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Ask HN: What is your financial “setup”?

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

#71

Post by satysin »

sushid wrote: post #65
_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…

I might have recommended this for someone in college in 2000 but this is unrealistic for any reasonable person. Paying cash for a TV at a physical store?!

To clear up any confusion I bought the TV online (so with my credit card, then paid it off in full that month). While I did go to a store to compare a bunch of TVs it was much cheaper to buy online.

My comment about buying the TV was related to not feeling guilty spending several thousand Euros on a TV because we live off a single salary therefore saving it.

What exactly do you find "unrealistic" about using cash over a debit card for day to day purchases like lunch, grocery shopping and such? This is where I find I "lost" most of my money. Lots of 'invisible' (to me at least) purchases could easily suck over €1000 a month from my account alone. Using cash forces me to think about small but frequent purchases. Looking at my previous spending patterns I save between €350-400 a month by using cash over my debit card. With all of the other changes I have made regarding diet that goes up to over €500. And remember this is just my spending. My wife also saves several hundred by using cash over her card as well as she had fallen into the same trap as I of blindly buying with card and not thinking (much) about what it cost.

Obviously a large purchase I do with a credit card for the added protection but I rarely make large (>€100) purchases.

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

#72

Post by alexmingoia »

dmerrick wrote: post #70
alexmingoia wrote: post #69

My radically simple approach to finances is a result of simple living. I spend maybe 1-2 hours a month thinking about money and finances. - I don’t budget. - I don’t use spreadsheets or finance apps. - I don’t have any credit cards, loans, or debt. I don’t care about my credit score because I’m not ever going to get a car loan, electronics lease, or mortgage. - I don’t own a car. If I did I would buy it with cash and…

I was with you until you mentioned you don't use IRAs. Tax advantage is important!

I don’t use IRAs mainly because they aren’t liquid. I can’t withdraw without a penalty.

An IRA is not necessarily tax advantageous because gains are taxed as income when withdrawn, which is higher than capital gains. The choice to use IRAs is not straightforward. It's also hard to plan for any of this because tax rates can and do change. Capital gains and income tax rates may change, so I generally prefer to pay taxes earlier than later where possible.

I have generally found it more financially rewarding to focus my time on increasing income rather than on finagling my finances to save money. Same reason I don’t own a credit card just to get the cash back or other incentives.

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

#73

Post by kiwijamo »

astura wrote: post #46
inetsee wrote: post #43

Earlier quoted context omitted.

As good as this idea is, I suspect that relatively few payroll departments are set up to provide this option, and most of them would resist going to the extra effort to provide it.

What? All the major payroll processors/front ends (ADP, Paychex, PeopleSoft) support this "out of the box," no problem whatsoever. Even when my employers was on paper forms for direct deposit there was always an option for multiple bank accounts. I've never NOT had my paycheck deposited into a multiple accounts except for when I was a teenager at my first job.

My employer’s payroll charges a fee for each additional bank account that they are to pay into.

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

#74

Post by sokoloff »

eb0la wrote: post #67
_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…

I find this fascinating because in Spain we are in a quick restrict-access-to-cash spiral with banks shouting down offices every.month and getting an ATM nearby is increasingly hard unless you live or work in the center of a big city. If you actually touch the money, you can feel easily how much is going out. Plus, I guess having to go to an ATM to get money out makes it more valuable because you pay everything with…

We make it a point to have our kids spend their money in the form of physical cash (and they’re the one to hand it over to the cashier at the store and take the change back). Otherwise, it’s unapproachably abstract for them.

We don’t extend that to our adult spending though.

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

#75

Post by sokoloff »

sneak wrote: post #29
Hackbraten wrote: post #22

Earlier quoted context omitted.

How do you feel paying in cash helps compared to cards? I honestly don’t get it. For me, withdrawing and paying cash simply adds unnecessary complexity, and on top of that, it destroys any paper trail you may need for tracking your individual budgets. How come people (mostly in Germany, from my experience) are so obsessed with cash?

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/

Few places give a discount for cash in the US. I use my credit card and get reward points worth 1-2% (sometimes as much as 5%). I don’t do it specifically for the points, but over the course of a year, getting ~2% of purchases back really adds up.

I get that the merchant is paying it and passing it along to customers. Since they pass it on to me whether or not I use the card (almost always), I might as well take the money.

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

#76

Post by sokoloff »

thatfrenchguy wrote: post #34
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've automated everything except paying bills and credit card payement: I like feeling that money going away.

I automated specifically after getting a few stupid late fees in my 20s. At this point, if it’s not automated, I’m at least 25% likely to be late.

Fortunately, there are only a handful of small bills that I have that aren’t automated. They’re annoying.

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

#77

Post by slenk »

bszupnick wrote: post #7
tra3 wrote: post #2

YNAB ( https://www.youneedabudget.com ) for budgeting and tracking spending. It forces you to pre-allocate your funds which ensures that you don't overspend unconsciously via credit cards. I've been very successful with it. > Anything that follows the "don't make me think" philosophy? I don't think that exists. YNAB requires pretty diligent tracking, but the payout (heh) is huge.

I second YNAB, but as you said, it requires diligent tracking especially for those of us living outside the US and can't hook their bank account into it. I happen to love the diligent tracking, though, and it's just part of my daily routine. Every time my wife or I charge a card or the money from the ATM, we log it in YNAB. Then every day I open my banking app and reconcile the charges with what we've input into YNAB…

I just wish they offered a one-time payment as they used to on Steam. I hate having to budget for another subscription.

I think thats ironic.

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

#78

Post by nknealk »

Several here have mentioned Charles Schwab. I personally use them for brokerage + IRA + checking + savings. It gives me a single view into my finances.

Why Schwab? They have outstanding customer service. One time I was traveling on Christmas Eve and forgot to place a travel notice on my cards. I called and got a human on the line immediately. This is the norm with their customer service whom I rarely call because 99% of what I want to do can be done via their web site from download tax docs to ordering new checks. Also, when traveling abroad they (1) still fulfill their promise of reimbursing all ATM fees and (2) give an excellent exchange rate. I could not be happier with them as my bank.

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

#79

Post by torstenvl »

I use USAA for everything. I have a spending account, a billing account, a savings account, and a mutual fund. I also have TSP (like a 401K).

Every month, I put $600 into my TSP, $1000 into savings, and my total bill amounts into my billing account. The rest goes into my spending account.

Whenever I get tempted to buy nonsense, I ask whether I'd rather buy that or put that money in my savings. If I don't really need it, it goes in savings.

When savings gets over a certain amount, I transfer a chunk into my mutual fund.

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

#80

Post by twunde »

nknealk wrote: post #78

Several here have mentioned Charles Schwab. I personally use them for brokerage + IRA + checking + savings. It gives me a single view into my finances. Why Schwab? They have outstanding customer service. One time I was traveling on Christmas Eve and forgot to place a travel notice on my cards. I called and got a human on the line immediately. This is the norm with their customer service whom I rarely call because 99%…

I'll note that they now have a calling tree and it's harder to get a person on the phone. This is fairly recent, in the last year or so I think.
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