# Money and Credit Cards



## readytogo

I guess this may be a wakeup call.
http://finance.yahoo.com/news/young-americans-ditching-credit-cards-103000414.html
My daughter finally caught on, bank fees where draining her account after direct deposit stop and the new account limits kick in she notice less money
so she closet it, the clerk kept asking why, till I show her a copy of an article of how much money banks made last year on fees,$10 billion, in my opinion the Gov. should have let them cave in and start over again.


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## swjohnsey

I don't pay any fees.


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## Sentry18

> About 16% of consumers ages 18 to 29 didn't have a single credit card by the end of 2012


That's smart of the 16% who do not have credit cards, but that still leaves a big number who do.



> Older Americans are another story, however. While they also lowered their credit card debt, they racked up more auto and mortgage debt.
> Consumers 40 and over therefore have more overall debt today than they did in 2005. And as a result, FICO scores have fallen 1.7 percentage points among the 40 to 49 age group, 1.8 percentage points for those ages 50 to 59 and 3.8 percentage points for consumers 60 and older.


_Gimme gimme. I need a flashy new car, the biggest house on the block and all kinds of toys. And I am too impatient to save up for any of them. I need instant gratification!_

So ridiculous. We have one credit card (for traveling) which I have never paid interest on. We have no loans. We pay cash for our cars. And our mortgage was made with 20% down and we make double payments. My money MAKES me money. I don't work so I can make other people rich off of fees and interest.


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## BillS

A lot of older people have dipped into their credit cards after they depleted their savings. Fewer people in their 50s are working and many of them make a fraction of what they used to make. As you get older you're on more and more prescription drugs and insurance pays less and less on them. One year we spent over $3,000 on car repairs for our 1995 and 2000 Buicks and both of them still have less than 100,000 miles on them.


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## BillS

swjohnsey said:


> I don't pay any fees.


I use one credit card to buy business inventory. The 1% rewards make me $30 to $40 a month and I don't pay a dime in interest.


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## tsrwivey

I'm fixin' to be 40 & the ONLY debt we have is on the house, we owe less than 20% of what it's worth. We never rack up more on a credit card than we can afford to pay when the bill comes in, we never buy vehicles or toys on credit, we save for our retirement, & we keep a minimum of 8 months expenses in cash on hand in addition to the money we put back for vehicle repair/replacement. We have a $10k deductible on our health insurance & that money is in a separate account in case it's needed. That's the way our families have done things for generations. $hit happens sooner or later & we will get sick at some point, I just don't understand spending all your income like your current situation will continue forever.


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## hiwall

My kids both have credit cards and are wise on their use. I use my credit card for every purchase possible(I like getting the 1%). Banks, credit cards, alcohol, etc all have their uses and it is up to each person to use them wisely.


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## helicopter5472

I worked on paying my house off first, that's done, my motorhome , truck, snowplow, and one car, and bus are paid off. The truck we hardly ever use and the paid car has 165K on it, but still runs, goes, fine. Both my wife and I drive over 70 miles a day each to and from work so we bought new ones (last year) we owe on these but they are both under warranty. So yea we have only two payments, but the way I look at it, if SHTF what are the chances they will come for them, and if they do, we probably won't have a job to need them, and we have paid for ones to get around...That is, if there is any gas available...


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## Caribou

I have a couple cards with annual fees. I pay no interest and with the free rooms from one card and the free airfare on the other I come out way ahead.


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## invision

Won't say how many CCs we have, but all the limits are over $50k each.. We do have other cards like Havertys, Lowes, Best Buy all also with high limits and zero balances. These cards are used to get 12-18 months zero interest on major purchases - the last was for a bedroom set that cost around $10k, which had 18 months no interest which we paid in full within 9 months. Nothing is owed on the other cards with one having a revolving balance around $1500 a month that is paid in full each month, we rotate usage to a different card every 2 months to keep cards reporting activity and paid in full status. These charges are typically normal bills - electricity, cable, gas, etc... 90-95% of all other purchases we either pay cash or use debit cards... Only the AMEX has a membership fee, which by the end of the year the points gained more than pays for it as I use it for business - plus it does not have a limit on it. My monthly usage ranges from $0 to the highest of $45,000 on this card and like I said is paid in full at end of month (used for hardware, software, etc for projects)... I charge upfront for any equipment before a project starts, then instead of using a check or debit card, I use the AMEX and pay it at end of month.

As for banking, we have more than 3 banks we use for checking/savings, plus 2 for my business... All are completely free, only fee would be if we were to pull from another bank's ATM, which we don't use. 

Because we have it setup this way our credit scores are both in the 800s. We have the house note, and three car payments - the oldest is a 2010 Vette.. The other 2 are 2012 and 2013 models. We simply will never own a car out right because we trade in to often, typically close to warranty ending or when we get bored with what we are driving. The only maintenance on the cars is oil changes and tires for the Vette every 18-20k miles which runs around $2,400 for the 2 sets of tires... The cars are either GM or Nissan because we get special pricing through my wife's employment, which also means our out the door cost, and 2-3 years of ownership, we have never been upside down on a trade...


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## mojo4

We cut up all our credit cards and now only owe on the house and a few more payments on my wifes car. My two trucks are free n clear. Although I think we will open up a new credit card for each of us to bump up our credit score and for airline miles. It is much nicer without mounds of debt! I just wish we were closer to paying off the house but a little at a time I guess.


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## Cabowabo

I'm 23 years old. I have no credit cards, and no debts. My only two bills for the month are Renters insurance and internet. I live in the barracks and eat at the chow hall while seeing the world. I try to Follow the Dave Ramsey principles. 
I have $1,000 saved for an emergency, money I hope not to touch.
I have $18,000 saved for a truck when I get home in a year for good. I will be getting a nice used truck, after sacrificing for two years and a deployment I think I've earned a nice truck in cash. 
I will in August have money fully saved for a ring for my girlfriend.
I have money invested in a ROTH, and a regular Mutual fund. And I'm going to in September start to throw half my take home pay a month into savings for land. 

