TEN RULES OF MONEY
The object of the following is to;
1.Help get you out of debt.
2.Have a $100.00 in hand emergency fund.
3.Build at least a $1,000. savings account.
First off I want to explain a few things. This is NOT an article on stocks, bonds, real estate, investing (with the exception of a money market account) or any of it's kin.
Nor am I a 'professional' in economics. Other than having spent over 60 years trying to make ends meet when it seemed the ends kept getting further and further apart.
Which is why if you are looking for a get rich quick (or slow) scheme here. Not happening. This is just a workable way to get out of debt and start having money for you and not your creditors by using a few simple to explain, sometimes not that easy to do, things. Probably even stuff you have been told before but either didn't want to do or didn't believe could be done. If you still feel that way, trust me this won't work for you either.
If you are already rich you probably already do all this anyway plus the investing and other methods of getting great wealth that the wealthy do. If you are without ANY income at all, homeless checking for work at the library computer then this won't work for you either, sadly. But if times should change for the better for you with Saint Martha's help, or without, then the information is here for you as well.
This is for the ever shrinking middle class like me who needs to have the money they already have stretch a little beyond the ever expanding month.
It is a sad fact of life when you have to agree with the government when you are told the gap between the haves and the have-nots is expanding. There isn't anything any of us can do about that either. So we must as individuals just try to keep our own houses in order. By trial and error and a little common sense that is what I have learned to do.
Truth be known if I had wanted to take on the responsibility of having more money than I could spend and becoming it's keeper instead of me being it's I probably could have become richer. I just wasn't so inclined. You might be. If so you can use this as a foundation. Keep moving on up. There are an absolute ton of How-To books on the market that can get you from here to there for any one willing to make the journey.
Okay, for starters I need for you to do 3 things. It's alright, I will still be here when you get back.
I need for you to get a spiral notebook, a pen or pencil to write in it with and either a large wide mouthed jug (a milk jug with the top cut off is perfect) or a large coffee can with a lid you can cut a slit in. Then next time you go to the bank get some coin rollers. Anything large enough to drop change in will do.
So let's begin.........at the beginning shall we?
The First Rule of Money;
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You just can't spend more than you make. Period.
So your first order of business is to sit down with a legal pad or notebook and pen and start adding up what you owe. Who you owe it to. And why.
Now. You are going to have to start trimming the fat. Go out a lot? Don't. Probably not good for you anyway. Did you know peanut butter is one of the healthiest foods there is? Yeah, surprised me too. Sometimes just changing your eating habits can save you a bundle.
Does this mean you can't EVER go out? No, It means if you are spending money you don't have cash in hand and charging it to an already over burdened credit card then you eat in until you have cash in hand to pay for a night out, cash money.
Can't cook? Get a cook book. Many a thrift store sells them from a dime to a dollar. They even sell pots and pans. Who knew? Just be sure and pay cash for it :D Fresh food and veggies are better for your health anyway. So you are getting better food for less money by eating at home.
In fact that thrift store you are going to be donating your used stuff to is a real good place to get actual useful stuff for bargain prices. Some new still with the tags on.
One of those folks who wouldn't dream of buying second hand goods? Get over it. At this point you have to remember that is probably what got you in debt in the first place.
Now about those cell phones. I am going to surprise you here. I have one. I don't ever have it turned on unless I need to call for help and nobody but my husband and my best friend have the number. I also have the car kit with the cigarette lighter adapter and headset.
My husband is Bi-Polar and we do a lot of traveling to get to his doctor. One of those trips our car caught on fire. We didn't have a cell phone so we just had to sit and watch it burn. We got a phone the next day and never travel without it. The FREE eXcess search feature access gives us weather reports in winter to see what roads are clear and which aren't. We have spent many a night in a motel in route because of closed roads. Worth it's weight in gold that little phone.
