Some of you may now feel that it’s you against the financial and marketing world. Good, it is!
Are you a player in the financial game? Like it or not if you live and work in the United States you are a player in the game. The problem is that you may not know the rules.
How do I win the game or at least break even?
If you are in debt, get out of it
Don’t incur late fees
Don’t pay interest
Spend within your limits
Walk away from emotional purchases, cool off, think it over
Save for large purchases
Avoid the “poor man” traps
Don’t bounce checks
Maintain what you already own
Save in your 401K
Don’t collect junk
Don’t make a habit of eating out
Save 3 to 6 months living expenses (cash in a savings account)
Now for some details:
If you are in debt, get out of it
Normal debt is a burden. Overwhelming debt is debilitating. It affects your work, your personal relationships, and your self-esteem.
If you are in overwhelming debt you need to make a plan to get out. Some tips:
Protect your home. Credit card companies and stores will harass you to pay your bills but they will not foreclose on your home. Either stay current on your mortgage or make a deal with the mortgage company to protect your home.
Prioritize your debts and pay the highest interest debts first. Making the minimum payment on all debts may not even touch the principles. On some charge cards the minimum payment does not even cover the interest.
Make a deal with your creditors. Some creditors will freeze the interest if you call them and make a plan on how you will pay them off.
Get help. If you can’t make a plan yourself or make a deal with your creditors get help from a non-profit credit-counseling agency.
If you have debts but they are not controlling your life you should still make a plan to pay them off. Any myths that some types of debt are good are just that, myths.
Don’t incur late fees
Credit cards are very useful tools. They allow you buy online, make plane and hotel reservations, and are very convenient in stores. Platinum cards and other high-grade cards are the best. They usually have no annual fees, insure your purchases against loss and damage, and offer other perks.
You are losing the game if you carry a balance or make late payments. Interest and late fees are a tremendous waste of your hard earned income. Pay your bills early and pay them in full.
Don’t pay interest
If you buy a $300 television from Sears and pay cash you pay $300. If you are sharp you will negotiate with the salesman or wait for a sale and pay less than $300.
If you buy the same $300 television charge it on your Sears card and then make the minimum payment you will pay $600 or more for the same television. If you can afford the minimum payments wouldn’t it be smarter to put them into a bank account or cookie jar until they amounted to $300 and then pay cash?
This is a very simple concept. It ties together “don’t pay interest” and the next three points.
Spend within your limits
If you can’t afford it, don’t buy it. Period. Marketing says “Buy it, you deserve it!”
Good financial management says, “Do you really need it? If you do, save for it.”
Charging something you can’t afford on a credit card and paying interest is ridiculous if you think about it. You can’t afford to pay cash for a $300 television so you then finance it and pay $600. Huh?
Walk away from emotional purchases, cool off, think it over
Shopping is not in itself a financial problem, purchasing is. Do not make emotional purchases! Look at the leather jacket, try it on, appreciate how you look in it, and walk away from it. Go home and think it over. Do I need it? If the answer is yes then ask, “Can I afford it?” If the answer is no, save for it. Pack a lunch instead of eating out. Don’t buy your morning Latte’. Save for it, pay cash.
Save for large purchases
Saving for large purchases such as refrigerators and televisions used to be a common thing. Somewhere along the way they became emotional purchases just like clothing and trinkets. Most people now shop for the TV or computer and then pay for it with a credit card or charge it on store credit. Remember credit cards are not bad if you pay them in full each month and don’t pay other fees.
If you can afford to make $50 - $100 monthly payments, you can afford to save this much each month for a cash purchase. At a $50 per month rate you will save $600 in a year. At $100 per month you save $1200. That will buy most any TV, except the plasma screen, which by the way if you can’t afford it you don’t need it.
One more tip. How much do you spend on the Christmas Holidays? Most families spend in the hundreds if not over $1000. Is this a large purchase? Start saving for it. The holidays are much more enjoyable if you aren’t paying for them (with interest) deep into the New Year. Most banks have very convenient Christmas Clubs that save a set amount each month and disperse the funds around October to November. You can even direct deposit from your paycheck.