The only card I have is a debit card, and a travel card for my job. I never want a credit card in my name. I see my friends burdened with car and truck payments and other loans. They just look like slaves to the bank.


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## Toffee

My husband and I never wanted a credit card at all. Then we went to buy a house. We had the money to buy it outright and would only have had to pay rent on the lot. They turned us down because we had no credit history. So now we have a credit card and my husbands score is in the high 600s and mine the low 700s. I figure that's not bad for only a 3 year credit history and no loans to our name. We are looking at getting a second card with as high a limit as possible as a just in case tshtf sort of thing.


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## mojo4

Having good credit is like any other prep. You hope to never need it and pay for cash but if you really need it you better have it.


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## Cabowabo

I disagree on credit cards. I've seen friends get pay check to pay check. IMHO you play with snakes your gonna get bit. 
I counter the need for a credit card by having plenty of money saved at all times. Besides ain't preppin bout being more self reliant? Whats self reliant about a credit card?


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## drfacefixer

Cabowabo said:


> I disagree on credit cards. I've seen friends get pay check to pay check. IMHO you play with snakes your gonna get bit.
> I counter the need for a credit card by having plenty of money saved at all times. Besides ain't preppin bout being more self reliant? Whats self reliant about a credit card?


You need to understand the importance of credit - how to build it, how to use it in running the cash flow vs credit balance of your business ect... As toffee said, by not having a credit history you have a poor credit history. When it comes time for you to by land, unless you are going to pay cash for that, the banks will either laugh at you or gouge you with high interest because you are a risky loan.

You are getting the debt free part of Dave Ramsey correct. But what about the savings? How many years is it going to take you to squirrel away tens of thousands of dollars for land if you plan to pay cash? Are you going to lose interest on that money by hiding it in your home? If you had the cash the money you could make by investing that saved money would likely earn a higher return to cover a low interest mortgage and still be earning you something. There may be risk in not being free and clear , but you have to be just as prepared if nothing ever hits the fan.


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## tsrwivey

You don't have to use credit cards to establish credit, a personal loan at the bank will do the same thing at a much cheaper interest rate.

Unless you plan to pay cash for your house, you will need excellent credit, & a long history of it, to get a home or land loan, & it gets even harder than that to get one after the first of the year. We buy & sell property pretty regularly, we used to make a phone call to our loan officer & it was a done deal. That's not the case anymore. Now, if the property exceeds the amount we can get on a personal loan, we have to fill out an application, get our credit checked, etc. We've never been told no, but our loan officer says they're turning down people that they would've gladly loaned the money to 5 years ago. Things they are a changin', & if you ever want to own your house &/or some land, you're going to have to have a long term plan to achieve it.

Want to be your own boss & own your own business or just do some freelance work? Come the first of the year, it will be extremely hard for anyone who has even a portion of their income from a non W-2 source to get a loan, no matter how long you've had that income. That'll choke small business & the housing market as well.


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## Cabowabo

I understand the importance of credit. But I don't worship at the alter of the great credit score. 
I figure in two years right before I leave active duty, and 3 years when I do leave AD. I will have roughly $25K up to 37K saved for the purpose of land. Without diving into my personal finances which are none of your business. But if the land I wish to buy is $50K and I'm putting down $37K, you would have to be on Crack not to make the loan. Now the range depends on if I catch one deployment or two deployments. If I catch no deployments then I won't be buying land in the next 3 years. 
If I don't have over 50% of the price of the land that I'm looking at buying, then I'm not in a position to buy the land. Or if I'm trying to buy a house and I don't have over 20% to buy the house with the land. I'm not in a position to buy a house.


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## tsrwivey

I had no intentions of trying to delve into your personal finances & was by no means recommending you worship a credit score. I was merely trying to share my real life experience of 20 years of buying & selling houses & land. Unfortunately for you, the banks are "on crack" & wouldn't make that loan to someone with no/little credit. But I'm sure you know better than anyone else. I was just trying to tell you how things are out here in reality, they're not always how we think they should be. No offense meant :wave:To be 23 again


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## Cabowabo

tsrwivey said:


> I had no intentions of trying to delve into your personal finances & was by no means recommending you worship a credit score. I was merely trying to share my real life experience of 20 years of buying & selling houses & land. Unfortunately for you, the banks are "on crack" & wouldn't make that loan to someone with no/little credit. But I'm sure you know better than anyone else. I was just trying to tell you how things are out here in reality, they're not always how we think they should be. To be 23 again


The delving into my finances comment wasn't directed towards you. If they don't want to loan the money, then I'll either get less land or I'll just have to save more money and pay cash.


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## tsrwivey

Save all you can while you're living on base. Civilian life is expensive. Best of luck to you & thank you for your service. Ya'll watch out for each other over there.


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## invision

Cabowabo said:


> I'm 23 years old. I have no credit cards, and no debts. My only two bills for the month are Renters insurance and internet. I live in the barracks and eat at the chow hall while seeing the world. I try to Follow the Dave Ramsey principles.
> I have $1,000 saved for an emergency, money I hope not to touch.
> I have $18,000 saved for a truck when I get home in a year for good. I will be getting a nice used truck, after sacrificing for two years and a deployment I think I've earned a nice truck in cash.
> I will in August have money fully saved for a ring for my girlfriend.
> I have money invested in a ROTH, and a regular Mutual fund. And I'm going to in September start to throw half my take home pay a month into savings for land.
> 
> The only card I have is a debit card, and a travel card for my job. I never want a credit card in my name. I see my friends burdened with car and truck payments and other loans. They just look like slaves to the bank.


Posted before I read the rest of the thread...

Serious question, do you ever plan on owning a home?

My reason is, in today's world you do need to have some type of credit rating... Paying everything in cash is very commendable, and yes I agree you definitely deserve to have that truck... But with that said, even if your buying a $100,000 house, and have 50% saved up for the down payment, even with a VA loan, having no credit will hurt you..

I like Ramsey's approach, but Clark Howard actually has some great advice too... Get one or two CCs, use them for minor purchases - gas, your Internet, cell phone, etc... Small stuff you always pay cash for every month... And pay them off in full when you get the bill. There is nothing evil about CCs, IF you can manage them correctly... However, going on a spending spree because you have a 'credit limit' is wrong financially, but by your comments, I highly doubt you would be like your friends.... I have no doubt you WOULD NOT become one of the paycheck to paycheck people...

