So recently I switched phone companies for one of my lines and it just so happened that I received a bill from the old provider even though my number is no longer attached to them. I then phoned in to question about it and sure enough it was an error on their part. Their reasoning was that it was a semi automated process and so they didn’t get around to stopping the billing process.

As a result, I had a balance to pay and questioned whether or not that I should pay for it still. The lady mentioned that I would be credited the amount charged in the next month’s billing and so it would be up to me to pay it or not. The thing is though, for these situations I always pay for it anyways and then wait to receive say the credit check.

The reason for this is that if I don’t pay it then I wouldn’t be surprised if they started charging interest on it while only crediting me the amount of the initial bill. Hence, you will have to go in circles again to get it straightened out. Sometimes it is just better to safe than to potentially go through all the hassle when it comes to these types of bills.

I saw a news report the other day about “Generation Y” people and questioning how the economy is going to impact this group of people. There were ordinary people in the interview such as some people living on loans, others getting by, etc. I’m personally a “Generation Y” individual and to me every generation is the same when it comes to one’s financial stability and situation for the most part as the choices you make is why you are where you are.

But like a lot of people, I personally have and like to learn from previous generations and take what I think works and doesn’t. Here are some points that molded my way of thinking about money and finance in life as a result of observing the previous generation and my knowledge at the time:

Getting And Maintaining A Credit Card Was A Foundation of Financial Success

I know most people in my generation are terrified over the credit card as it shouts out debt to them. Like how a lot of young people saw a car as a symbol of “making it” with many saving up to buy one, for me it was building up for the credit card.

When I saw some adults with credit cards and others mentioning that they were denied, at a young age this made me believe that having a credit card was a key separation between people who were very good with money and those that are just average. Therefore, what I learned from the previous generation of people was that getting and establishing that credit card at a young age was very important.

I had no clue about things like credit scores or how the approval processes worked exactly, but one thing I knew I had to do was save money as the main difference I saw was that the people without a credit card seemed to be broke all the time. Of course that’s not always true, but that is was what I saw. At the same time, I heard of people who have had one but because of mismanagement they were no longer eligible to use one. Again, that re-affirmed, my belief that people who had and were able to maintain a credit card were the financially successful ones.

I literally thought it was a grueling process as a result where say the bank will constantly look at how much money you have saved up, scrutinize how much you make, the amount you spend and so fourth. Right at the age of eligibility I applied for one and to me that was the first step to taking care of my finances and to avoid mistakes that previous generations have done.

Planning For Multiple Streams of Income

I also noticed that a lot of people from the previous generation would often complain that at times they don’t have enough money to pay for the bills and would sometimes have to take a second job. For people that were pretty well off financially, it seemed that many never had enough time for their personal life.

Of course you still hear that today too, but because of this I developed the mindset that it is necessary to find ways to generate multiple streams of income at an early age that would give you that extra money that you may need in the future and at the same time not tie you down time wise. Because of this, I was a lot more open minded and curious about alternative forms of revenue. While I am very diligent when it comes to many things before jumping into it, again learning from the previous generation made me more active in finding these opportunities.

Not Borrowing Money To Buy Things You Can’t Afford

I guess one of the last important points I learned from the previous generation is the simple concept where if you can’t afford it borrowing money isn’t the answer. Although, I took this to a bit more extreme than most would where I classified say student loans as bad as well.

Seeing some people talk about how they still struggled to pay off student loans or trying to pay off a bank loan for years well into their late thirties and forties didn’t seem wise to me. This is also why with credit cards I have always maintained the mentality that you should never use it on items that you cannot pay in full cash.

So, those are some of the key points I have learned personally from the previous generations while molding my path in this “Generation Y” era. Although, when you look at the points above I’d say the points can hold true for most generations as it is mostly dependent on what you think will work for your lifestyle.

One remark that I have been hearing a lot lately is how people feel they have been mislead in life to borrow various forms of credit to purchase items and as a result they are in thousands of dollars of debt which seems impossible to pay off. Even on a business side, so many people are saying that they can’t maintain operations as a result of not being able to get enough credit.

Maybe I am one of few that think this way, but to me credit should simply be a form of convenience and not as an integral factor to either purchasing things or operating some kind of business. Similar to a credit card, if I don’t have say $100 in the bank already then I am not going to buy a $100 gizmo with the intentions that I will find a way to bring in that amount by the billing due date.

So just thinking about it, if you had no credit today how would you be? For myself, I know it would be kind of an annoyance such as having to carry money around, but for the most part everything would be pretty normal. While you may be to get things a lot faster by borrowing a lot of money, I usually prefer to have as less liabilities as possible.

I was told of an interesting scenario today where a person originally invested in a condo a few years back and just recently decided to sell it. Turns out, he was able to get almost one million dollars for it. As a result, he then decided to use that money to buy a house worth over one million dollars as it was almost like free money.

The person telling me the story thought that was kind of crazy as she believed if you were that fortunate to sell it for that price you should just find something decent for say $600,000 and then use the rest of the money for other purposes.

I guess a lot of people do this for smaller items as well. For example, let’s say you bought a piece of electronic equipment and for some reason it broke. The company then gave you back the original cost of the item and then some to compensate you for your time. Most people would be inclined to then use all that money to then buy something superior to what they had before as oppose to wanting to save the extra money and get something of an equal value like before.

While in many ways it is simply a preference, I think it is kind of a bad habit that you have to teach yourself not to do. I know for myself I usually perceive free money or ones gained from investments as funds designated to help you earn more money as this is essentially your pool of funds to help further flex your financial stability. Therefore, to me it is almost invisible in regards to spending it as a regular fund.

Like in the case of the condo scenario what I would have done would be say if I originally invested $600,000 then for the house my consideration to buy it would be that $600,000 plus factoring my existing stream of income and savings. The other $400,000 I would try to think of what else I could do with it such as maybe trying to find another good deal on a condo to hopefully repeat the cycle. I personally think it is better then just spending it all.