Posts Tagged ‘Financial Management’

Better To Not Pay Interest Rates At All

Friday, July 11th, 2014 by

So I got this offer for a credit card today and by the sounds of it I was pre-approved for a $10,000 credit limit. What I found that was kind of amusing was the sales pitch as you can see here to justify the annual fee of the credit card:

interstcardoffer

As stated here “The money saved on the interest charges easily covers the $29 annual fee.” I think the answer to stuff like this should be “no” and “no” some more as in my view if you don’t actually have enough cash to buy the item then you shouldn’t be using a credit card. I suppose this is what people are taught to do with credit cards though where somehow paying interest fees on them is okay and normal.

It did made me wonder why I got this offer though as I don’t think I am a very profitable customer for the banks in this regards since I always pay my credit card statements in full. If anything, I use it to try and get all the benefits out of it that I can with money that I was going to spend anyways. Paying interest rates is not a good idea to use one.

Can Financial Issues Be As Simple As Your Social Circle?

Monday, July 7th, 2014 by

This was kind of interesting as I heard a story where there was a person who was apparently in massive amounts of debt from the usual spending more money than one has scenario. He had an action plan to get out of debt that didn’t have to do so much with budgeting. Instead, it revolved around him making a decision to completely associate himself with different people on a daily basis. This apparently worked for him too.

The concept for this was pretty straight forward as different groups of people have a different idea of entertainment. For example, one group’s idea could be that having a good time means spending like $100 a night at a bar whereas another group may think playing a sport outside is exciting. With this one change he was able to turn things around pretty quickly.

I must admit, this is probably one of those factors that we never want to talk about as it sounds kind of cold and harsh to think of our friends or associates as money drainers huh? I must admit it does have some kind of merit. For example, before I had a person whom I haven’t seen for a very long time come back into my life. He was unemployed and for the most part was getting money from his parents.

It seemed like every time I hung out with him he always wanted to dine out or buy a drink. Just hanging around him for a week made me spend nearly $100 extra as I didn’t want to be impolite at like a restaurant. But that is a simple example of how the people you associate with can definitely influence your financial situation.

I suppose this is something you truly do need to think about if you are in a financial rut. You need to seriously look at what or who is influencing you to spend more money as opposed to making or saving more.

Scaring Kids With Financial Stories

Thursday, May 8th, 2014 by

I had a conversation with a person today where she was telling me how her youngest child was getting into trouble due to the friends he has been hanging out with. For example, he is just a teen and he went to a party where he drank a beer while justifying it because it was only one and everyone else was doing it. Once she found out she tried to scare him by saying all these things that could happen to him if he gets caught in an effort to discourage the habit.

While that is a pretty common tactic for most things when it comes to kids, funny enough I don’t think many people do this with financial issues. For example, when was the last time you heard someone tell a child that if they say spent too much money or recklessly that bad things can happen? Maybe this is one of those things that we don’t hear enough of as a kid to encourage us to be financially responsible at an early age.

I know for myself it wasn’t so much of my parents telling me to be wise with my money as opposed to observing how people can get pretty uptight and stressed by not managing it wisely. So I guess you can say the bad image of what happens when you are not financially secure got stuck in my head at an early age to discourage me from wanting to be crazy or irresponsible with it. I think even as a kid the closest thing to a character that talked about money a lot was the various forms of a Scrooge which was more about a lesson in giving back.

Then again, it must be kind of hard to make something money related that a kid would actually find entertaining and would in-turn learn from it.

Nice To Have Unexpected Income

Saturday, March 15th, 2014 by

I often hear people complain when they have unexpected bills as it often ruins their financial plans for the month. Today for myself I had the opposite issue where I got some unexpected income from one source where it accumulated enough funds to generate a payment. While it doesn’t really make anything different financially for the month, what it made me think of is the confidence boost it gives you where it essentially makes you under budget for the month.

That’s something we all need I think where it’s like a little reward to encourage you to keep being financially responsible. Of course to do this that means you have to be willing to do something extra too even if it means sacrificing some play time to develop what can potentially be a nice source of side income. It may never pan out, but that’s risk one needs to take I say to potentially get the reward.

Spending A Weekly Income In One Day

Sunday, March 2nd, 2014 by

I don’t usually do this very often but today I ended up spending an entire cheque from one source in a day as I decided to invest in some resources to increase my productivity for a project. While it in no way puts me in any financial danger or anything I usually don’t like doing this as I feel it makes it more likely you will become a pay cheque to pay cheque type of person.

Usually the way I discipline myself is that I save up my income and if I am interested in buying something that costs a lot I wait until I save about three times as much as the cost of the item before considering it. That way when I make the purchase there is no way it will create financial stress and at the same time it gives me a grace period to really think if I need it or if there is something better.

In most cases too it’s usually a want as oppose to a mandatory need. In this scenario though for me it simply came down to the time factor where if time equals money then technically I should be saving/making more this way with the investment. Can’t do this too much though.