10 Things Your Parents Didn’t Tell You About Personal Finances

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ten things your parents didn’t tell you about personal finances if you were fortunate your parents set you down at some point and you had the talk no not to talk about sex I talk about personal finances or maybe you were like me and your parents never discussed money with you I guess mine thought I’ve either figured it out on my own or just sort of pick it up by osmosis in any event I finally did learn the important lessons about personal finances but in some cases it was definitely the hard way like the time my wife and I decided to have a home custom built for us when we hardly knew what a mortgage was even if your mother or father did have the talk with you the odds are that there were some things they neglected to tell you that are important and here are 10 of them what being in debt is like indentured servitude if you’re not familiar with the term indentured servitude the online encyclopedia Wikipedia defines it as a voluntary labor system whereby young people paid for their passes to the new world by working for an employer for a certain number of years the reason why debt is like this is basically what you’re doing is sacrificing future earnings working for a credit card company in exchange for instant gratification passage to the new world how do you avoid going into debt it’s pretty simple you have a credit card make sure you pay off your balance on time every month did those store charge cards and an auto loan if you have one I understand that it takes a certain amount of self-discipline to do this but it will pay off a near sad when you’re not sending 20 or 30% of your heart or an income off to a credit card company or companies – if you need to ask your boss for a raise you need a new employer assuming that you come to work every day on time and are good at your job you should earn erase without having to ask for one if you work for a corporation you probably get an annual review accompanied by a raise of some kind if not you’ll be at the mercy of your employer but again if you’re doing a good job you should earn erase without having to pay for one and if you do have to pay for one you might want to think about finding a new employer 3 you can’t manage your money if you don’t track your income and outgo the cornerstone of good money management is to know how much you earn and where your money is going most of us do know how much we earn but if you’re not tracking your spending it’s like playing baseball without keeping score you may believe you’re a hit you could actually be falling further and further in debt there are a number of smartphone apps available today that make tracking spending drop dead simple alternately you can just use a pen in a notepad but what’s ever method you choose it’s important to note all of your expenditures right down to the penny add them up at the end of the month and you’ll then know whether you’re winning or losing if you find that you’re losing or spending more than you earn you will need to find areas where you can cut costs if you would like more information about tracking spending here courtesy of national debt relief is a video that reveals three ways to do this for only suckers play the lottery you’re carrying a boatload of debt don’t think that playing the lottery is your way out a very smart person once said lotteries are for the mathematically challenged we have radio commercials for our state’s lottery that generally ends with words like chances of winning the Powerball lottery are one and twenty five point four million you have a better chance of getting struck by lightning than winning one of those lotteries five shun those credit card convenience checks convenience checks are those that you receive periodically from your credit card company or companies it might seem like a convenient way to get cash but the interest rate on these things are often anything but convenient convenience checks usually come with a fee of 3% or 4% of the amount you’re borrowing plus a very high interest rate most credit card companies charge the same interest rate on a convenience check as cash advances this means the interest on a convenience check could be twice that of purchases six a spreadsheet can help even the most disorganized even if you’re a very disorganized or scatterbrained person a spreadsheet could help you successfully manage your personal finances you could use one to track your spending create and stick to a budget and help you pay off your debts if you don’t have a spreadsheet program such as Excel there are free ones available through openoffice.org Google Docs Kingsoft and a number of other sources while it may take you 30 minutes or an hour to set up a spreadsheet once you’ve done this it probably won’t require more than a few minutes a week to keep your personal finances under control 7 patience is a huge virtue when it comes to saving money undoubtedly heard the old story about The Tortoise and the hare when it comes to saving money the tortoise is clearly the winner and by a wide margin this is due to compounding interest you could put as little as $50 a month in a savings account and end up with several hundreds of thousands of dollars if you’re not familiar with compounding interest it’s basically where you earn interest on interest for example if you put that $50 into a savings account that pays 2% annually you would have six hundred and twelve dollars at the end of the year and one thousand two hundred thirty six dollars at the end of year two or your six hundred twelve dollars plus six hundred dollars plus two percent eight money won’t buy happiness a friend of mine used to say that while money won’t buy happiness it will run a bunch of fun until happiness comes along but that of course isn’t really true either real happiness doesn’t come from having enough money to buy a bunch of stuff nirvana comes from financial freedom you might think that the guy that drives an almost-new Lexus is better off than your friend it drives an old beater but this is often not the case the guy in the Lexus may be up to his bellybutton in debt but the friend and the old beater has more than $100,000 in his 401k if you live prudently and save a good portion of your income the day will come when no man will be your master and you will be financially free which is true happiness 9 not everyone needs a budget we don’t know of a single financial guru that doesn’t preach the importance of having a budget but the truth is that not everyone needs one some people just instinctually know how much they’re spending versus their income and how to keep the former from getting ahead of the ladder you may also not need a budget if your finances are relatively simple 10 frugality is not the be-all and end-all you may have read some of the many articles regarding the importance of living frugally of course living frugal is never a bad idea however for gala tea has its limits you could cut your spinning to the very bone and still not have enough money to create an emergency savings account or to invest the best answer sometimes is finding ways to earn more money for example this might be harsh but you could get a second job our economy is mostly back to what it was before the great recession and there are many companies now hiring part-time employees these jobs generally don’t pay much usually nine dollars ten dollars an hour but 20 hours a week could go a long ways towards blending your savings account or making investments if you need help with credit card debt national debt relief offers a free debt consultation to help with credit card problems call eight eight eight eight six six zero seven seven eight or visit national debt relief comm today

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