That being said. You don't need more than one and life goes on if you have actually answer your home phone. No the kids don't need cell phones to call their friends. �But everybody else has one.� Isn't a
good excuse. They aren't paying the phone bill you can't afford. You are.
Second Rule of Money;
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Don't spend money you don't have to buy things you don't need.
Many people who use 'plastic' don't see the card as 'real' money at the time they are using it. Then the bills come in. When the day comes you are using one card to pay the other then that's the day you know you are in real trouble.
You only need one credit card and then only in emergencies. And no I don't mean a sale at the mall. A sick kid and NOW and payday is still a week away emergency type thing.
So pick the card with the lowest interest rate and put a sticky note on it �For Emergencies Only� and put it where you can get it if you need it. Otherwise spend cash money only. If you don't have the cash then you can't afford it. Period.
With the rest pick a day when you have time and figure out just how much you owe on each and the interest rate. Start paying off with every penny you can scrape together the card with the lowest amount charged on it while making the minimum payments on the others. If you are having trouble even doing that CALL the companies, explain the problem and ask for a reduction in the interest rate and possibly a cut in payment amounts.
Another thing you can do if they won't work with you is start credit card shopping. Yeah, that's what I said. Many card companies want your business and are willing to give either a low interest rate or no interest rate for a limited period if you transfer balances from your old cards. Do it. Then close out the old cards once paid. DO NOT CHARGE ANYTHING ON THE NEW CARDS!!!!!! The minute you do the rules change.
Start paying off the card with the lowest amount due on it. When it is paid cancel it and cut it up and chuck it in the trash. Move up to the next one and add the amount you have been paying on the one now paid off to this one while still making either the minimum amounts on the old cards or the updated lower interest ones. I can not tell you the feeling you will get when you chuck that first paid in full card in the trash but believe me it's a good one. If you strike it lucky and can move ALL your old balances onto one low interest or no interest card, more the better. Pay every dime you can lay hands on to pay on it. I am talking, income tax refunds, money from yard sales, EVERYTHING!
It took us over 7 years to pay off the over $30,000. in doctor bills when my retina detached. But we did it. If we can. You can.
Third Rule of Money;
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Every time you break a dollar, you spend a dollar. I don't know why that is but it is. Ever notice? And you honestly don't know where it went.
Well, now you are going to. That is what the notebook and jug/can is for. From now on every time you spend a dollar you are going to write it down. How much you spent, where you spent it, what you spent it on and why. At the end of the day the change goes in the jug/can and STAYS there until the jug/can/whatever is full.
When it is full you are going to sit down, roll all those coins in rollers and go to the bank and have it converted into a money order and send it to your credit card company to pay down that debt. Once the fantastic day comes the credit card debt/s is/are paid, and it can then be deposited in a savings account or money market account.
Fourth Rule of Money;
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Clutter costs you. It does, really. It takes up space you could better use for something else. Half the time you don't remember where you put anything and it's depressing! It is also a source of income.
A tale on myself. I was watching a shopping channel and a jewelry cleaner came on. I mentioned to my husband I should get one of those. He replied with �Why? You already have one in the bathroom cupboard.� As it turned out I didn't. I had TWO! Kept one, sold one on eBay and stashed the cash in my Paypal money market account. It is earning 5%+ at the moment.
Yeah, I know. You look at the clutter and haven't a clue where to start. I didn't either and I had 40 years worth. It turned out to be really simple in the end tho. Every day I would throw at least one useless, clutterly thing away in the trash, put something in another box I wanted to donate to charity (which if you donate it to a church or charity recognized by the government like the Salvation Army etc. You can get a receipt for it's value and deduct it from your taxes.) Every now and then you run across something you forgot you had, been looking for, or can actually use! Christmas in July. ;D
But better yet you find salable, cash producing goodies!
I know have a saying that has stood me in good stead and stashed some nice cash at the same time.
