For what it's worth, if you're a HNer, I'll tell you something Ramit Sethi says often which would have been useful to internalize, oh, five years earlier: it is very hard to cut expenditures in such a meaningful fashion that your financial situation qualitatively changes. (There's only a few big wins there, and lattes or "stop buying books" do not qualify.) By comparison, the amount of impact you can have by moving your salary up is quite substantial indeed, particularly because there's just a crazy dynamic range in our industry and, well, most of us by default do not make choices which tend to land us on the top tiers of that range.
Seriously: I get people who email me on an almost weekly basis saying they got $5k ~ $15k a year just by asking for a raise. You know how many trips to the library it takes to move your financial situation by that much? You won't accomplish it in your lifetime. And that's between a few hours of work or, literally in some cases, minutes.
Say you have 2 people earning $30k/yr. One is trying to live frugally, the other is not. Suddenly the latter gets a $10k/yr raise "just by asking". I'd wager that the person with the deliberate, frugal mindset will still have more discretionary cash the day before payday than the one who got the raise.
If you want to get that salary raise, at some point it has to be backed by somebody actually buying something.
If everybody becomes super frugal then the economy shrinks and unemployment gets worse. I guess this is because we're at a point where we don't need anything close to 100% employment to cover everybody's 'basic' needs.
I'm a student who's never had a full-time job in her life, and I have more money in savings than many well-paid professionals I know, simply because I actually put money into savings.
It's also helpful because the same technique that helped me earn an X% raise has worked over and over again, with roughly the same results. So when you learn to negotiate, you're changing the rate at which your income grows, as opposed to a one-time increase in income. That has a massive effect in the long term.
Seems like a pretty specious argument. If you pay bills, then you know when bills are due and you know when payday is. That's finance in a nutshell - managing your AR and your AP.
"Do you live within biking distance from work? No? Then move closer to work."
I live in one of the better school districts in the area and pay a premium to do so. Why would I move from a better school district to a worse one?
I realize that this is Hacker News, and that many people here are younger than I am (and I'm young myself), but this person is trying to give advice about something he may not be quite old enough to understand yet.
USAism because you're still using checks and other old money tech.
In the modern world: My rent, insurance, electricity, heating, phone, mastercard, newspapers, etc are payed automatically every month. Whenever I get a bill, it contains a 'subscription id' which I enter in my online bank, and all following bills are then sent as an electronic invoice to my bank which then automatically performs the requred transfer of money on the due date. I don't even see those bills unless I want to spend time looking at it. I don't receive those bills in the paper mail. Everything is online.
Same with my wage. It just goes into my account after taxes are automatically payed. I don't need to do any work to pay my taxes.
Thus, I don't need to know when it's pay day unless I use too much money.
They only time I notice I got paid is when I make a ATM withdrawal and see the balance go up.
I've got my finances setup pretty well and I still know when payday is and enjoy it very much. No, I don't need the money to get through the next two weeks but it's still fun to receive money. I'd almost argue that if you don't know when payday is, and when money is coming in and out of your account, you don't have your financial shit together.
Besides that, this article doesn't really provide any tips or advice that a generic "save more money" article on MSN would offer. Some examples from the authors personal financial "hacks" would have been helpful.
My impression is that the usual cause of payday unawareness is when people have enough liquid funds that "getting paid" doesn't have any significant effect. There's an argument to be made that such people probably have too much liquidity and should be more aggressive about investing their wealth, but that's certainly a better position to be in than not having enough liquidity.
It also has one huge downside the article neglects to mention. If your work is in the center of town (as many offices are) you often either have to greatly increase the amount you spend on housing or greatly decrease the 'quality' of the housing.
For disclosure sake I do live in an apartment in the center of town, but in doing so I'm sacrificing things like a garden and a my daughter getting her own room. It's a price I'm willing to pay, but I'm fully understanding of people who aren't.
Now as it stands non of these wishes have become important enough for me an my girlfriend to give up the city, and they are all 'problems' that can be worked around, but there are more reason to want space than simply to store things
This. I've lived this way for the past 8 years and it's been a breath of fresh air. To me, this is the definition of "living within your means."
