

Behaviors That Destroy Your Financial Health - nskbelanger
http://blog.movenbank.com/post/40762161993/wake-up-financial-health

======
jiggy2011
Best way to save money I find is to just be an antisocial hermit. Where I'm
from socialising is basically synonymous with "getting drunk".

This can not only be expensive in itself but alcohol has a profound effect on
your ability to make sound financial judgements.

Once you've factored in a few rounds at trendy bars, taxis , takeaway or a
restaurant curry and maybe a club cover charge; "A few drinks after work" has
turned into a £100 hole in your monthly balance sheet.

Though for a few people I know "addiction to Apple products" is becoming a
close 2nd.

~~~
randomdata
You need to have some fun once in a while. If that is what you like to do for
fun, £100 per month for entertainment doesn't seem unreasonable on even some
of the smallest of budgets.

~~~
jiggy2011
For sure, of course the problem comes when you have several separate groups of
friends and it becomes more than once a month.

------
mfringel
"Pay yourself first."

I've been able to save a rather impressive amount of money by just diverting a
portion of my paycheck to an investment account. I never see the money in my
checking account, so I never have the money to spend.

Paying yourself out of available funds is hard; there's always something else
you could be spending the money on, and it requires a conscious choice and
willpower.

By contrast, paying yourself before the money even turns into available funds
is easy because there's no choice involved except initial setup.

------
npsimons
If you are intrigued by the thought of changing your financial behavior, I can
heartily recommend the following as followups to this article:

1) "Your Money or Your Life" ([http://www.amazon.com/Your-Money-Life-
Transforming-Relations...](http://www.amazon.com/Your-Money-Life-Transforming-
Relationship/dp/0143115766/ref=sr_1_1?ie=UTF8&qid=1358436317&sr=8-1&keywords=Your+Money+or+Your+Life))
- Don't recall if this was mentioned in any of the recommended book threads,
but it's definitely a good one. Gets you thinking about what your job really
costs and what your time is worth to you.

2) <http://www.mrmoneymustache.com/> \- Truly rethink the value proposition
of, well, just about everything in your life. Did you know you can afford
another $15,900 worth of house for every mile you live closer to work?

------
jdludlow
"Rich people tend to buy things that appreciate in value. Poor people tend to
buy things that depreciate in value".

Obviously not a universal truth, but applied to money and/or time it's
something that I try to keep in the back of my mind.

~~~
abstractbill
It sounds useful when you phrase it that way, but a little less so if you
rephrase it like this:

"Everyone buys things that depreciate in value. Rich people can also afford to
buy some things that appreciate in value."

------
jilebedev
Can HNers recommend a good personal finance management software solution? I'd
like something that connects to my bank account and allows me to keep track of
incoming vs outgoing money. Ideally, I'd like to tag every outgoing dollar as
belonging to one of several labels, things like "groceries", "rent", etc. I'm
sure something like this must exist - anyone have a decent recommendation?

~~~
j_s
I was curious when I saw this on Steam recently:

You Need A Budget 4

<http://store.steampowered.com/app/227320/>

~~~
bentcorner
I would recommend against buying this on steam. Buy it direct from the
developers, it's DRM free. Yes, updates, blah blah blah, but launching steam
is physically painful. You don't want that in the way of working on your
budget.

<http://www.youneedabudget.com/>

Plus, you get a 34-day free trial. (I don't know if you can get that on
steam).

------
marknutter
I've been reading a book called The Millionaire Next Door
([http://www.amazon.com/The-Millionaire-Next-Door-
ebook/dp/B00...](http://www.amazon.com/The-Millionaire-Next-Door-
ebook/dp/B004DNWPY4/ref=tmm_kin_title_0)) and it talks about how people get
rich and stay rich, and it has more to do with not-spending money than it does
making lots of money.

------
rayiner
This is a good article. One thing I've noticed is that ever since I started
eating all my meals at the office cafeteria (not free, but sold at cost), my
meal expenses have fallen by a factor of five. Especially in NYC it's very
easy to blow $100 on dinner and $1000+ a month on eating out, without even
going anywhere particularly fancy.