�Give it away, throw it away, or sell it on eBay.� You might not sell on eBay but there are yard sales, garage sales, flea markets, local bulletin boards that merchants let you post �For Sale� signs etc. in which you can get rid of some of the clutter and make a bob or two while you are at it. It goes toward the credit card debt and later in the savings account just like the loose change does.
Fifth Rule of Money;
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It has no memory.
It doesn't care if you pay a dollar or a hundred dollars for the same item. So spend it wisely. If you see a pair of shoes in a store for $40. and the exact same pair on sale for $25. somewhere else. Don't pay retail if you can get it on sale. The money doesn't care but you will. Or don't buy the shoes at all if you don't really need a new pair of shoes and save the $25. too. Remember every penny counts and they are YOUR pennies!
I think one of the best things that proved this to me was when I started saving the money to buy the computer I am typing this on. I went to the companies website to find out just what computer features I needed to do the job I wanted the computer for then wrote the specs and price down.
Every payday I put money in a special computer account. It took a year to raise the money. Then I went back to the website and discovered two things; The price had dropped by $300. and the computer had been upgraded! I now could not only afford the computer, latest model, but a flat panel monitor to go with it, and the shipping costs with a balance left over of $29.!
A word of warning tho on store sales. Be sure what is marked as on sale, really is. Many times the store will mark UP an item to mark down. You are still paying full price but think you aren't. Sneaky but not illegal, yet.
However, real sales can be real money savers.
I have a mail order catalog I do a lot of shopping from that have huge mark downs on their stuff on a fairly regular basis PLUS they send me money off coupons. And free shipping flyers.
I saw a coat I wanted but couldn't afford in one of their catalogs. I knew I could make the one I was wearing last another winter so I waited them out. When I got the catalog that listed the coat at 25% off I had a 20% off coupon and a free shipping voucher. So when I wrote the check to pay cash I had been saving to buy the coat with I got it at a whopping 45% off plus free shipping. Still wearing it. Nice coat.
Sixth Rule of Money;
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Refunds Rebates, Discount certificates and cents off coupons REALLY do add up.
One warning on those refunds/rebates tho. Companies offer them as incentives to get you to buy their goods KNOWING a large percentage of you, after reading the hoops you have to jump through to even claim one, won't (many don't even bother doing that.) They also make it very hard to qualify, even when you have qualified. And sadly some are never going to come up with the cash for legitimate reasons. Like for example they have gone out of business or closed out the item voiding the rebate. THAT being said it is still ALWAYS worth the effort. Just be sure you read the qualifiers carefully, follow to the letter and then make 2 copies of them. (A trip to the local library and the use of their copy machine if you don't have the means to do so at home is a cheap way to do this.)
One you will include with the originals to prove your proof as it were, with a note you have made a copy for your records. Date all of it and then send it by certified or confirmation that has to be signed for mail . I have yet to be refused a refund or a rebate doing this. I have had to send a copy of my copy of proof, on two separate occasions before the companies in question gave it up that I could indeed prove I had followed the rules and would not give up until they kept their word. It netted me an additional $50. each time. It went in the bank with the other money.
Discounts are wonderful things. My husband needed safety glasses for his job. Since we are members of AARP and Lens Crafters is one of the participants in the company glasses program he was able to get a 30 percent discount on them!
Coupons can be very useful if you remember a couple of things. One, companies issue them to get you to try new products. Which if you are of a mind to, do. Otherwise ONLY use them toward products you already use. In many cases the STORE brand is cheaper than the brand name even after applying a coupon. So if you are buying paper towels etc. stuff that it really doesn't matter who made it (and many times the very company that has the brand name goods for more money!) If your grocer also does a double coupon day save your coupons and go shopping. You really will be amazed at how much money you can save by doing a little extra work. So check those Sunday papers with a pair of scissors!
Here is another place �On Sale� works. Stock up on the non-perishable things you use on a regular basis like paper towels, trash bags etc. while they are on sale. If you have the storage space caned goods as well as you usually get a nice discount if you buy by the case.
