These daily financial tips are designed to be short ideas covering different aspects of family and business finances. They are short pieces intended to provide information to enable individuals, families and businesses to make informed financial decisions. Not all tips will apply to every situation, but over the course of a year, most financial topics will be covered. Check in regularly and share with friends and associates.
The single biggest challenge I see in peoples finances is living beyond their means, becoming over leveraged via loans, mortgages, credit cards, etc. Much like putting on weight, it usually starts with incremental purchases which tend to grow over time. Paying off credit cards in full monthly, become small monthly payments which slowly grow over time. Before we know it, we’re carrying larger balances of very expensive debt. Have you ever sat down to calculate how long it would take to pay off a credit card based on the minimum monthly payments, adding the monthly interest charges? You won’t live long enough.
It is increasingly hard to resist ‘impulse’, discretionary purchases. We are constantly being bombarded by very sophisticated marketing programs by retailers (banks are retailers as well) and products on TV, Radio and Social Media. They all use sophisticated data analytic programs that effectively predict buying patterns and pre-dispositions. All Social Media and online platforms (Facebook, Twitter, Linkedin, google, etc) use sophisticated algorithms that target your buying patterns.
Financial institutions – banks, credit unions, credit card companies, loan and mortgage companies, also use these sophisticated programs to increase clients credit usage and exposure. They don’t make money unless you use their credit services. Their ideal client is someone who maximizes the use of their credit services.
In this environment, it is critical to focus on yours and your family’s essential needs. Don’t allow discretionary wants become needs. Have a goal and financial focus to build your plan around. Ensure the plan includes a component for savings and investments. Only after your savings and investment needs (remember Day 2 – Pay Yourself First) are met consider discretionary wants. Beware of your financial trends. If you find you start not paying credit card balances in full and start making monthly payments, start adjusting your spending so monthly payments don’t become minimum payments.
One of the top two stressors and leading causes of divorce in relationships is financial stress. Having a plan will reduce the temptation to succumb to discretionary temptations, increased credit temptations and bad financial habits. Being frugal has it’s advantages. I realize it’s easier said than done. Stay tuned for more daily financial tips. Share with your friends. If you have questions or topics you wish covered, please email me.

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