~~~
snogglethorpe
Obviously it's good to have some sense of how much such things cost over time,
but if you have to worry about small pleasures like a daily cup of coffee,
you're in pretty dire straits... and I know that when I've so poor, I had _no
problem_ realizing how things add up, because it was smacking me in the face
constantly...

This, incidentally is one reason I like cash (over debit cards or whatever). I
like to palpably _feel_ my money going away if I spend it, and have a physical
sense of how much I have available... it really helps keep me aware of the
flow of money.

~~~
jsmcallister
No matter how much you make, going to Starbucks for a latte every single day
seems innocuous. I get a grande vanilla or a grande gingerbread (during the
holidays). I think it's about $3.75. It becomes a habit, I get one 25 out of
30 days. That's $100 a month, which translates to $1,200 a year which
translates to $7,200 over 5 years - which is more than most people will even
put away into savings over that same time.

------
jsmcallister
THE most important thing to securing your financial health is getting control
of a monthly budget for variable expenses like groceries, lunch, dinner,
Starbucks, drinks, gas, shopping, entertainment, etc. The more-specific the
better. Then work on whittling that budget down or trying to be under as much
as possible.

~~~
cglace
I just did this two weeks ago in mint. It's crazy to see how packing your own
lunch and skipping coffee every morning can add up to hundreds of extra
dollars saved every month.

~~~
pyre

      | skipping coffee every morning
    

You could just invest in a coffee maker / french press. You could still have
you coffee in the morning without the much expense (just the capital
investment in the equipment).

~~~
cglace
Oh I have a coffee maker, espresso maker, French press. It's when you aren't
at home and decide you want a coffee and pay 3-4 dollars.

------
calgaryeng
\- Loss aversion \- Failure to account for inflation in saving & spending
planning \- Lifestyle inflation \- Failure to understand the power of compound
interest \- Failure to understand impact of sunk costs on your potential
financial outcomes

~~~
sk5t
Interest on savings? What is that?

~~~
jpdoctor
Long long ago in a universe not too far away, there used to be interest
awarded on savings.

However, most people didn't realize that the quantity of money was being
increased because they had not figured out the workings of the Federal
Reserve, or what M2 is. Inflation ate away almost all of their interest right
in front of their backs.

------
languagehacker
So basically, spending too much money and not keeping a budget are the two
behaviors discussed here. Thanks for the obscure financial tips, bro.
Definitely wouldn't have heard them any given week on Good Morning America.

------
Kurtz79
If anything, personally I believe I have the opposite disorder (sort of
anorexic behavior as opposed to bulimic behavior, moneywise)...

I'm very conservative on what I spend, often not making a purchase, even if I
could definitely afford it.

~~~
hexis
In this case, the opposite of a disorder sounds more like "order" than another
disorder.

------
rezrovs
The article seemed common sense. I've enjoyed reading the other comments here
more and found the links useful. Does anyone have good reading material on
your long term financial health? (Longer term than budget and save?)

------
seivan
The only thing that hit home was dining out, wether it's an average
restaurant, a cup of coffee or a fancy one.

The rest, I can handle.

------
shanellem
Interesting take on finances. I wouldn't have made the connection between
these disorders and money.

------
heather_anne
I am super guilty of many of these - make more, spend more.

------
ohwp
raise = working less

I went from 40 to 32 hours in the past years on different jobs when I got a
raise. Sometimes I prefer free time over money.

------
michaelochurch
4\. Working for Dogshit Startups.

~~~
jyu
...which is all but a handful.

------
nirvana
Something that had a huge positive impact on me financially was getting
Quicken. Simply tracking my expenses and the flow of money changed the way I
spent.

For one thing, I realized that I wasn't spending too much money eating out (as
I'd thought) and so I ate out more.

A lot of silly / pointless spending just disappeared simply by tracking it.

