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Ask HN: What is your financial “setup”?

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Re: Ask HN: What is your financial “setup”?

#141

Post by late2part »

newscracker wrote: post #31
_l4jh wrote: post #16

The thing that really worked for me was I only ever buy in person with cash. I almost never use my debit card in person. This simple thing changed my relationship with what I buy. Obviously my mortgage and other monthly payments are direct debit but unless the purchase is several hundred Euros or more I will pay in cash. I always have €200 in cash on me which is enough to cover me at least a week. Then whatever I hav…

Tangentially related: ever since I read “In Praise of Cash” [1], I started doing as many transactions as possible in cash. I make sure I carry enough change in different denominations so that I can pay almost any amount without having to worry about inconveniencing the receiver for change. It may seem like a hassle to others, but I’m ok with this. [1]: https://aeon.co/essays/if-plastic-replaces-cash-much-that-is...

This is somewhat similar to what You Need a Budget ("YNAB") does. Whereas you are prepared for any transaction and deliberately process it manually; YNAB forces the user to manually document and enter the transaction, recreating a similar process as you do physically. This creates a tangible transaction in the human's brain - making the action stick and be more real.

Re: Ask HN: What is your financial “setup”?

#142

Post by wizzwizz4 »

perl4ever wrote: post #131
sneak wrote: post #29

Earlier quoted context omitted.

This could easily be rephrased as “How come people are so obsessed with using payment systems with real-time warrantless government surveillance for all purchases?” I honestly don’t get it. Why would you pay a percent or two to be surveilled? It creates a time stamped track log, too, which can be easily cross-referenced with (also surveilled) cellphone position. https://www.wired.com/2010/12/realtime/

Pay a percent or two? Well, there's your problem. I'm paid 2 percent "to be surveilled". Plus, it just seems nice to have over a month to pay for stuff I buy.

A small pot of savings will give you over a month to pay for stuff you buy, plus interest on the money you haven't saved yet.

Re: Ask HN: What is your financial “setup”?

#143

Post by akeck »

psv1 wrote: post #18

Important features of any good setup: - you consolidate your finances in the minimum number of accounts & cards - you have a couple of months of expenses as cash in a current or savings account - you pay off your credit card in full every month - you invest some amount every month - all of this is automated - paying bills, credit card repayments, investing, putting money in savings, all of it. Once you have these thi…

I love this minimal approach, but I've learned the hard way that there's a missing word - "resilient".

"you consolidate your finances in the minimum resilient number of accounts & cards"

I almost lost my iCloud data when my single credit card at the time was compromised and the new card got delayed. I now think one should carry at least two independent credit cards of some sort, if one is paying periodically for critical IT (cloud data, domain names, etc).

Another anecdote: a relative had to pay cash (the venue didn't accept cheques) for an expensive rehearsal dinner, because their only credit card was compromised the day before at a business lunch.

Likewise for emergency funds. I've now split my e-fund between two banks to reduce the risk to paying my mortgage in a financial crisis.

Re: Ask HN: What is your financial “setup”?

#144

Post by perl4ever »

alexmingoia wrote: post #139
perl4ever wrote: post #132

Earlier quoted context omitted.

"I don’t use IRAs mainly because they aren’t liquid. I can’t withdraw without a penalty." I'm not a registered tax advisor, so this is not tax advice, but my impression is that you can take money out of a Roth IRA whenever you want, as long as you don't take more than you put in; the profits/returns are tax advantaged, but the original money is after-tax. The reason why people will argue this is a bad thing to do is…

In my mind Roth IRAs will only be advantageous if income tax rates are higher in the future. But that’s true of money kept in savings as well, since it’s already taxed. And Roth IRA gains IIRC are taxed as income at withdrawal, which is higher than capital gains right now. I might be wrong about that though. I don’t see how a Roth IRA is really any different than keeping money in a traditional savings account, beside…

Roth IRA gains are not taxed as income at withdrawal when you're retired - that's the whole point.

To first order, if tax rates don't change, and your investment return is the same, then I believe that you end up paying the same with a Roth IRA as a non-Roth IRA, which in turn is significantly less than a taxable account.

But Roths do have some other incidental advantages like I think you don't have a RMD. And if you have uneven income, you can do (partial) Roth conversions whenever your income is low. Which also gets around the contribution limit.

Re: Ask HN: What is your financial “setup”?

#145

Post by perl4ever »

wizzwizz4 wrote: post #142
perl4ever wrote: post #131

Earlier quoted context omitted.

Pay a percent or two? Well, there's your problem. I'm paid 2 percent "to be surveilled". Plus, it just seems nice to have over a month to pay for stuff I buy.

A small pot of savings will give you over a month to pay for stuff you buy, plus interest on the money you haven't saved yet.

2% cash back on a credit card is worth twenty five times more than 2% interest on checking (assuming you can even get that).

If you spend $2000 every month, and you get 2% back, then that is $40/month or $480 per year. You also get from $0 to $40 interest per year on the money you haven't used to pay your balance yet, depending on the timing of your income and payment date.

If you don't have a credit card but only a checking account paying 2%, and you spend $2000 perfectly uniformly over the course of each month, then you are getting $20 per year interest on an average balance of $1000.

You have a choice of either $500 with a credit card or $20 without. So 2% 2%.

Re: Ask HN: What is your financial “setup”?

#146

Post by dave333 »

Spreadsheet with one sheet per year and one row per day and one column per account or category. Use bank bill pay and schedule payment when I receive a bill or auto-schedule for fixed items. I only worry about the daily balance when it goes below $1000.
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