I’m not sure what percentage of the population this applies to, but I think a percentage of people might recognise what I am saying here.
Bad money management.
People who live OFF debt. Litterally. They feed themselves not off the paychecks, but off debt.
They house themselves not off paychecks, but off debt.
How do they continue such a cycle?
Interest ends up costing you more than the cash in your back pocket!!!
The people I am talking about are those who see a price tag which says $1999, take it home today type offers. They end up paying $2500 for that $1999 item, clearly don’t realise it though.
Debt money is the WORST money. If you can’t fund it out of your own pocket, do you really need it?
We don’t live like that at all, and live well and truly within our means and add to a savings account regularly, so that we end up making INTEREST off the money we don’t spend, rather than hand that interest over to a bank.
And to us, its much easier losing 6% interest than it is placing it on the credit card (purely an emergency / payment of automated bills item), mainly because saving a bit of cash takes just a few weeks. Paying off the credit card could take months, and we end up paying much, much more than the 6% lost on moving funds away from savings to fund purchases.
We also have people who owe us money. They aren’t exactly smart at managing money, and I would guess they are living beyond their own means, which is a shame really. They need a good smack around the head and be tought some smart money management, rather than trying to flog everything out on debt, and then running from debt for a while.
We are at a stage with one particular debt, owed to us for nearly 2 years, which is approaching legal action. It’s less than $1000, but it is becoming worth persuing just to try and get some sense out of the person behind it.
Financial security doesn’t exist in living a life paying off debt. The sooner many people in the nation realise that, the sooner the nation might be in a better position.
We are a nation living on debt. $30 billion of it. Needlessly in many cases, I’m sure.
Why live beyond your own financial means? You do realise that sooner or later they’ll want the money.. They get the interest they charge you sooner or later. And you more than likely won’t win lotto..
It’s better to be making the $ off your savings rather than finding new ways to spend them.
The secret to financial success? Get money and hang on to it.
Stop giving it away to the banks in CC interest, start getting it from the banks in savings interest.. Simple really.
Don’t owe people money. If people owe you money, get a contract drawn up for recovery.
Enjoy.