While quicken sucked, and I eventually stopped using it, the habits I
developed then have remained.

Another thing that helped a lot was paying myself first. I'd have my paycheck
split up on deposit into a savings and checking account. The amount in
checking was the spending for household, and the amount in savings had
specific purposes. Later I had it set up to also automatically move money into
investments.

You get used to just living on the money in your checking account, and the
rest accumulates without any actions.

I've generally lived pretty frugal-- which makes it easier to finance doing a
startup.

But I've never been deprived. I live in "luxury" because I go see a movie in
the theater each week and buy the things that are important to me (and the
stuff that really isn't, I just stopped buying.)

A third thing that really helped was reading personal finance books. I found
them really interesting and easy to read. The millionaire next door, the
wealthy barber, etc. I really liked Timothy' Vicks books on Warren Buffett,
and Buffettology.

These, of course, are the gateway drugs to things like Options as a Strategic
Investment by McMillion -- a thousand pages on options, and I read most of
them!

Ultimately, though, mises.org and "Economics in one lesson" by henry hazlitt
gave me enlightenment. The latter can be downloaded free here:
[http://www.fee.org/library/detail/economics-in-one-lesson-
pd...](http://www.fee.org/library/detail/economics-in-one-lesson-pdf-doc-
audio)

Also, realizing what my "daily latte" was really worth. Not the $5 at
starbucks. Back when I had that habit, it amounted to $5x4 times a week *50
weeks a year = $1,000 in Apple stock bought (When I had the habit in 2007) at
$135/share (Close Jan 2, 2008) is now worth $3,740.

$3,740 in Apple stock now is worth more than the pleasure of 4 lattes a week
back in 2007. I'd make that trade all day long.

~~~
gtt
"Options as a Strategic Investment" is not available at my local library,
could you name some alternatives, please?

------
martinced
A part of the problem is that many consider hedonism / frugality to be the one
true way of life and socialization.

They think that if they don't act like all the others, they'll be socially
rejected. But it ain't so. As long as you have high self-esteem nobody can
make you feel "inferior".

Another part of the problem, and it has been brought up recently, is that most
people cannot really save enough to make a difference. They don't have enough
to really diversify their wealth so they figure out: "oh crap, then I can as
well spend it, it's not going to be worth anything in a few years anyway
because of inflation".

Note that "saving your wealth" and "saving your money" are two entirely
different things. The government is busy confiscating your savings thanks to
inflation.

I'd suggest "acting dead, trading up and living the middle class":

[http://www.ribbonfarm.com/2011/12/08/acting-dead-trading-
up-...](http://www.ribbonfarm.com/2011/12/08/acting-dead-trading-up-and-
leaving-the-middle-class/)

I don't buy all the crap that most people do buy. I do still fork $$$$ for
stuff like an Aeron chair but overall I do save money compared to most because
I don't need many things, neither does my SO (which used to be a high-
maintenance girl but then "saw the light"). But then I don't want the
government to confiscate it. So what do I do?

I buy an old sportcar that I put in a garage (and sometimes take it out for a
spin), I buy physical gold, I diversify paper money over several currencies,
etc.

I do that because I don't have enough to buy cash another property and don't
want to be r _ped in the_ __by taking credits.

But going out paying overpriced drinks with fake friends and going to fancy
restaurant just to say that I go to fancy restaurants? No way. I didn't
regress at the pre-anal stage where I need to fetishize food. And I much
prefer to "impress" people with good looking old exotic cars than with
ephemeral restaurants bills ; )

~~~
veidr
So that's it! I'd been wondering why I spend all that money on great meals...
now I understand it is simply because I regressed at the pre-anal stage where
I need to fetishize food!

~~~
npsimons
GP may be referencing "Prometheus Rising"; interesting read, but not highly
scientific.

------
Buzaga
IMO, this is just generic financial tips, morning news style, mixed with words
like "disorder", "ill" and others so it sounds more impactful.

The definition of manic has nothing to do with this article, for a start...