Also, after your done serving (and as I have said before, thank you for protecting our country!) if you go off to school, lets say you end up in a field looking for employment that requires a financial background check... My wife has to have everyone under her scanned every year, because of the money handling aspect of the jobs... Her boss checks hers too. So this could be an important aspect of your work career in the future. I have 6 clients that in Feb I have to have my accountant send a letter of financial stability to them, I don't let them know how cash positive I am as a company, but the letter covers the same as an audit from them... So again having a record that says you know how to handle money.

While having $1,000 in an emergency fund is admirable, as you know shit can happen, that $1,000 can be used up very quickly, a bank loan would be nearly impossible without some type of credit history... Living in America where you don't have housing, food handed to you because you are active duty is very different from non-AD... Let me give you another simple example... Renting an apartment, my dad has many rentals, small town 14,000 people... If you have served 20 years, paid everything in cash, can even show him you have 6-12 months rent saved up sitting in a bank account or invested in safe places like CDs, he isn't going to rent to you, because you have no history of making payments on time... The same will hold true for anywhere you want to live as a renter... The first thing they will do is run a credit check on you, having a score of 0 is gonna disqualify you immediately...

Just saying...


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## hiwall

In the brave new world we have now, I feel one of the things we should all have is a credit card. I fail to see any down side to owning one. And there is many pluses to having one. If anyone wishes to not have a card that is certainly their choice. I am just saying that there are many pluses and no minuses(if you use it wisely). Like all personal finance decisions, it requires careful thought and execution.


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## readytogo

You start something never knowing how is going to go or how far, take this posting here and the must read replays on it, everybody who opens this forum should take time to read them, like stated here the percentage of the population who are aware of their own financial situations are few, everybody is following the banking train straight to a black hole the voices of our elders have been long forgotten ,and no one to blame except the reflection on the mirror.
A true story, 2-3 years ago the neighbors house was sold, 3 bedroom,2 bath, wooden floors, beautiful kitchen, for $280,000, demolish for another $30,000,and a new 2 floor cardboard house went up, cardboard because
of the cheap construction and speed of building, anyway $800,000 later a couple moved in, fancy cars(Porsche/BMW),6 months later foreclosure the new couple are in the medical field, they must not believe in light bulbs,but anyway this is the type of mentality around this nation, everything has to be new, new,new ,must have the latest gadget, like the refrigerator with a TV on the door; America Most Wake-Up and stop this blaming game, this party will be over soon.


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## tsrwivey

I think everyone should do a balance sheet every year, where they see their assets vs liabilities in plain & simple numbers. Run the numbers on various common minor emergency situations, a fender bender, fridge goes out, or a trip to the emergency vet. Most here would classify these things as "life", but a vast majority don't have the cash to deal with these expenses. I love Dave Ramsey, but $1000 isn't close to cutting it as savings. Three months worth of expenses is a good start but in this economy, at least 8 months is much wiser. It has taken many people longer than three months to find a job & even less are able to replace their previous income. You need to be able to pay the bills long enough to figure out what needs to be done & down size. Houses, cars, & toys can't be sold overnight. Having the money to take your time & make wise decisions can mean the difference between financial ruin & a reorganization, not to mention the difference in the stress on yourself & your family.


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## invision

tsrwivey said:


> I think everyone should do a balance sheet every year, where they see their assets vs liabilities in plain & simple numbers. Run the numbers on various common minor emergency situations, a fender bender, fridge goes out, or a trip to the emergency vet. Most here would classify these things as "life", but a vast majority don't have the cash to deal with these expenses. I love Dave Ramsey, but $1000 isn't close to cutting it as savings. Three months worth of expenses is a good start but in this economy, at least 8 months is much wiser. It has taken many people longer than three months to find a job & even less are able to replace their previous income. You need to be able to pay the bills long enough to figure out what needs to be done & down size. Houses, cars, & toys can't be sold overnight. Having the money to take your time & make wise decisions can mean the difference between financial ruin & a reorganization, not to mention the difference in the stress on yourself & your family.


Wow, I totally agree with you, very nicely said...

We never run on a budget, however we have a balance sheet that is updated every month for my business AND our personal finances... And always have at least 6 months if not the 8 months of cash on hand... I would guess less than 3% of Americans do...

We have had those "you gotta be kidding me, oh crap" moments like everyone... 2 years ago my beloved Boxer blew out her ACL, $2400 for surgery, then 3 weeks after surgery she dies in my arms because she over reacted to being in a cage and twisted her stomach, we didn't have time to get her to a 24 hr vet... . One trip to Vegas we came home to find at the old house we had been hit by lightening, fried the entire circuit box, ash falling out ruined a carpet - $1,200+ to get it all fixed, 2 months for insurance claim to be settled. Before I was married, a tornado hit my wife's house and took off a ton of shingles - option pay out of pocket to get fixed or stand inline and wait for check? She paid the $8000 to get the roof and waited for the check to reimburse cost...


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## BillS

Cabowabo said:


> I'm 23 years old. I have no credit cards, and no debts. My only two bills for the month are Renters insurance and internet. I live in the barracks and eat at the chow hall while seeing the world. I try to Follow the Dave Ramsey principles.
> I have $1,000 saved for an emergency, money I hope not to touch.
> I have $18,000 saved for a truck when I get home in a year for good. I will be getting a nice used truck, after sacrificing for two years and a deployment I think I've earned a nice truck in cash.
> I will in August have money fully saved for a ring for my girlfriend.
> I have money invested in a ROTH, and a regular Mutual fund. And I'm going to in September start to throw half my take home pay a month into savings for land.
> 
> The only card I have is a debit card, and a travel card for my job. I never want a credit card in my name. I see my friends burdened with car and truck payments and other loans. They just look like slaves to the bank.


