Comments on: Learn to Save by Taxing Yourself http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/ personal finance that makes cents Tue, 07 Oct 2008 23:08:44 +0000 http://wordpress.org/?v=2.5.1 By: How to Fight the Urge to Splurge ? Get Rich Slowly http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-84111 How to Fight the Urge to Splurge ? Get Rich Slowly Wed, 18 Apr 2007 12:00:44 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-84111 [...] Tax yourself whenever you make an impulse purchase. Take 10% of the of what you paid and put it into savings. This action alone can make you more aware of your spending habits. (J Wynia combines the self-tax with a time delay — clever.) [...] [...] Tax yourself whenever you make an impulse purchase. Take 10% of the of what you paid and put it into savings. This action alone can make you more aware of your spending habits. (J Wynia combines the self-tax with a time delay — clever.) [...]

]]> By: gotrootdude http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-36208 gotrootdude Fri, 29 Dec 2006 21:23:40 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-36208 Sorry for the spelling and gramatical errors, I was trying to type fast. Sorry for the spelling and gramatical errors, I was trying to type fast.

]]> By: gotrootdude http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-36206 gotrootdude Fri, 29 Dec 2006 21:22:42 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-36206 Saving money before investing money is not a good idea. Savings accounts are not investments, then rarely (if ever) beat the inflationary rate! The wrong place to put savings is into a bank account! Bank accounts are there for the purpose of temporarily holding and moving money between REAL investments. I live by the rule, if you have any money in your bank account - you have to much money in your bank account. I actively seek out clearance and purchase for pennies on the dollar, then resell or gift the items. Generally, I earn somewhere around 250%APR or so on my money. Knowing my return on investment, I cannot let money linger in my bank, or pocket. At my rate of interest, if you take a $2000 initial investment then over the course of five years, you'll have well over $200,000. It would require lunacy to hold onto any money. In case of emergency, I normally have around $300 a day in checks arriving at the house from rebate deals, and/or cash money from sales, and/or money waiting for the right deal in my bank account, or waiting for transfer to my prosper lending account in my money market account. The trick is knowing what is an investment vs what is a liability, and buying accordingly. Greater than 90% of my purchases are investments. Necessary disposable items are viewed as liabilities since they costs without payback and should be approached with extreme caution when purchasing, these include food, gas, paper goods, media (with the wealth of information resources available today, all media is liabilities and disposable). I have been viewing gas as a possible investment though. I may purchase a fully electric vehicle from ZAP, then sign up at freegashelp.com for the $200 payout a month plan and use that money to pay for the vehicle. Saving money before investing money is not a good idea. Savings accounts are not investments, then rarely (if ever) beat the inflationary rate! The wrong place to put savings is into a bank account! Bank accounts are there for the purpose of temporarily holding and moving money between REAL investments.

I live by the rule, if you have any money in your bank account - you have to much money in your bank account. I actively seek out clearance and purchase for pennies on the dollar, then resell or gift the items. Generally, I earn somewhere around 250%APR or so on my money. Knowing my return on investment, I cannot let money linger in my bank, or pocket.

At my rate of interest, if you take a $2000 initial investment then over the course of five years, you’ll have well over $200,000. It would require lunacy to hold onto any money.

In case of emergency, I normally have around $300 a day in checks arriving at the house from rebate deals, and/or cash money from sales, and/or money waiting for the right deal in my bank account, or waiting for transfer to my prosper lending account in my money market account.

The trick is knowing what is an investment vs what is a liability, and buying accordingly. Greater than 90% of my purchases are investments. Necessary disposable items are viewed as liabilities since they costs without payback and should be approached with extreme caution when purchasing, these include food, gas, paper goods, media (with the wealth of information resources available today, all media is liabilities and disposable).

I have been viewing gas as a possible investment though. I may purchase a fully electric vehicle from ZAP, then sign up at freegashelp.com for the $200 payout a month plan and use that money to pay for the vehicle.

]]> By: Filip http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-33747 Filip Sun, 24 Dec 2006 07:08:37 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-33747 Or if you work on a forward, outlay type budget, just add 10% to your total expenses every month. That way you'll have 10% left over at the end of the year you can round up and put away. Or if you work on a forward, outlay type budget, just add 10% to your total expenses every month. That way you’ll have 10% left over at the end of the year you can round up and put away.

]]> By: Angela http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-33029 Angela Fri, 22 Dec 2006 08:41:32 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-33029 I might try this, either on purchases over £50 (approx $80 at the moment) or on beer, which I probably consume too much of. The drawback is remembering to do it. If I do the beer thing I might need to save the money in a jar for a bit and then deposit it - I use cash in my day to day life. For large purchases, I'd probably use credit/debit card anyway so then it would just be a phone call transferring the money into savings. I might try this, either on purchases over £50 (approx $80 at the moment) or on beer, which I probably consume too much of.

