Comments on: Daily Links: Positive Cash-Flow Edition

By: josh

josh — Thu, 17 Jan 2008 22:53:08 +0000

I like your site, but doesnt driving to the bank to deposit your paycheck seem like a huge waste of time, gas, and overall oppotunity costs? Cant you have direct deposit and kill two birds with one stone?

By: Sandy

Sandy — Thu, 17 Jan 2008 21:17:56 +0000

You bought one comic book after becoming debt-free, instead of $50 - $100 worth? That’s been my experience too, since becoming debt-free myself. When we have the money, we feel in control, and don’t want to part with it, or buy way less and enjoy it more. When we are in debt, we sometimes get a ‘what’s the use?’ kind of a feeling, like “I’ll never get out of debt”, so we spend more to relieve that pain. Almost like the anxiety drives us, but once we feel the peace of mind coming from not being in debt, then we are feeling relaxed and just not driven to make those over the top purchases. I’m only paying for utilities, taxes and groceries now - so simple, and if I get myself back into debt, I’ll lose these great feelings, so don’t want to go back there again. That’s why I can keep my spending down. And I’m just marveling, like you, how my bank account is increasing every month.

By: KC

KC — Thu, 17 Jan 2008 17:29:09 +0000

Yeah! Welcome to the world of cash-flow! It’s a nice place to live and well worth the hard work of paying off that debt to get there. In fact, the harder you work (more debt) to get there the more I think you’ll enjoy it.

Just remember keep your debt ratios low - less than 30% of income is what conservative banks recommend (by conservative I mean those who generally didn’t partake of the sub-prime mortgage lending).

I still think the best thing we ever did was buy a small house with a reasonable mortgage and stay there even when the income started going up. I’m going to have kids (or a kid) and we’ll need a bigger place eventually, but for now we’re very content in a home that only costs us 15% of our household income. It gives us positive cash-flow!

By: Laura

Laura — Thu, 17 Jan 2008 16:41:37 +0000

Congrats on getting rid of the debt ball and chain. I’m free from the credit cards, now working on the car and student loans soon.

By: dickey45

dickey45 — Thu, 17 Jan 2008 16:30:57 +0000

I read the link on how to motivate your child to save. Really, it was an article on how to motivate your child to do chores. If you think about it - using money as a reinforces is like bribing: If you do this, I will give you this. But then, aren’t we all bribed (paycheck).

There is a difference between bribing and positive reinforcement. Positive reinforcement (PR) is done under the condition that you give something to increase a behavior and it really does increase that behavior. It is more effective than bribes. So I use both - bribes and PR. Every week my son brings home his homework turn in sheet with scores. I give him $3 for giving me the sheet and $.50 for each item turned in. That is a bribe but that is how he pays for his mangas and games. Naturally 1/2 of all that he makes goes to a savings account which he now has to maintain himself (11 years old).

Now my son has autism. When he was 7, he was becoming very defiant. So I worked with a token board. Every time he did what I said without complaining, I gave him a penny to velcro onto a board. With 10 pennies, he got x. Within 3 days his attitude changed. And we faded the token board.

I then had him do more chores around the house. There were 4 chores. If he did them everyday, he got $7 a week. With the chores under his belt (taught) and without complaints, we faded weekly allowance for the homework system now in place.

It’s all a matter of the principles of behavior analysis. Pretty old stuff thanks to Watson, Skinner, etc.

By: dickey45

dickey45 — Thu, 17 Jan 2008 16:19:49 +0000

Woops that was $11k in the bank, not $11. Geez.

By: dickey45

dickey45 — Thu, 17 Jan 2008 16:16:20 +0000

In September 2007, my boyfriend and I decided to sell his house - instead of moving to it and remodeling mine. On Nov 3, we put up the for sale sign - after 4 years of doing a complete remodel all ourselves. On Dec 12 we got a check. On Dec 13, we paid off my mortgage. On Dec 14 I gave notice at my work. On Jan 4 I left my workplace. On Jan 12 we got married. And today we have a 30k CD and about $11 in the bank. No payments even though we have 3 cars (one of which will be used to remodel the current house which is questionable in warmth and foundation). The new car is 11 years old, the other 19, and the big truck is the mid 80s. We can’t wait to get rid of the big truck and 16 foot trailer after the remodel (which will take 2-4 years).