Seventh Rule of Money;
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Pay more now, pay less later.
For example if you are paying off a loan. Pay a little more every payment than the amount owed. It adds up. Let's say you have a 30 year mortgage at 10%. Just an extra $25. a month could add up to a whopping $75,000 you DIDN'T pay somebody else at the end of that 30 years!
Eighth Rule of Money;
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Months matter.
Twice a year there are five weeks in a month did you know that? Yep, there are. So if you start paying on credit cards or other bills on an every 4 WEEK payment plan you are adding 2 weeks a year and a full extra MONTH every 2 years to your payback. If you have, say a 15 year rather than 30 year mortgage. You could knock a whole year off what you owe bringing it down to a 14 year pay off including that years interest. Not a bad gig that!
For those of you who are thinking of buying a house remember this one thing and it may not only save you money, but save your home from foreclosure some day down the line. When an agent tells you you can �qualify� for X amount of money it is NOT the same thing as you can �afford� X amount of money. Never, EVER, buy more house or mortgage payment than you can afford! I don't care what you qualify for!
One note. Be sure on any loan you have that it doesn't have an early pay-off penalty clause. Some lenders like to get you in the neck, one way or the other. Most waive it on request. But NONE offer it in hopes you didn't notice.
Since I am on the subject of mortgages and loans, I hope you are sitting down because this is going to be a tough one for some of you. If you are buying a house or car that is more than you can afford one of two things are going to happen. One you will default on the loan and lose the house or car or both and still owe money in penalties and interest you didn't even know you owed. For example did you know if the repo man comes and gets your car for non-payment, it is sold at auction for LESS than is still owed on it YOU are liable for the balance? Trust me on this one. You are and the bank or lending company will sue you to get it. OR you can downgrade to something you CAN afford. The same goes for leases and rentals.
The reason this may be harder for some then others as sometimes you are still living in a family home
that even though the family is gone and the space is way more than you need it was HOME. People forget that where ever YOU are is the real home. Not the space. Other times it is �What will the neighbors think?� Unless they are the ones paying your bills it isn't any of their business. Or is it you trying to keep up with the �Joneses�? Ever think the Jones might not be able to keep up with the Joneses and are in as much debt as you are? Or more? What ever the reason. You can't afford it. Move on. Just the release from the stress is worth it.
Ninth Rule of Money;
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You don't have to own something to enjoy it. That's what lending libraries are for. (My one weakness is Netflix) I don't know how much money I have saved renting rather than buying movies/TV series I like. One other thing is they also have periodic greatly reduced sales on the films I do actually want to own and watch more than once. I think I have worn out several of them I enjoy seeing them so much. But I beg of you don't spend $20.-$30. of your hard earned money on a new film you are only going to watch once then put away to take up space! Rent instead.
I also like to keep up with computer technology and the local library is a great source for reading the latest magazines. No charge. Life don't get no better than that. So cancel those mags you think you just HAVE to have and any other odds and ends that you only read once (if you have time) and throw away. Add that saving to your ever growing money pile!
Tenth Rule of Money;
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You have to give to get. Tithing dates back to before the formal Church tithe believe it or not. The fact is you have to give something to get something. For example you can't grow a crop unless you plant the seed first. That is a seed tithe. Same for growing a money harvest. You have to plant your 'seed' money in good soil, be it a bank, money market, stock, bond, real estate or what have you. So pay/tithe YOURSELF first, chose a good home and grow your crop. You can do the same if you remember one thing;
Everyone you owe OWNS you. Debt is a liability, money in the bank is an asset. Which would you rather have?
Believe it or not it isn't going to be all that long before you discover a strange new thing. More money than month. Now is the time to open that long awaited savings or money market account and put that money you had been sending to pay off the credit cards to pay yourself instead. Earning interest for you instead of charging interest against you.
Speaking of selling on eBay. I can be found there under �professorwho� as I do sell the odd bit and end there occasionally. :)
Copyright 2006