I think $18,000 is way too much to spend on a vehicle given what you make.
It would make a lot more sense to buy a car instead of a truck because they're a lot cheaper. I'd look for a low mileage car for about $5,000. The last car we bought was a 1995 Buick Century that had 55,000 miles and cost $2,000 in 2010.

$1000 is not an emergency fund. It's baby step #1 to financial freedom. An emergency fund is 3-6 months worth of living expenses.

It's good that you're saving money. You're ahead of 95% of the people your age. I wouldn't put any into a mutual fund. It's a bad investment right now given that the economy is imploding.


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## Tweto

BillS said:


> I think $18,000 is way too much to spend on a vehicle given what you make.
> It would make a lot more sense to buy a car instead of a truck because they're a lot cheaper. I'd look for a low mileage car for about $5,000. The last car we bought was a 1995 Buick Century that had 55,000 miles and cost $2,000 in 2010.
> 
> I have to disagree a little. If I could have only one vehicle I would have a truck. You can buy trucks for the same price as a car and the truck has ways to pay for itself. It maybe because of where I live or the way I live but life would be very difficult without a truck.


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## Caribou

trswifey is right when she recommends 8 months reserve. That means mortgage/rent, food, gas, utilities, etc. after you buy whatever you want to purchase. 

I have seen people have to put up 50% to purchase a house. They had less than perfect credit. You have apparently zero credit history. Do not expect bankers to use the same rational decision making process that you do. Would you loan your money to a total stranger with no credit history? If you are given a loan you will likely pay a higher interest rate. 

Like everyone here I am trying to help you meet your goal. I applaud your cash only policy. My cash only policy is don't put anything on the card that I can't pay off when the card comes due. Thank you for your service.


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## BillM

I attempted to draw out a large amount of cash today but was told that $5000.00 was the limit for a cash withdrawal. I was offered a "Cashers Check" for the remainder of the money and told I could pickup the rest of the requested amount in cash, in seven days. My bank PNC, provided me with a brochure regarding "Large Currency transaction reporting and recordkeeping.

The bank is required to fill out and submit to the IRS a form 104-currency Transaction Report.

Banks are required to report any cash transaction involving $10,000.00 or more.

They are also required to report any pattern of large transactions that are unusual for the person or account. this can involve amounts less than $10,000.00.

If you think you have money sitting in your checking account that you can draw out in cash at will, you are dead wrong.

If you can't hold it in your hand, you don't really own it !


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## invision

BillM said:


> I attempted to draw out a large amount of cash today but was told that $5000.00 was the limit for a cash withdrawal. I was offered a "Cashers Check" for the remainder of the money and told I could pickup the rest of the requested amount in cash, in seven days. My bank PNC, provided me with a brochure regarding "Large Currency transaction reporting and recordkeeping.
> 
> The bank is required to fill out and submit to the IRS a form 104-currency Transaction Report.
> 
> Banks are required to report any cash transaction involving $10,000.00 or more.
> 
> They are also required to report any pattern of large transactions that are unusual for the person or account. this can involve amounts less than $10,000.00.
> 
> If you think you have money sitting in your checking account that you can draw out in cash at will, you are dead wrong.
> 
> If you can't hold it in your hand, you don't really own it !


About once every 2-3 months we hit a casino, I always call my banker and say, I am coming in to the X branch in 3-4 days and I need $10,000 or whatever in $100s. My banker goes "yes sir" and bang it is there, yes I have to sign IRS forms.... PNC is a very decent sized bank, I am surprised at the 7 day wait...


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## BillM

*My consern*



invision said:


> About once every 2-3 months we hit a casino, I always call my banker and say, I am coming in to the X branch in 3-4 days and I need $10,000 or whatever in $100s. My banker goes "yes sir" and bang it is there, yes I have to sign IRS forms.... PNC is a very decent sized bank, I am surprised at the 7 day wait...


My concern is , what if I needed to have a large amount of cash right away?

Why is it the Business of the IRS or any other government agency what I choose to do with my own money?

What if there was a run on the bank? Would I ever see my money again?
:dunno:


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## invision

BillM said:


> My concern is , what if I needed to have a large amount of cash right away?
> 
> Why is it the Business of the IRS or any other government agency what I choose to do with my own money?
> 
> What if there was a run on the bank? Would I ever see my money again?
> :dunno:


I see you point to #1 - absolutely do, but today is the world of electronic bits and bytes - I can instantly transfer $x from bank to bank... We are encouraged to use not just CCs but debit cards instead of carrying cash...

#2 sorry, I agree with that... It's the same reason the US stopped using large denominations like the $500 and $1000 bills... Drug and Money Laundering.... #2 helps prevent that to a degree...

#3 - yep, FDIC - but it may not have the value of what it was worth at the time you wanted to get it out...


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## Tweto

I have drawn cash from my bank. I'm aware of the IRS paper work for withdrawals over 10K. The reason they don't want you to take to much cash is because they don't have that much cash on hand. That's the way banks work now. When I need a large some of cash, I withdrawal 5K a week every week till I have what I need.

I'm sure that if I called the bank and said that I needed $10,000 (like Invision said) that I could get it if I let them know in advance. However, every time I went into the bank to get $5000, they had to go to the vault to get it and I had to wait for the teller supervisor to check me out. I try to not attract any attention when I do this so I sit in the parking lot till there are almost no customers in the bank.


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## machinist

I never did get the idea of using banks for anything except MY benefit. Any money you deposit in a bank is an UNSECURED LOAN to them. They proceed to do their thing with it, loaning it out SEVERAL TIMES, based on the fractional reserve system, and thus are playing a Ponzi scheme with DEPOSITORS' MONEY. Stupid to let them have it, IMHO. 

I perfectly understand all the "convenience" features of modern day electronic banking. I also understand the great vulnerability of the depositor. Any questions on that, read about Cyprus' banks depositors. In today's world, it is very risky to play in the banking arena, IMHO. If you choose to do that, be sure you understand the risks. 

I prefer to keep our bank accounts small, have zero debt, and assure that our investments are all in real things, not paper promises. We have credit cards, only used for online purchases and paid before the bill comes in. 

