Spending Money
by Ruby Hawk on Jan 03, 2008 with 8 Comments
We work hard to make our money, and we should make the best decisions possible on how we spend it.
We often insist we don’t have money to put in savings then we fritter what money we have away. How much better to salt a little cash away rather than spending it on 60% mark downs that we don’t need, remember retailers wouldn’t offer deals like this if they didn’t know they could make money off us. They run these sales to improve their bottom line, not ours. When we are enticed with discounts to open a store credit account, we almost always buy more than we need or items we would not have bought otherwise. Remember something we don’t need is expensive at any price.
How much do we really need restaurant take-out, professionally done manicures or Starbucks coffee? These things cost big bucks in the long run, your hard earned money is gone, and what is there to show for it? If you go out to eat lunch from work everyday the price at the end of the month is enormous, but if you brown bag it, it is very economical. Meals can be easy to prepare at home. Pop the chicken in the oven while you bake a potato in the microwave, steam a few vegetables, serve a piece of fruit for dessert, and you have a healthier meal for much less than take-out.
Getting a mortgage you will have trouble paying for is a big mistake. When hard times come you will lose everything you have paid on your house during foreclosure. Buy a house you know you can afford even if it doesn’t have the latest appliances or the most space. You will be glad you did when the payments are due. Don’t ever stretch yourself to thin. Your mortgage payments, insurance, and taxes should not be more than 25% of your income, and less is better.
Don’t borrow on your house to pay off credit cards, instead cut all your other expenses to the bone and pay everything you can on your credit cards. When you do get them paid off, resolve to put no more on your credit cards than you can pay off each month, and stick to it. If you think you can’t do that, cut them up. If you charge $5,000 a year on your credit card at 18% APR and pay only the minimum each month which is 2% of the balance, In 30 years you will have paid $280,000 in interest and still have a balance of 74,000. Scary, isn’t it?
Little things like movies, hairdressers, restaurants, and the like can run into money that you can use to pay off your credit cards and any other debts. Take a look at all your expenses and see where your money is going. See how much you can cut out, and put your money to the best use possible. After all you work hard for your money. Make it count.
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Published in: Personal Finance
IcyCucky | Jan 3, 2008 | Reply
Wonderful article, and you are so right. The word cheap can be very deceiving.
Dee Huff | Jan 3, 2008 | Reply
Ruby, I so agree with you. When you look at credit card charges in that way it’s really shocking. And yes, discounts are very deceptive, and can lure you into spending more money than you intended. Another example is supermarkets that offer a discount on two of a certain product, so you buy two when you only want one. You may have saved 20%, but you’ve spent 60% more than you had budgeted for, or even needed.
Anne Lyken-Garner | Jan 3, 2008 | Reply
Ruby,this is a fantastic article. I agree with all that you’ve said. We spend too much just because we can. Credit cards are not all they’ve been cracked up to be. If people had to save more to get what they wanted, they’d appreciate it more when they finally did get it.
Ruby Hawk | Jan 3, 2008 | Reply
We all seem to have the same ideas about our money. It’s just to hard come by to fritter it away so carelessly. My grandson just bought a guitar he has saved for for over a year. He was able to buy it after receiving money for Xmas. I am so proud of him for saving his money that long to get exactly what he wanted, and something that will last. It will be a joy, and his money is well spent.
Thank you all for your time. I appreciate it.
Amos | Jan 4, 2008 | Reply
I have to agree with you ladies. I put my money to the most good I can. Ruby, you have a smart grandson. A guitar will give him enjoyment for the whole of his life. Tell him it was a great choice and I give him a thumbs up.
Darlene McFarlane | Jan 4, 2008 | Reply
I think anything I could say has already been expressed.
Great work, Ruby.
Mozelle | Jan 5, 2008 | Reply
I certainly want my money to go as far as possible. I try to stretch every penny.
Mavis | Jan 7, 2008 | Reply
When you stop to think about credit cards it just blows your mind. You have written something important to make us think about our money.