Frugal Life Stinks

Discipline. Conserve. Moderation. Budget… are all possibly scary words to someone who would rather ‘live now’ and ‘die poor’.

Unfortunately, in this world of financial turmoil that is today, sticking to the basics is what will get you through life and living in prosperity. Yes, like Grandpa used to say, “Save your money and pay for it cash.”

Why care? When you are on death’s bed you won’t need money right? Wrong. If you plan on having kids think of what you will leave them. Think of funeral expenses. Think of the life your children will have if you educate them about monies and leave a little something to get their finances into gear earlier in life.

However, there is no need to re-read yellow paged fiction novels day in day out. Here at Savemonies we want you to have fun, save in moderation, put some into investing and live a full and abundant life.

Good Debt Bad Debt

When we talk credit, we are talking about bad credit, a.k.a. bad debt. Credit from the bank is money that is granted for you to spend which you have not actually earnt yet. It is usually of high-interest and is marketed as a great deal but may have hidden fees. The thing is, if you start to make this a habit you will end up in a perpetual nightmare of being broke and living week to week.

Why is it bad debt? Because most people buy junk with their credit cards. Junk is superfulous items that do not appreciate in value. Designer couches, lava lamps, a slightly wider plasma TV, or perhaps a louder even more clearer surround sound system. All the things we choose to buy from week to week that should not be accruing interest so the banks can keep any possible gains you are making towards financial independence. Simply put – save your money and pay cash for these items.

What is good debt? Good debt is a term coined by Robert Kiyosaki. You use the banks money to acquired income generating/appreciating assets. If you can gather enough of these assets to meet your expenses you retire. The mortgage on a house that you have rented out to tenants and/or that appreciates in value each year may be considered good debt.

You Need It Now? Stop Swiping

Do you need that pin-drop slight right behind me sound system? Is it necessary to your survival. Even if you get it for a great discount of 60% off. If you don’t have the cash that instant do you need to grab it – and succumb to the salesman’s glorious offer of 36 months interest free as long as you sign up for this new Master Card?

Stop and Think about what this will do to your finances, your long-term goals, and if you can put some money away each week and pay cash. And yes - you do save monies by paying for goods with cash. You can negotiate a lower purchase price with cash. You save monies on interest repayments from your credit card purchases.

End the debt cycle. Stop buying on impulse. Plan to purchase and save to pay cash.

Things to Think About As the Banks are Laughing

• Have a budget to allocate funds for that new TV in 6 months time
• Build an emergency fund to pay for all your expense for a 3 month period if you get laid off, injured, or are a victim to other unfortunate circumstance.
• Pay off your high interest credit card accounts first, then your lower interest personal loans
• Get help from friends you belief to be financially capable and trustworthy to help your cause.
• Help yourself – read some financial independence self help books