Jeremy Bunner the ramblings of an architecture student

20Jan/10N/A4

My views on finance…

I guess I have a kinda abnormal upbringing, as it relates to money. My parents never made much money (my Dad is a pastor and a school bus driver, my mom is also a school bus driver). They never told me any real figures but I'd say that together, their annual salary is/was less than $30k/yr. I consider this to be a low salary for a family of 5. However, they managed to make things work.

I'm not saying that we were poor, just that we couldn't do things like take a trip to Disney, DC, Vegas, or whatever whenever we wanted to. We usually had a small vacation every few years, and that was fine with me. I think I am not getting to my point....

My point is that my parents taught me how to be financially smart. For as long as I can remember, my parents have lived off of a budget. I don't know the number offhand, but MOST of Americans live from paycheck-to-paycheck! I just cannot believe that, coming from a family that had a strict monthly budget. And when I say strict, I mean that they stuck to the budget.

Lately I have been noticing more and more people talking about money and financing stuff. I want you all to know YOU DON'T HAVE TO FINANCE THINGS! Personally, I have never had a loan in my life. I have no idea what my credit score is (nor do i care). I have figured out that I can live my life without ever owing anybody ANYTHING! Do you realize what that means? I will never pay interest for stuff that I don't need.

Say I want a new MacBook Pro (and I do) because mine died recently. I've had a few people ask me why don't I just get a credit card/get a loan/pay for it in payments. BECAUSE THAT'S NOT THE WAY THINGS SHOULD BE DONE! America would not be in the terrible financial shape it is if everyone would spend smartly! Sure there wouldn't be huge financial businesses but those are the plague of this great nation anyway! blaaaaaaaaaaa my mind is going crazy and I don't know what to type now.

If you have read this far, I commend you. I typically don't write like this. I will leave you with this: an infographic showing some surprising figures on debt in America.

photo source

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  • Scott
    I agree, Jeremy. I know people who took out loans for things like cars, only instead of getting a used car, they just bought one new. And I always just wonder what branch of logic it is that they cling to. I think loans can be necessary for some people's financial situations. I know people whose parents just refused to pay for their education, even though they make enough money to do so. But some of those same people would tack on extra loan money to use as expendable cash. They might need new clothes from the mall or want to have the money to go out to the clubs. That is mind blowing to me. If I were in that situation, I would get a job in addition to my loan to keep from going into further debt. I work as a tutor now so that I have gas money and little bit of expendable cash. I worked doing research over the summer and paid for my car. It's used but it's reliable. I saved up money fall of my sophomore year and then I didn't have to work at all in the spring, which really allowed me to focus on my school work.

    As for later in life, I totally see where people could use a little financial assistance, though. So many things come up and go wrong when you least expect them to. I mean, I see how many adults do abuse the finance system, but sometimes all you can do is get into debt.
  • jeremybunner
    Yeah, I agree. Loans for things like education are legitimate, I suppose. It's an investment on your future. If you're going to screw around in school, then I take it back. And I totally agree about some students using their "student loans" to buy unnecessary fun stuff. I guess some people's logic is beyond me and I should learn to ignore it.

    I don't buy what you said about going into debt later in life, though. After college, we should work and be financially responsible. We should always be adding to a 401k or savings account, or whatever. There's a financial guru that my parents follow that offers some great steps:

    1. Get $1000 emergency fund. Use this ONLY when it's an emergency (new clothes at the mall is not an emergency)
    2. Pay off your debt. This is probably the hardest step (unless you're like my and don't have any).
    3. Save 3-6 months of "living costs." However much money you spend in a month, save 3-6x that.
    4. Invest in Roth IRAs - I'm not very familiar with this but my parents are. Their stock portfolio, as laid out by Dave Ramsey, has been making a steady 18% (that's really really good)
    5. College fund for kids
    6. pay off your house
    7. Give money to people who need it (charity, red cross, Haiti, etc)!
  • noam
    You dont finance things because you dont have a house, or a new car, or need a loan to send your kids to college....yet
  • jeremybunner
    All of those (except for maybe the house) can be paid for with cash, m'boy!

    First off buying a brand new car is NOT a good idea- it basically reduces the value by 50% when you drive it off the lot! Buy a hunk o junk cheap, drive it while working and saving, sell it and upgrade, etc. I'm in the process of doing that myself. My parents bought me an older car when I was in high school. The summer after I graduated, I worked and ended up selling that car and bought my new car (http://jeremybunner.com/blog/2009/10/02/cleanin...) with $5000 cash. Next step is selling that car and buying a newer, better one (probably after I graduate, tho).

    And as for college, if you start saving early, your kids' tuition shouldn't be a problem. My parents are paying for my education and they started saving my senior year of high school (keep in mind their financial situation) so that's definitely possible. It just takes a lot of discipline.
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