Although I think it's not for anyone. Some people actually enjoy pinching pennies or spending frivolously while watching their bank account constantly in either case. I can't really identify with that, and it would drive me crazy.
It's easy enough to stop buying consumer stuff that you don't need, but you do need some way to entertain yourself and if you want any social or family life at all eventually you're probably going to end up in some pretentious bar with overpriced drinks.
My point is more that this is trumpeted as ground breaking financial advice but actually in many cases you can still have financial problems even if you aren't buying crap you don't need at which point trying to cut expenses gets exponentially harder.
This has been happening for 40 years in the United States.
That can mean many things - for every year you work, you could theoretically retire one year earlier. You could now afford a car that doesn't cost more in maintenance than gas each year. You could now afford to double your extremely tight grocery budget and spend more money on healthier foods.
"Lifestyle" and "standard of living" are unquantifiable, which is why this is a compelling factoid, but the reality is that, ignoring inflation, a 10% increase in salary is a 10% increase in disposable income.
Now obviously if you have more disposable income than you need, a 10% increase doesn't mean much. If I was pulling down 200k I wouldn't move for 220k if I was happy where I was at, but if I was pulling down 40k I would move for 44k in a heartbeat.
That is if you live in a tax-free zone :)
I think it might better to think that if your income doubles you should only increase your lifestyle by 10% or so.
You should put as much of the extra income into investment , savings , getting clear of debt etc.
Happiness can be quantified, then there are things like the Human Development Index, Satisfaction With Life Index etc.
If you are a ordinary working class citizen, you are not likely to make it big unless you save and invest when you are having it good. I've seen a lot of people who didn't save and invest only to be saying later, If at all I had done so...
Saving money cannot increase your income by drastic size. But not saving, can sure decrease it.
That's the whole point.
It's easy for a fit 20 year old who lives on a flood plain to say that more people should cycle to work. It's not so easy for an overweight 40 year old who needs to drop her kids off at daycare, works at the top of a steep hill, and needs to buy groceries on the way home.
I agree though , probably the biggest factor here is managing kids and working everything around their timetable.
I know plenty of people who could bike or use public transport to get to work but like the piece of mind of knowing that if they need to go anywhere they can just jump in the car and go without the planning headaches.
If you are in fact a overweight 40 year old who has kids and luggage needs then what about: http://www.kickstarter.com/projects/faradaybikes/faraday-por... ?
An electric bike for hills, add on a kids seat on the handle bars and on the rear wheel and then put your groceries in the front basket. Solution. Physically incapable?
This bike is on the expensive side at $9.50/day, but compare that to car, gym membership and public transportation cost and you might be breaking even.
Of course this might not work in all locations, but it is a solution for many.
But there is only one person who uses a chariot to drop their toddler off at daycare on the way.
We have discussed renting a garage a couple of miles from our house if we ever do buy a car though.
Basically, the idea is that for every mile you live closer to work, you can afford another $15,900 worth of house.
It's also interesting when you throw in cycling to work; I used to argue with a friend about going to the gym (which I'm not fond of). I told him I could bike to work (20 minutes) and bike home (20 minutes) for a total of a 40 minute workout during my commute and save myself the extra hour (maybe more) it would cost going to the gym everyday.
And you can't even ditch the car and all the maintenance costs and efforts that go with it because you will still need it occasionally.
[1] http://medicalxpress.com/news/2012-09-short-intense-health-l...
Years ago I used to do a 40 mile round trip to work by bike with a few good hills on route , so there was a mixture of hard anaerobic effort and lower intensity pedalling. After about 3 months of that I was probably never thinner and fitter.
Regards sweat, this depends on if you can shower at work I guess and also how sweaty you get. If you wear cycling clothing that can absorb a lot of the sweat and then change and spray some deodorant when you get to work you really don't smell all that bad.
e.g. reddit.com/r/minimalism http://zenhabits.net/start/
Since we've started, we've increased our annual allocation to long-term savings 100%. Investing is also a lot more fun.
Are there only fees for selling?