We ran a small business for several years having only a business checking account and credit card, paid in full when billed. But, our business was SOLVENT. That is, it was solvent on a cash basis constantly, never using any credit of any kind that did not have cash on hand to back it. Personally, I cannot see any reason to use credit on the massive scale that is common now, neither for business or personal use. If you assess the costs of operating on credit, it is astounding, and those costs simply line the pockets of bankers to no productive end. Think about how much more productive our country could be without those costs! It is DEPOSITORS' money that pays for all those nice big bank buildings and all the people who work in them, none of which is of any benefit to ME. 

Basically, I believe that if you don't have enough money on hand to buy what you want, you simply can't afford it. Call me primitive, or whatever, but you have to also call me solvent.

Yes, I once had a mortgage to our home. I also got rid of it ASAP, and that was the end of debt for us. Never again. I cannot afford to support any bankers in the style they want.


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## invision

machinist said:


> I never did get the idea of using banks for anything except MY benefit. Any money you deposit in a bank is an UNSECURED LOAN to them. They proceed to do their thing with it, loaning it out SEVERAL TIMES, based on the fractional reserve system, and thus are playing a Ponzi scheme with DEPOSITORS' MONEY. Stupid to let them have it, IMHO.
> 
> I perfectly understand all the "convenience" features of modern day electronic banking. I also understand the great vulnerability of the depositor. Any questions on that, read about Cyprus' banks depositors. In today's world, it is very risky to play in the banking arena, IMHO. If you choose to do that, be sure you understand the risks.
> 
> I prefer to keep our bank accounts small, have zero debt, and assure that our investments are all in real things, not paper promises. We have credit cards, only used for online purchases and paid before the bill comes in.
> 
> We ran a small business for several years having only a business checking account and credit card, paid in full when billed. But, our business was SOLVENT. That is, it was solvent on a cash basis constantly, never using any credit of any kind that did not have cash on hand to back it. Personally, I cannot see any reason to use credit on the massive scale that is common now, neither for business or personal use. If you assess the costs of operating on credit, it is astounding, and those costs simply line the pockets of bankers to no productive end. Think about how much more productive our country could be without those costs! It is DEPOSITORS' money that pays for all those nice big bank buildings and all the people who work in them, none of which is of any benefit to ME.
> 
> Basically, I believe that if you don't have enough money on hand to buy what you want, you simply can't afford it. Call me primitive, or whatever, but you have to also call me solvent.
> 
> Yes, I once had a mortgage to our home. I also got rid of it ASAP, and that was the end of debt for us. Never again. I cannot afford to support any bankers in the style they want.


Actually, your incorrect, the deposits are liabilities for the bank, and they don't make a dime with your money UNLESS they loan it out, when they make a loan that is recorded as an asset and to insure trust your money is insured by FDIC to boot... So basically, if everyone did as you did, where you were 100% operating without any debt at all and only using the bank as a transfer from client's bank to your bank to your pocket, then the entire banking system would collapse. If they started charging fees to transfer the money, then you would be complaining about that right?

How did you expand your business? Could you have expanded it faster using credit? I know I did, I turned a business that had one client paying $4200 a week into doubling my revenue in 1 year, and was at the million in sales by year two... The hardest hit I will explain, but I paid that off in under 5 months...

I have bought equipment and licenses with credit cards on NET 15 POs from clients, and made very good money, when they could have bought directly from vendors or other resellers. I have been burnt one time for $35,000 when the company was forced closed the day after they took delivery from UPS, I lost the equipment to the Bankruptcy Courts, the credit rating of the company was A-, no signs of this potential risk... But I also took a $35,000+ write off on taxes too.

I will say, with the credit crunch and much lower margins of 5% or less now, I have gotten out of it, but I also have shifted my business to managed services and online backups instead of project work....

But let me ask you, if you had this opportunity would you jump on it?
Email system integration for a financial firm. $300,000 for hardware and software, your profit on the hardware and software sale alone is $45,000 
Your implementation fees will be $45,000 - your doing all the work, so that is pure profit...
If you don't provide the hardware and software licenses, another firm will get the deal...
So in 1 month, you could make $90,000 would you do it or would you pass on it because you don't have $300,000 in the bank. 
Let me further qualify it with, you have been doing other work for this client for 3 months billing $4200 every week, you have received checks every 15 days (not business days, but 15 regular days from invoice)... 
Their credit score is A+ with a bank letter shows operations account has $22,000,000... 
You also have a signed contract guaranteeing you $4200 a week in consulting fees for the next 3 years just to manage their network.

Would you turn down an extra $90,000 in profits - from a client that is going to pay you $655,000+ over a 3 year period???


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## BillS

Tweto said:


> BillS said:
> 
> 
> 
> I think $18,000 is way too much to spend on a vehicle given what you make.
> It would make a lot more sense to buy a car instead of a truck because they're a lot cheaper. I'd look for a low mileage car for about $5,000. The last car we bought was a 1995 Buick Century that had 55,000 miles and cost $2,000 in 2010.
> 
> I have to disagree a little. If I could have only one vehicle I would have a truck. You can buy trucks for the same price as a car and the truck has ways to pay for itself. It maybe because of where I live or the way I live but life would be very difficult without a truck.
> 
> 
> 
> I went to cars.com. Put in $5000, 70,000 miles, and my zip code. Got 10 cars for every truck and I bet half the trucks that were listed had those miles on a rebuilt engine. You can buy a cheap reliable car for $2000 if you're willing to check Craigslist enough times. I don't see how you buy a truck for that. At cars.com they had a 1996 Cutlass Ciera wagon with a 6 cylinder engine and 33,000 for $5,000. That's the kind of car I'd buy if I needed one tomorrow.
Click to expand...


