on tour. I had over $30k in inventory which I liquidated.

 

The picture that I am trying to paint here is a success story ... not bragging rights. Yes, I worked my butt off, but it was the grace of God that made it all happen. Taking an average joe like myself, with no money in my pocket, and creating a thriving, successful business. If I can do this, anyone can do this ... but it does take hard work, sacrifice and discipline.

 

Today, I'm playing fulltime as a drummer & percussionist. I have no debt except for my house payment. I pay cash for everything or I don't get it. If I want it, I save for it and try to wait patiently. Don't get me wrong, I experienced debt. I had several thousand dollars of credit card debt from moving around the US too much, and from trying to survive as a musician. I've had to work VERY hard to get out of debt and build good credit.

 

All the gear you see listed on my website: I paid cash for. I just bought a Chevy Tahoe this Summer: I paid cash for it. When I married my wife five years ago, she did not have a job and was working part-time by the time we bought our house. Now we both work from home, are debt free and have a beautiful son.

 

The key is exactly what Felix said: LIVE BELOW YOUR MEANS. Spend less than you make.

 

When I make more money, I don't immediately increase my spending. I keep my same budget for a long, long time until it's obvious that I have moved into a high income bracket. Even then, I only loosen my belt a little bit. I save, save, save, save, save, save as much as I possibly can. Then when I want or need something, I can get it.

 

I feel like I live a very modest life-style. I rarely dine out, blow money, etc. When I buy something, I like to have the best money can buy. If I can't get what I want, I typically will not buy something cheaper, but rather ... I save until I have the money for what I want or need.

 

You can do this too! You'd be surprised just how quickly you can remove debt when you put your mind to it.

 

I could go on and on about all of this. I guess it's obvious that I am passionate about it. It's an incredible feeling to wake up in the morning and not worry about if you can pay your bills.

 

Oh, I've got to add one more thing. If you slip, and buy something that puts you in debt ... take it back or sell it! If you have something right now that you are in debt for ... sell it NOW! Get rid of it. If it's a fancy car, sell it and take the money and buy a car that you can pay cash for. This is the ONLY way the system will work. You've got to remove debt now and only pay cash. I drove $500 cars all my life; drove them into the ground. Eventually I was able to buy nice, used vehicles that met my needs. I currently own a Chevy Astro (cargo van) and my Tahoe ... we gave our Honda Accord to some friends in need. All of these vehicles were purchased used, several years old, but look and run like a new one.

 

Okay ...... I better stop. This post is so long, no one will read it anyway.

 

I'd love to share more if you have questions.

 

Peace.

[rlhubley]

Bart,

This is GREAT stuff. I really appreciate it, and DID read every word. It is inspiring, and I plan to start living more frugally.

 

My situation is a bit different. I grew up with money. My family wasn't rich, but we lived in a small town and my father made good money. He is a doctor and has a nice-size practice. He was able to comfortably support 5 kids in a way that I'll never be able to do. I am very lucky in this sense, and am very aware of my good fortune. Because of this, my parents were able to provide me with an education and a vehicle. Luckily, I don't have to pay anything for my truck, so I plan on using it until it either becomes completely inpractical, or dies, which should be years from now. it is very difficult to try to get accustomed to living on a substantially lower income.

The thing is, I can't complain. My girlfriend and I live together in a nice apartment, have a NICE combined income. It's not like $100K, but is big enough for us to live comfortably.

As for debt, she has high student loans($400/month, should we consolidate or just pay off?), a car note, credit card debt for both of us, then just the usual bills. I can't really go sell any of the items we are in debt for because there are only 2 of them, the car, and the computer.

 

I guess I do know what to do, I just have not developed the discipline. I am going to really take your advice to heart Bart. You made some great points. I have only been using cash for some time now(well, VisaCheck). I am working on paying old credit card debt, and occasionally use one credit card that has good standing, but pay it off quickly.

 

I would definitly appreciate any more advice you have, or any more success stories. So, any advice on solving laziness?

[Passeist]

Credit card interest rates are obscene. If you aren't paying your credit card bill the moment it comes in, get rid of the card. It's a crazy way to borrow money.

If you're not paying right away just out of sloppiness, either get over it or get rid of the card. Lock it up in a box and save it for a real emergency.

Credit cards are the crack cocaine of the financial industry.