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Worried About Your Money?

October 8, 2008

USA Today had an article that summarized the results from the American Pyschological Associations latest survey.  Americans are more worried about their money now than they were 5 months ago.  What a shock.  We are more worried and stressed about food, housing, health care and transportation than we have ever been.  So what are we to do?  A few weeks ago, as the infamous Government Bailout was building steam, I was surfing some of my favorite personal finance blogs.  I came across this short video at “I Will Teach You To Be Rich”.  It’s only about 3 minutes long and worth viewing.

So Ramit Sethi’s response is SAVE YOUR MONEY!

Mark Cuban, owner of the Dallas Mavericks, in his blog about “How To Get Rich” also says to save your money.

Save your money. Save as much money as you possibly can. Every penny you can. Instead of coffee, drink water. Instead of going to McDonalds, eat Mac and Cheese. Cut up your credit cards. If you use a credit card, you dont want to be rich. The first step to getting rich, requires discipline. If you really want to be rich, you need to find the discipline, can you ?

So are these people right?  I think they are.  In the past three years my wife and I have cut up our credit cards, made a budget, worked on paying down debt and saved some money.  We still have a few years to go before we finish paying off all our debt but you know what – we aren’t as stressed about money any more.  What financial author and speaker Dave Ramsey proclaims is right – Act Your Wage! Living on less than you earn is a lot less stressful than living on more than you take in.  Just a thought.

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4 Comments leave one →
  1. October 8, 2008 11:06 pm

    “Save your money. Save as much money as you possibly can.”
    This will only work if no one else does it. If everyone does, then we will have a depression. No one buying = a spiraling recession that turns into a depression. The solution is for people to spend, but not go into debt to do so.

    Joe

  2. Todd permalink*
    October 9, 2008 8:25 am

    Interesting point Joe. I think since the USA has one of the lowest personal savings rates in the world, the possibility of no one buying anything and everyone saving all their money is pretty slim. I think the main point is to save some and spend less then you make – which would hopefully go along with your comment about spending but not going into debt to do it.

  3. Bob permalink
    October 9, 2008 7:59 pm

    Interesting video, Todd. Most of it is ordinary common cents (pun intended). I take Ramit Sethi’s point to heart that we’re better off when we spend less than we earn. Like you, we’re working on spending less and saving more. I should have started saving in my early 20s when I knew it all. But I didn’t. Anyway, I think his discussion of misjudging risk is understated. Consider that the DJIA (i.e. the market) is down nearly 40% year-to-date. Does one risk putting a 401 (which to greater or lesser degrees is tied directly to the market) into some “cash” account to ride out these economic times and potentially miss out on any gains should the market suddenly turn around? Or, does one misjudge the risk of leaving a 401 as it is and continue to watch its value drop? There is significant risk either way.

  4. February 12, 2009 4:27 pm

    Hey guys,

    I’m actually working with Ramit Sethi of iwillteachyoutoberich.com and he pointed me to this post.

    Couple of things I wanted to ask you:

    1. Ramit just put out a private video on automating your finances and we wanted to send it to you as a thank-you.
    2. His new book is coming out, and we are inviting folks to pre-order the book (it’s about $10) in the next few days. They will get 6 chapters by PDF before anyone else, plus entry into a private community with premium content. Can I send you some more info and the link to the video? If yes, please drop me a line as soon as possible — jms (at) jannamarlies (dot) com. Thanks!…jms

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