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## Tweto

BillS said:


> Tweto said:
> 
> 
> 
> I went to cars.com. Put in $5000, 70,000 miles, and my zip code. Got 10 cars for every truck and I bet half the trucks that were listed had those miles on a rebuilt engine. You can buy a cheap reliable car for $2000 if you're willing to check Craigslist enough times. I don't see how you buy a truck for that. At cars.com they had a 1996 Cutlass Ciera wagon with a 6 cylinder engine and 33,000 for $5,000. That's the kind of car I'd buy if I needed one tomorrow.
> 
> 
> 
> Did you think that maybe there are 10 cars for every truck on the road or the more realistic possibility that the people that own trucks don't sell trucks but they do sell cars. I have 2 trucks and 2 cars, if I had to sell something it would not be ether of the trucks. And you would just be guessing about the rebuilt engines on the trucks.
> 
> That Ciera sounds like a good deal and I would buy it if I was looking for a car, but I'm not, but I'm really actively looking for another truck (my third).
> 
> Some people are car people and some people are truck people, that's just the way it is.
Click to expand...


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## machinist

invision,

I understand double entry bookkeeping, but that doesn't make it any better for me. True, they loan out money to make an income, but I personally don't care if a banker ever makes a dime. The world got along just fine before bankers existed. I think that if they exist at all, it should be as a regulated public utility, like electricity, water, and sewage. Try to get your head around the idea that banks are unnecessary. They are like lawyers. If lawyers did not exist to sue people, NOBODY would NEED a lawyer, so there would be no reason for them to exist at all. Likewise, if banks did not exist, nobody would need a bank. The only need for banks is because they are already there, so to do business, some minimal banking is required for that at present. 

The reason that banks DO exist, is because being a banker is a license to steal, via usury, compound interest, and in the case of the central banks, legal counterfeiting by "loaning money into existence". What a scam. And most everybody falls for it. 

I turned down a lot of business in the past that would have theoretically made me a lot of money, but it would have required me to get on that credit horse and ride it to death. No thanks. I did just fine without that. So, to answer the question, yes, I would and have turned down that sort of thing. I spent too many years on the other end of things buying services for major corporations. I know how they treat vendors. I never wanted to play in that game. If that suits you, go for it. 

My life got a lot better when I left behind the pursuit of big money and all the misery that goes with that. I found that possessions owned ME, instead of the other way around. I was working away to support my possessions, instead of living a real life. But, that makes no sense to anyone who is caught up in that consumer scene, and I understand that. Selling off the big house and moving to a small farm made our lives a lot more rewarding, and we got the rewards instead of bankers and other business people. We learned the difference between the pursuit of money, and the pursuit of happiness.


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## hiwall

Since 1999/2000 banks can take depositors money and use it to buy stocks or anything else they want to buy. As soon as they let banks play with stocks we started having bank problems again(just like in the early 1930's).


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## BlueShoe

Twenty-three and almost no bills with cash in the bank is nearly unheard of. I would advise not spending it on a truck when you get done. It's just a money loss. Cars mean more to 25 yr olds than 35 yr olds. In that 10 yrs a newer truck will need replaced. Land will be worth more and cost more. And buying undeveloped land is going to be HARD without credit. It's harder than buying a home WITH credit. You need a lot more down payment. I'd buy a $5000 vehicle that looks great and go for land with the rest.

Dave Ramsey doesn't have the will power to deal with credit cards. Lots of people don't and you _are_ dealing with snakes when you do, that is no lie. But they got in his life and the collectors bruised his ego by insulting him to his wife on the phone when he defaulted on his responsibility. Dave is a head case, full of Pride of Life, but I agree with some of his approach. I don't follow all his advice. I have CC debt now.

Clark Howard is a better model to live by. Dave can tell you how to get out of debt his way. I did it a different way using credit cards in my 30s. I surfed balances to zero percent cards instead of concentrating on the smallest balances 1st. I even surfed the balance of my first house to that card...doing things he tells you never to do, just because he assumes you don't have the will power because he didn't (generally he's right). I was paying 8% on the house, and had a small balance on another card. I was offered no trans fees and no interest for over a yr on a 2nd card with a high balance, so I moved the house and CC balance to the promotional rate card and never looked back. I didn't get it paid off by the end date, but another card offered the same deal before that ended so I sent it all to that one without paying any "stupid tax". I didn't cut up my cards either. I just left them open with small purchases from time to time paid off immediately. That helped later when it came time for other major purchases.

With open, active credit accounts, paid off house, paid off vehicles (Fifteen hundred dollar cash car and a $12K truck loan paid off) I lost my job due to down sizing. What happened a few yrs after losing the job? I got approved for a Home Equity loan and bought a 2nd house with it then another $12K truck loan to use to remodel the house with while I had no job. My credit report said NONE on the OCCUPATION line when pulled by the dealership and bank.


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## machinist

tenOC, 

+1! Yes, you can use their own games against them and make money. It has its' risks, but most of that is your own discipline to make it work, as you said. 

Our credit rating is probably crap now, now having used any for ages. But, we keep getting those CC offers in the mail from everyone. I use them to start fires in the shop wood stove. We still have open credit lines with all the vendors we used in business, although we never use them.


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## BillM

I have two credit cards with a zero balance on each of them. I use one of them to pay for almost all our usual monthly purchases ,(fuel, groceries , recreation and repairs).

The other one is used for a couple of automatic expense deductions each month.

They both pay points that are redeemed quarterly as long as they are paid in full within 30 days with no balance owed.

Since we have no debt, I just use my internet banking service and pay them off weekly.

I have never paid a penny in interest on either credit card while enjoying the convenience of using them and not having to carry large sums of cash.

My credit score is 873 largely due to having them so if I needed to borrow , I could.

Every quarter, the credit card company sends me a check for around $120.00 for the points I accrue from using their card and paying off the balance within 30 days of each purchase.

Here is the good part.

Do you know what the credit card providers call people,who use their services and never pay interest or carry a balance ?

Deadbeats !


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## VoorTrekker

Cabowabo said:


> ...The only card I have is a debit card, and a travel card for my job. I never want a credit card in my name. I see my friends burdened with car and truck payments and other loans. They just look like slaves to the bank...


Go to the PX Clothing and Sales and get a Military Star Card for Clothing and Sales Issue Items. It works like a credit card, except NO interest. It will establish a credit rating, I have maxed out my card and as a SSG I pay a whopping $60 a month, as a SGT I paid $24 a month and as a SPEC I paid $12 a month, interest free.

