AN URBAN MAMA'S TAKE ON NURTURING HER FAMILY

Tuesday, February 5

Wallet Wealth - Rat Style



Some of this might be redundant, but it's worth repeating in this 'year of the rat'.

* Make sure your kids' savings are locked into high interest paying accounts. Up until recently our kids' savings were earning them point one percent, yes '.1%' in children's accounts.

I never got a logical explanation as to why the bank wouldn't have suggested a higher interest savings account given the large sums of birthday money we'd saved. I guess it's just one of those things about educating ourselves...anyway, now they earn 3.25%!

* If you are plagued with credit card balances that never go away pick up the phone NOW, and negotiate a no interest or lower interest period. The first agent may say 'no', so ask to speak to the manager, if that person says 'no', ask for the next person up, and so forth.

One time I threatened to close all my bank accounts and cancel my credit card, they put me on hold for about 40 seconds and 'miraculously' came back with a 'yes, we'd love to help you'.

* Forced savings will help you save.

On the first of every month my bank transfers $50 ($25 for each kid) into their RESP. I used to think 'it's ONLY $50', but in no time thousands have been saved - plus we've benefited greatly from the government's 20% top up.

* Leave credit card(s) at home. There will always be a sale, a bargain, something to justify pulling out our plastic impulse card. If we buy something on sale but don't pay the balance in FULL, on time, we end up paying interest which means the 'deal' we got bit us in the ass.

* The best thing a credit cousellor ever taught me was to pay my credit card debt on a weekly, sometimes daily basis. Instead of waiting to pay the minimum on its due date, pay the debt down every time one has extra money. If I got birthday money I'd deposit it to my CC; if I had an extra $5 here and there I'd deposit it to my CC; if I'd lent someone lunch money and they paid me back I'd deposit it on the CC.

* To be fair, there is ONE plastic impulse card which you can't afford not to have with you at all times: a library card; free books, magazines, movies, music, free knowledge! This institution is so awesome it even offers toy libraries home delivery and hospital services.

* Crunch numbers/re think the leaks/stop letting them rob you blind. I speak from experience, though no time for a sob story. Three things you can change today, that'll free up money you can use to pay off debt or transfer into a high interest savings account.

1. Cell phone. Need it? Ok, fine, keep it, but shop around, lose lots of sleep over this until you've got the best deal. Here's something and something else to get you started.

2. Credit card(s). Need it/them? Ok, fine, keep it/them, but why are we paying them a yearly fee? Absurd, we pay them so they let us buy things, mostly on impulse, and then we pay them back late and they punish us badly. Absurd.

3. Slavery - car style. A highly educated, well read, resourceful, handsomely paid married couple we know only owns one car. They travel all over the world, often, they fine dine a lot, they entertain at home - no holds barred and they dress well.

When I asked them about only having one car they broke it down to research they'd done, questions they'd asked, information they'd gathered which totalled about $12,000 a year! Yep, even with a seemingly afforable car lease, a car will make you its slave, mostly disguised in unexpected expenses.

In 2001 my husband and I shared the above true story with a close friend, someone who always complained about overwhelming money shortages and unfulfilled travel dreams. It took seven years for the facts to sink in, but horray for inner growth, said person is selling their car, opting to invest in a car share program, using local transport, walking, and using much freed up funds to travel. Bon vogage!


Would love to hear your little steps to large wealth victories. In fact, I'll give the best idea CAD $5. Deadline February 15.

6 comments:

GreenStyleMom said...

Good post! Some of my favorite books are The Millionare Next Door, The Wealthy Barber, and Dave Ramsey's books. All of them talk about the importance of saving early and regularly. We have long-term savings invested for our children, but I've been meaning to get piggybanks and start introducing money concepts. We might have to make piggybanks as one of our art projects in the next few weeks!

Amy said...

This is a great post and so true! I agree with everything you stated here. The things that I have been trying to work on are...

-Planning an attack for your debt. I think half the battle for me was having everything written down in black and white and figuring out how we were going to get rid of it. We chose the popular snowball method and it is working wonders towards reaching our goals. It just feels good to have a set date in mind for when we will be financially free.

- We are keeping our old beat-up cars until they run into the ground. We are close to paying them both off and then we will continue to repair them until it isn't worth it anymore.

- We started our budgeting process with evaluating our grocery budget and seeing how far we could stretch our dollars. It seems to be the most variable in our budget and I try to be good about planning our meals, researching and trying new recipes so we don't get bored, and continuing to work on my cooking skills.

Great post! I look forward to reading everyone's tips.

Cammie said...

Fantastic thoughts!

My husband and I have decided that there are some things we can do without...cable, home phone.

I recently heard on Oprah about the smart strip. These are power strips that can be turned off during the day...because all of those things that are plugged in during the day (lamps, televisions, DVD and CD players, etc) suck up electricity and therefore money while they are waiting to be used. These will be a purchase soon!

amy t sharp said...

I love this post and NEED this post. Buying secondhand clothing is key...for growing kids- or mama swapping clothes... I am trying to keep my head ablove water till this other house sells and we only pack lunches now and treat ourselves much less to dinners out and such....Home has become a place love to be now...We are getting to be pretty good lil chefs!

Deborah said...

Great post! Everything you said was on point - and is just plain common sense. I have always lived by the belief, if I don't have the money for it, I don't buy it. So, while I have a credit card, I charge things and pay them off. And my credit card gives me rewards -specifically frequent flyer miles. If we want a higher ticket item (my husband currently feels we need a larger/flat screen tv - our current one is a 26" dinosaur) we save up the money, then purchase the item. We have taught our children this as well. We do not buy on credit (take the item home then pay it off) though we have bought on lay-a-way. Also, our kids have savings accounts and all the money they get from family for holidays, birthdays, etc. goes into that account. They receive a nominal allowance so they have pin money. They can do additional chores for extra money. And they have learned to save it if they want a toy or such between gift giving events. Oh, and household expenses get paid first and eating out is considered part of the monthly food budget, hence, it's a treat. I learned the hard way in college not to charge pizza and beer not being able to pay it off at the end of the month. It took me months to get out of debt my first card put me, then I had to practice self-control and discipline. I know I have jumped around in my post here, but this topic so hits close to home and it amazes me when people I know ask for my help getting out of debt (budget couseling is something I do on the side)but they cannot see how they do not "need" all the cable options, cable internet, eating lunch out each day, when they cannot make their basic home bills and have no savings or retirement. Life is full of choices. Oh, society doesn't help with all the "you deserve this that and the other" advertised on the tv. Thanks for listening to me this long.

village mama said...

Thank you each and every one of you for your fabulous ideas!

So hard to pick a winner; you are all winners to me, since you all chose thinking vs 'impulse zombieism' (sp?).



The winner is: Amy! Planning an 'attack on debt' is so aggressive, I love that image. One place I believe aggression can serve us well ;-)

Thanks again you smart sassy cash wielden' mamas. XO VM