Not having payments is weird. We now have to save for property tax and car insurances. Apparently we can live on $1200 a month which includes food and entertainment. The rest will go to his retirement fund.

I have no idea of how people make it on minimum wage/less than living wage.

It was worth it. Combining finances has allowed this to happen. I am finishing up a teaching certificate and switching careers and I hope my husband (that sounds weird) can go back to school, too.

By: Todd

Todd — Thu, 17 Jan 2008 14:43:38 +0000

Congrats JD on now being debt free. Feels great doesn’t it! I’m right behind you and looking forward to that day as well. Also, thanks for the link, I appreciate it.

By: Sam

Sam — Thu, 17 Jan 2008 14:33:54 +0000

I’m right there with you. We just wrapped up paying off our unsecured debt and now we are working on saving and investing $50,000 in 2008 (plus maxing out our 401ks). I’m planning to use the same habits to grow our money as I did to pay off debt.
(1) My husband and I are on the same page re: our 2008 goals.
(2) We have set up a savings/investing snow ball. We have a handy chart to keep track off our savings. We also have a weekly schedule for throwing money at our savings goals.
(3) We will be using a spending plan and working on creating a budget to help us live under our means.
(4) We will continue not using credit cards and will instead use cash/debit and save up for larger purchases.

By: Mrs. Micah

Mrs. Micah — Thu, 17 Jan 2008 13:45:34 +0000

Congrats, JD! Just don’t buy a Mini Cooper to celebrate.

I really liked Lynnae’s article as well…I think I may try that with my kids someday.

By: Ron@TheWisdomJournal

Ron@TheWisdomJournal — Thu, 17 Jan 2008 12:56:30 +0000

WOW! You must be on top of the world right now. Congratulations.

How long did you work at it?
There’s nothing like the feeling of chipping away at a goal and finally seeing it happen!

By: Patrick

Patrick — Thu, 17 Jan 2008 11:40:20 +0000

Congrats on killing that last debt payment, JD. Here comes the fun part - watching your money grow. It’s amazing how quickly saving a few hundred here and there adds up! Then it’s amazing to watch compound interest make it grow even more!

By: Brenden

Brenden — Thu, 17 Jan 2008 05:59:10 +0000

Congratulations on getting rid of your debt! Every time someone defies that “oh, EVERYONE has debt” assumption, it’s a small victory for sensible living.

By: Liz

Liz — Thu, 17 Jan 2008 05:58:57 +0000

JD,
I love your little comic book “issue”! I have the same struggles in the form of books and sometimes it switches to shoes…and it is helpful when I read a comic book update from you. A big congrats on being debt free!! Feels good, don’t it? I’m happy for you that this blog is becoming so successful. I read a lot of blogs and your content is consistently top notch. Since, I blog as well, I know the effort involved.
Just wanted to say “thanks” for keeping it real.
Liz

By: Flexo

Flexo — Thu, 17 Jan 2008 05:14:43 +0000

And of course, congrats on the lack of debt obligation!

By: Lynnae @ Being Frugal.net

Lynnae @ Being Frugal.net — Thu, 17 Jan 2008 05:05:10 +0000

Congratulations on being debt free! I can’t wait until I’m right there with you!

And thanks for mentioning my post!

By: Debt Free Revolution

Debt Free Revolution — Thu, 17 Jan 2008 05:02:36 +0000

Oh wow!! HUGE congrats on killing off the non-mortgagedebt! I should be joining you in that wonderful feeling in just a few short months

By: Flexo

Flexo — Thu, 17 Jan 2008 04:56:19 +0000

Thanks for the link. I just finished writing another part to that series on saving and when I read your post above, I saw, “The Saving Sword of Conan.” Sigh, I need to get out more.

By: Pinyo

Pinyo — Thu, 17 Jan 2008 04:53:57 +0000

Congratulation on being debt-free! I am almost there — not counting mortgage, of course.

Thank you for mentioning the best of PF blogosphere post, and thank you for your support — now and in the past.

Comic books…uh oh. I still have a bunch of unopened ones. I sunk a lot of money into that. Be careful!