It is on my credit report as revolving credit no discrepancies. I abhor the need for credit cards and debt for employment and purchasing permission. (Mark of the Beast?) People with no debt are punished for having good financial discipline and moral ethics.

(Of course, Invision will troll this, multiple degrees financier and poor grammar.) PS, it's those PhD economists who screwed up our country!


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## BlueShoe

The highest credit score possible is 850 isn't it? You probably meant 773? There are people who've tried to get to 850, but I've never heard of it happening no matter what they try.


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## Tweto

BillM said:


> .
> 
> My credit score is 873


The highest FICO score possible is 850. TenOC could be right, you mean 773.

BTW I have always gotten 3 FICO scores, one from each of the credit companies.


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## BillM

*I was wrong*



Tweto said:


> The highest FICO score possible is 850. TenOC could be right, you mean 773.
> 
> BTW I have always gotten 3 FICO scores, one from each of the credit companies.


I looked it up in my files it was 809 according to Equifax in 2012.

Where I got the other number , I don't know but that was what was stuck in my head .

:dunno:


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## invision

VoorTrekker said:


> Go to the PX Clothing and Sales and get a Military Star Card for Clothing and Sales Issue Items. It works like a credit card, except NO interest. It will establish a credit rating, I have maxed out my card and as a SSG I pay a whopping $60 a month, as a SGT I paid $24 a month and as a SPEC I paid $12 a month, interest free.
> 
> It is on my credit report as revolving credit no discrepancies. I abhor the need for credit cards and debt for employment and purchasing permission. (Mark of the Beast?) People with no debt are punished for having good financial discipline and moral ethics.
> 
> (Of course, Invision will troll this, multiple degrees financier and poor grammar.) PS, it's those PhD economists who screwed up our country!


How would I troll it?? First, I can't spell worth a damn myself, second I quit college a few times never finishing 3 degrees, third that card you are using is helping to create a credit report for you - which in 'today's world' is a must have, Forth - it is great advice, that I not serving in the military did not know it existed, so it is a fabulous concept and advice...

:scratch

BTW - Thank you for serving our country...


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## invision

BillM said:


> Here is the good part.
> 
> Do you know what the credit card providers call people,who use their services and never pay interest or carry a balance ?
> 
> Deadbeats !


Now I can believe that... I mean they are in business to make money, and you, me, and those who have them but have zero debt are their worst nightmare... Except they do make money from the merchants that use them... Last time I looked AMEX was the worst - 5% of purchase... So they get to double dip... Personally, that is why I have never ever accepted credit card payments for any of my businesses that I have owned over the years... Not going to pay them a % of the sales... hard enough to have margins on physical inventory sometimes.


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## BlueShoe

Yrs back I had one higher. I'm sure it's not like that anymore. I was told that having a high limit with little owed is a good way to run the score up high.


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## Seneschal

I've read the entire thread, and I have to say, some of the vehement hatred for credit cards or loans or debt of any kind was shocking. A lot of it seems extreme to me.

By no means am I an expert, and I know I dont post much on here (I'm a notorious lurker, usually not even logged in) but nevertheless, I feel that taking such an extreme stance on debt and credit can only be to your detriment. It's been said on this thread before, but I'll go ahead and add to the refrain.

I am 24 years old as of last month. This is my second year of working full-time (I did the college thing.) and in january, I got my first credit card and began paying back my 18k in government student loans. 

What I'm about to say may shock some of you, so read at your own peril. 

Every purchase I make, with the sole exceptions of my bills, goes on my credit card.

Gasp! Horror! Only, not really.

I make triple payments on my student loans, but more importantly, I treat my credit card the way I would cash. I never buy anything unless I have the cash laying around to cover it same day. My limit is in the 5 digits, and I have never come close to maxing it...I don't need to.

After four months of that, with that as literally my only credit history, when my free car finally hit the point where my mechanic said it wasnt worth fixing, my credit union gave me a loan to buy basically whatever I wanted. I ended up spending less than half what they approved, but my interest rate is excellent.

Four months of credit history, properly managed, had my credit score well into the mid 700's. I've got my loans down to 15k now, and enough in the bank to cover my living expenses, debt and all, for 10 months. 

Long story short--debt is not evil, banks are not out to screw us over, and neither are credit card companies. We do the screwing all by ourselves.


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## haley4217

Seneschal said:


> I've read the entire thread, and I have to say, some of the vehement hatred for credit cards or loans or debt of any kind was shocking. A lot of it seems extreme to me.


First off let me say that I am proud that you're taking this kind of approach toward credit, debt and credit cards. I believe that we (America) would be in a much better place if more people were to be responsible with debt, credit and finances. (NSA keywords here so that maybe the government will read these posts "tea party" "conservative" "Ted Cruz" "Rand Paul")

I believe like you that credit and credit cards are something that responsible people can use today, as long as they pay attention to what they are doing and don't live beyond their means. I take advantage of offers and will finance something from time to time, but only if they are offering 0% and only if I'm not paying for the carrying costs somewhere else. In other words, I ask what's it going to cost me if I pay cash and what's it going to cost me if I finance it. I also use credit cards to pay for day to day expenses like gas or other purchases but not for going into the store to buy a bottle of soda or for a meal at a restaurant. Then the credit card is paid in full when the statement comes at the end of the month. I let the credit card companies do my accounting for me so that I can download my expenditures into Quicken and know where the money is going. Only thing that I have to input is cash expenditures.

Finally, depending on the credit card company, I only use a card that gives me some sort of credit or payback for using the card. But, you've got to look very closely at the terms and make sure that you're not paying for it in some other fee. Of course the merchant is having to pay for your use of the credit card, but with the exception of a few gas stations I don't find merchants offering me a discount for using cash instead of credit cards.

Like it has been said in other posts the proper use of credit and credit cards does help to keep a good credit rating record which is critical today if you do want to get a home mortgage or a car loan. I even had an insurance company check my credit score when I bought life insurance recently.


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## BlueShoe

Thank you for your perspective and experience....and posting here, Seneschal. :beercheer: Credit is a tool, and it sounds like you've learned that. But big bank credit cards are most definitely evil. The reasons go well beyond just them helping you with some money. Big banks are evil to the core. That's just their nature and has been proven beyond a shadow of a doubt in your adult lifetime.

