personal finance

Personal finance

You can take entire courses on personal finances and learning how to budget your money.  The one main point that you need to know and embed in your brain for your entire life is:

Do not spend more than you make!

If you start now when you are young and continue onward while you begin making more money, you will be financially stable.  Most people get into this thought of, “I am making money I deserve to have new things!”  Or they start hearing about the “buy now, pay later” campaign and get into the horrible scheme of credit card debt.  If you learn to put some money away for an emergency savings and then how to budget your money you won’t have to worry about falling victim to that scam.  If you choose to live without all the frivolous things that your friends may be wasting their money on you will be far better off in your future.  It might seem like a punishment, but if you can live like no one else will at this young age, you will live like no one else will as you get into your early twenties.

Avoid any type of purchases that require you to make payments.  If you can pay cash for something up front, you will avoid interest and fees.  When you use a credit card and “borrow” money from the company or pay on a payment plan to another company, you are paying them interest to “use” their money.  How much better to save up and pay cash for the item to avoid any fees.  It is much better to wait four months and save to pay cash for something verses paying for years on a payment plan.

Avoid the statement that you have to build your credit score so you need to take a payment.  That is a myth that you can easily read about online as false.  Companies just want you to pay for years on interest payments when if you just saved up for a year or two you could pay cash for your vehicle and then own it yourself.  The problem with taking a car payment or a payment on an item is that generally you will still be paying for your purchase and the item will be already passed its new stage and in need of repairs.  You will be stuck paying for your monthly payment and paying for repairs. “Cash on the barrel,” is an old phrase that is a good one to live by.

It is not impossible to save up and buy a car.  Buy cheap the first time.  Take care of your car and continue to save the same amount each month.  In a year’s time you can sell your car and then take that money amount and the amount that you have been setting aside and buy a better car.  You can continue to do this and within a few years have a really nice car all paid for.

Look for ways to buy things cheap.  Even though all your friends might be buying things new at the mall, think second hand stores.  You can buy some really great clothing options at a huge fraction of a price compared to store bought prices.

If you have to buy snacks or food, think to buy them in bulk or make your own.  You can buy a large bag of chips and then separate into smaller bags to have individual snack bags at a fraction of the price.

For gifts, think of homemade gift ideas.  If you do an internet search on inexpensive homemade gifts there are tons of great ideas.  There are so many cute ones that people will really enjoy.  Most would appreciate a homemade gift over store bought any day.

Avoid the sales pitch.  Just one television commercial or sales person at the store can make you feel that you “have” to have that product.  Let me tell you that sales people work on commission.  Commission means that they make money based on how many products they sell.  They are going to tell you exactly what you want to hear, thus they will make money.  Here are some tips to advertising advice:

  • Decide what you need yourself by listening to what the advertiser is saying. Make a list of other things you could buy with the same money.
  • Compare products. Don’t just buy what is advertised.
  • Shop around. Don’t just go where the commercials tell you.
  • Go for quality. Make sure that the product lives up to the advertiser’s claims. I like to think for most things—buy once and pay a little bit more money verses paying less and buying multiple times due to it not lasting.
  • Look past the appeal of looking good or cool. Ask yourself what the product can really do for you.