Are you a player in the financial game? Like it or not if you live and work in the United States you are a player in the game. The problem is that you may not know the rules.
How do I win the game or at least break even?
If you are in debt, get out of it
Don’t incur late fees
Don’t pay interest
Spend within your limits
Walk away from emotional purchases, cool off, think it over
Save for large purchases
Avoid the “poor man” traps
Don’t bounce checks
Maintain what you already own
Save in your 401K
Don’t collect junk
Don’t make a habit of eating out
Save 3 to 6 months living expenses (cash in a savings account)
Now for some details:
If you are in debt, get out of it
Normal debt is a burden. Overwhelming debt is debilitating. It affects your work, your personal relationships, and your self-esteem.
If you are in overwhelming debt you need to make a plan to get out. Some tips:
Protect your home. Credit card companies and stores will harass you to pay your bills but they will not foreclose on your home. Either stay current on your mortgage or make a deal with the mortgage company to protect your home.
Prioritize your debts and pay the highest interest debts first. Making the minimum payment on all debts may not even touch the principles. On some charge cards the minimum payment does not even cover the interest.
Make a deal with your creditors. Some creditors will freeze the interest if you call them and make a plan on how you will pay them off.
Get help. If you can’t make a plan yourself or make a deal with your creditors get help from a non-profit credit-counseling agency.
If you have debts but they are not controlling your life you should still make a plan to pay them off. Any myths that some types of debt are good are just that, myths.
Don’t incur late fees
Credit cards are very useful tools. They allow you buy online, make plane and hotel reservations, and are very convenient in stores. Platinum cards and other high-grade cards are the best. They usually have no annual fees, insure your purchases against loss and damage, and offer other perks.
You are losing the game if you carry a balance or make late payments. Interest and late fees are a tremendous waste of your hard earned income. Pay your bills early and pay them in full.
Don’t pay interest
If you buy a $300 television from Sears and pay cash you pay $300. If you are sharp you will negotiate with the salesman or wait for a sale and pay less than $300.
If you buy the same $300 television charge it on your Sears card and then make the minimum payment you will pay $600 or more for the same television. If you can afford the minimum payments wouldn’t it be smarter to put them into a bank account or cookie jar until they amounted to $300 and then pay cash?
This is a very simple concept. It ties together “don’t pay interest” and the next three points.
Spend within your limits
If you can’t afford it, don’t buy it. Period. Marketing says “Buy it, you deserve it!”
Good financial management says, “Do you really need it? If you do, save for it.”
Charging something you can’t afford on a credit card and paying interest is ridiculous if you think about it. You can’t afford to pay cash for a $300 television so you then finance it and pay $600. Huh?
Walk away from emotional purchases, cool off, think it over
Shopping is not in itself a financial problem, purchasing is. Do not make emotional purchases! Look at the leather jacket, try it on, appreciate how you look in it, and walk away from it. Go home and think it over. Do I need it? If the answer is yes then ask, “Can I afford it?” If the answer is no, save for it. Pack a lunch instead of eating out. Don’t buy your morning Latte’. Save for it, pay cash.
Save for large purchases
Saving for large purchases such as refrigerators and televisions used to be a common thing. Somewhere along the way they became emotional purchases just like clothing and trinkets. Most people now shop for the TV or computer and then pay for it with a credit card or charge it on store credit. Remember credit cards are not bad if you pay them in full each month and don’t pay other fees.
If you can afford to make $50 - $100 monthly payments, you can afford to save this much each month for a cash purchase. At a $50 per month rate you will save $600 in a year. At $100 per month you save $1200. That will buy most any TV, except the plasma screen, which by the way if you can’t afford it you don’t need it.
One more tip. How much do you spend on the Christmas Holidays? Most families spend in the hundreds if not over $1000. Is this a large purchase? Start saving for it. The holidays are much more enjoyable if you aren’t paying for them (with interest) deep into the New Year. Most banks have very convenient Christmas Clubs that save a set amount each month and disperse the funds around October to November. You can even direct deposit from your paycheck.
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