The drawback is remembering to do it. If I do the beer thing I might need to save the money in a jar for a bit and then deposit it - I use cash in my day to day life. For large purchases, I’d probably use credit/debit card anyway so then it would just be a phone call transferring the money into savings.

]]> By: terry http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32997 terry Fri, 22 Dec 2006 07:23:08 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32997 I once tried paying myself first. But then I didn't have enough money to pay all of my bills (a minimum wage income doesn't go very far). After a few months, I started getting shutoff notices for the utility bills I wasn't paying. So I took all the money I had "paid myself" and used it to bring my utility bills current. Then I stopped trying to pay myself first. I once tried paying myself first. But then I didn’t have enough money to pay all of my bills (a minimum wage income doesn’t go very far). After a few months, I started getting shutoff notices for the utility bills I wasn’t paying.

So I took all the money I had “paid myself” and used it to bring my utility bills current. Then I stopped trying to pay myself first.

]]> By: Self Taxer http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32915 Self Taxer Thu, 21 Dec 2006 22:43:42 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32915 I do something similar for things I purchase that some would consider "sinful." An example is when I buy fast food. I know I shouldn't, so I tax myself by taking 50% of the cost and putting it into savings. I do something similar for things I purchase that some would consider “sinful.” An example is when I buy fast food. I know I shouldn’t, so I tax myself by taking 50% of the cost and putting it into savings.

]]> By: HOWTO: Buy Nothing » Voice Out Your View Point http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32887 HOWTO: Buy Nothing » Voice Out Your View Point Thu, 21 Dec 2006 21:17:39 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32887 [...] How to Buy Nothing [WikiHow via Get Rich Slowly] [...] [...] How to Buy Nothing [WikiHow via Get Rich Slowly] [...]

]]> By: celine http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32883 celine Thu, 21 Dec 2006 20:50:22 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32883 We bank with Bank of America, and they have a similar idea in a program called "Keep the Change" that we have loved using. Basically, it takes all of the purchases you make in a day, rounds up to the next dollar, and deposits the rounded up amount into your savings account. So, if I spend 22.40 on gas, it rounds the purchase up to 23.00 and BoA deposits that extra sixty cents into my savings account. The bank had a promotion where they matched all the money deposited into savings for three months, up to a certain amount. We got our matching funds from the bank last month, and it added up to 125.00! Just for allowing them to throw a few quarters into our savings account every day. Anyway, I'm really pleased with the program and it's added up nicely. We still do our standard deposits into savings every month, but this is a great way to save a little extra. I am pretty sure you can still sign up for it, but I'm not so sure about the promotional deal.. Either way, it's really been wonderful for us, and works along the same lines as the self-taxation idea. We bank with Bank of America, and they have a similar idea in a program called “Keep the Change” that we have loved using. Basically, it takes all of the purchases you make in a day, rounds up to the next dollar, and deposits the rounded up amount into your savings account. So, if I spend 22.40 on gas, it rounds the purchase up to 23.00 and BoA deposits that extra sixty cents into my savings account. The bank had a promotion where they matched all the money deposited into savings for three months, up to a certain amount. We got our matching funds from the bank last month, and it added up to 125.00! Just for allowing them to throw a few quarters into our savings account every day.

Anyway, I’m really pleased with the program and it’s added up nicely. We still do our standard deposits into savings every month, but this is a great way to save a little extra. I am pretty sure you can still sign up for it, but I’m not so sure about the promotional deal.. Either way, it’s really been wonderful for us, and works along the same lines as the self-taxation idea.

]]> By: Mike http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32864 Mike Thu, 21 Dec 2006 19:24:13 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32864 I would have trouble with that one. It would be tough for me to keep track of how much I was supposed to save when it was time to hit the bank. I just recently started putting all of the one dollar bills that I end up with every night into a savings jar. It may not result in all that much money, but it is a nice easy start. I would have trouble with that one. It would be tough for me to keep track of how much I was supposed to save when it was time to hit the bank. I just recently started putting all of the one dollar bills that I end up with every night into a savings jar. It may not result in all that much money, but it is a nice easy start.

]]> By: brad http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32862 brad Thu, 21 Dec 2006 18:59:28 +0000 http://www.getrichslowly.org/blog/2006/12/21/learn-to-save-by-taxing-yourself/#comment-32862 Interesting concept, but I think it would take a lot of self-discipline to enforce. I'd never be able to stick with something like this unless I made it public somehow, even if only to my significant other. External accountability works wonders. If nobody knows but you, you can break your own promises with impunity! Interesting concept, but I think it would take a lot of self-discipline to enforce. I’d never be able to stick with something like this unless I made it public somehow, even if only to my significant other. External accountability works wonders. If nobody knows but you, you can break your own promises with impunity!

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