Good Thursday morning to you. It is day four of our money week. I waited a long time to actually write about this theme of money. My personal niche is not with money, but money is often needed for achieving personal growth. I know that many relationships end with fights about money. For that, I’m so thankful for the relationship I’m in. We are not free from the need of money in life, and each of the subjects discussed this week have been or are a personal struggle in our lives as well.
Yesterday we spoke about the process of debt, going through some of the options to reduce debt, and perhaps leaving you with the idea that debt is an unhealthy thing in our lives. Well in some cases in our world debt is good and sometimes it is necessary. I know in business the use of debt to help make you money can be good. The thing that is bad is using debt for those things that are everyday expenses. Like using your credit cards to buy things you cannot afford; I know in lean times you may use your cards to feed your family. But when it gets to the point you are using credit cards to buy luxury dining, or other things you really can’t afford that allow you to live above your means, this is only a dead end trap. We need to use credit wisely just like many other things in life, with control.
I told you yesterday about a method of paying off your cards one by one, paying the most you can on one card until it is paid off then taking all of that payment and the extra you had to save some and pay off the next card. Well using this concept along with a savings plan to put money away is a wise thing. Imagine learning to save just a little bit, and how much a little over time could add up. I hear all the time “I have nothing”; I say do what you can. If you can save just $5 a week, over time that will add up to $260 in a year. As you build savings, move your money at certain levels to other places to make more money. You won’t miss that little bit.
One thing I have learned to do over the years is the change jar. At the end of each day I put my change in a cup on my bookshelf. When the cup gets full you can take the money out and spend it, or you could then take it and put into an interest-bearing savings account. Yes those accounts don’t pay great amounts of interest; I had a savings account that would pay me like a nickel on this money every three months. That was a nickel I didn’t have before. And remember, the money I’d put in there wasn’t being spent; it was being saved.
Better yet imagine that you are able to put more aside then that; let’s say that you are able to put together $20 a week. If you could put that away it would be over a $1000 a year. At the end of the year take that $1000 and make a lump payment of $500 on a debt, and put the other $500 into an IRA or long term savings plan. You are then working on two goals at once.
Let me give you another way to save and use both debit and credit cards to your advantage to save. Many people I know use credit cards to track their business travel expenses. They have a credit card to pay for the expenses of your trip, in return get airline miles for every dollar spent. If you are going to pay for something anyway, and you have the credit, use this method to get the points, then pay off the balance when you get the statement.
I have a debit card with Paypal that actually pays you a bonus if you will for using the card as a debit card. So if I am going to spend $500 a month on things like gas and food, I pay for it with this debit card, then at the end of the month I get about $10 back. I know it’s not a lot of money but add all of these things together and you now have a credit system working for you.
One of the things stated in the Rich Dad, Poor Dad books is how rich people don’t work for money; they have money work for them. Well you need to learn what cards and advantages you have with the systems you have and get them to work for you. If you pay $10,000 a month in expenses and pay for them with payment sources that pay you back, you can use your money to make more money.
The next step is to restore your credit after you work to pay down your debt, once again using the cards each month to pay for things and then paying them off at the end of the month. This improves your credit score more than you probably know. But having the money in a savings account gives you more control when deals come along. Tomorrow, I’m going to talk about deals, finding items to sell and how to then invest that money to make even more money.
The biggest thing I want to get across this week is the kind of thinking of those who are in business, or have created a great business deal. There is no such thing as a “money problem;” there are only “idea problems.”
Until tomorrow, I’m Tim Gillette, the Rocker Life Coach. It’s time for you to live the life you always dreamed about, to love what you do and those you share life with. Let us help you become the RockStar in your world. Do you want some help putting together the steps to achieve your dreams? I can help you. We have programs to fit any need, any budget. Call me at 214.616.8912 or email firstname.lastname@example.org.