Just this past week BOA has been exposed as intentionally causing borrowers to lose their homes and assets so they could profit exorbitantly. All the major banks in the West have been conspiring to defraud the population by violating laws. And they've been doing it for decades. 

I play their game and am not 'holier than'. I've always handled my debt in a manner Americans would call "responsibly", but in reality and more stringently, 'Biblically' it was/is not responsible. The American way is to decide if you can make the payment. To me that doesn't mean a person can afford it. If you don't pay your auto insurance in a 6 month lump, you need a paid for car. If a person can, he still might not be able to "afford" a car payment. Not talking about businesses.

In my 20s I had to have a car payment. My current daily driver is 15 yrs old and 240k miles. This month the AC just took a down turn (probably a $400 repair). Since fall the left front wheel pops and bangs when turning left to where people turn to see what's falling off of it as I drive by (probably a $250 repair, but two shops didn't nail down the issue). Since the fall the paint is failing by flaking off in a couple of places. No rust or dents (paint is a "forget about it" cost). The vehicle WON'T have any of these repairs done by me. I only paid $500 for it when I bought it, then drove it home (no reverse, 2nd or 4th gear), paid $1100 for a new trans and then a battery and it's been a perfectly presentable vehicle until late last year. I've driven it for work mileage and it's paid for itself several times over. I'm not looking forward to a car payment car. If it's not a Tesla model S or a 2006 Ford GT (not the Mustang), then a car payment is a waste of money to me. I'd rather find another cash vehicle.

I'll go long on payment for something where most people won't feel comfortable, so I'm not cheap there. I'll use a credit card to buy 3 high priced items at a good bulk price to sell two of them, effectively lowering the 1 item price. But I also always look at my assets and how quickly I could get out of it if I lost my income for a year. For me, cars are a deep passion, but new cars are a waste.


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## Cabowabo

Since I'm the person with the most extreme view point on money I guess I should say something. Me and you are pretty much the same age. I did college for two years, and then left and joined the military. 
My financial picture is simple. I have 20K in the bank in my checking account for a car and a few other things. $7K in non retirement, $6K in retirement, and my GI Bill is worth $50K roughly when I separate. I make on average $1800 a month with no real bills and can save an easy $1000 a month. I've been so fed up with my job I've considered voluntary separation and walking away from the military with full benefits and no bills. I can even consider it because I am this extreme with my money.
I have a friend who is also roughly my age. He bought a brand new car and financed a big piece of his car. He was forced to reenlist in the military, even though he hates his life and is miserable to pay a car payment on a car he doesn't even like anymore. 

My personal view point on money and debt. Is if it isn't going up in value generally (Cars, Boats, TV's, Random Junk) then pay in cash. If it does go up in Value (House, Land), put a significant down payment down on it and pay it off as soon as possible. Why should I let Cars, and random Junk put on a Master Card (great name btw) decide my future? 

Extreme? Egh Maybe. But 100% of Cars that get repossessed have a note on them. The biggest cause of Divorce is Money Fights and Money Problems. With all the extra stress in life why add more? And I didn't just come up with my view point on my own. 
Some good Books to read
Stop Acting Rich and Start living like a real Millionaire by Thomas J. Stanley
How to Ruin your Financial Life by Ben Stein
The Money Answer Book by Dave Ramsey
Use the News by Maria Bartiromo
Again if it works for you Great. But it works for me, and I enjoy having control over my money.

.02


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## invision

Cabowabo said:


> Since I'm the person with the most extreme view point on money I guess I should say something. Me and you are pretty much the same age. I did college for two years, and then left and joined the military.
> My financial picture is simple. I have 20K in the bank in my checking account for a car and a few other things. $7K in non retirement, $6K in retirement, and my GI Bill is worth $50K roughly when I separate. I make on average $1800 a month with no real bills and can save an easy $1000 a month. I've been so fed up with my job I've considered voluntary separation and walking away from the military with full benefits and no bills. I can even consider it because I am this extreme with my money.
> I have a friend who is also roughly my age. He bought a brand new car and financed a big piece of his car. He was forced to reenlist in the military, even though he hates his life and is miserable to pay a car payment on a car he doesn't even like anymore.
> 
> My personal view point on money and debt. Is if it isn't going up in value generally (Cars, Boats, TV's, Random Junk) then pay in cash. If it does go up in Value (House, Land), put a significant down payment down on it and pay it off as soon as possible. Why should I let Cars, and random Junk put on a Master Card (great name btw) decide my future?
> 
> Extreme? Egh Maybe. But 100% of Cars that get repossessed have a note on them. The biggest cause of Divorce is Money Fights and Money Problems. With all the extra stress in life why add more? And I didn't just come up with my view point on my own.
> Some good Books to read
> Stop Acting Rich and Start living like a real Millionaire by Thomas J. Stanley
> How to Ruin your Financial Life by Ben Stein
> The Money Answer Book by Dave Ramsey
> Use the News by Maria Bartiromo
> Again if it works for you Great. But it works for me, and I enjoy having control over my money.
> 
> .02


I wouldn't quit and walking until you have the full benefits that were offered during your time actively serving.

I think once you get out, you will find a much different life... What you have saved up is very commendable, but your also not being smart with your money - it is sitting in a bank, you should just keep it in a jar cause it isn't doing anything for you while it is sitting there... Even 1.5% in a CD is better than 0%. Also, right now in your life will be much differently once you are out. Right now you have room and board - except when you decide to eat off base or at the on base restaurants like Burger King. You don't have, electric, gas, water, trash bills, insurance, and rent... You don't have to worry about buying a couch, chairs, dining room, pots pans dishes, a bed, etc... Things will change drastically once you are out. Also with only 2 yrs of college - were the grades good enough to go back to finish the degree or will you start all over or just go get a job?

As for the books, yes there are many out there like that and there are just as many that tell you what a lot of us have been saying - you control the credit not let the cards control you...

My best and thank you again for serving our country...


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