Hey everyone! I get a lot of questions about finance, investing, debt, etc. etc. I was talking with a friend yesterday about credit card debt and came up with some ideas for how she could better manage her finances and I thought I would share those ideas with all of you!
Side Note: I’ve gotten a few questions from all of you about the Brunner Project. Yes, it’s still underway and my next post about it should be sometime later today. I’ll be talking about the finances and investing side of the renovation (how much I paid for the property, the cost of renovation, expected sale price, expected profit, etc.) Stay tuned!!
1. Educate Yourself - Understand Where Your Money is Going
I urge you to ask yourself and even ask some of your friends and family if they really understand their money. The first step to becoming the captain of your money ship is to actually understand how the money comes and goes and how the ship operates.
Personally ask yourself these 5 questions in order to see how much you know about your personal finances, if you aren’t able to answer them accurately and right away off the top of your head, then you don’t understand your finances as well as you think:
- How much income do I make every month?
- How much are my expenses every month?
- What is my total credit card debt?
- What is my largest expense every month?
- How many recurring and automatic charges do I pay each month?
I asked myself these 5 questions and I’m able to answer them quickly and off the top of my head. I went around to my family members and friends and asked them these 5 questions and all but 1 of them couldn’t even give a ballpark estimate for these questions. I was horrified, to say the least.
If you don’t understand where you’re going and how your ship operates, then how do you expect to get there? Start by researching and understanding your own personal finances - learn the answers to those 5 questions!
2. Don’t Spend Money on Stuff You Don’t Need and Can’t Afford
One major issue I see with my friends and family is that they are constantly buying stuff that they don’t need and can’t afford. For example, I have a friend who loves coffee and loves clothes. She goes shopping almost every week and buys new clothes on her credit card that she doesn’t need and she goes to Starbucks almost every day and buys a $3 cup of coffee that she doesn’t need.
She then complains about how she has credit card debt and can’t pay her full balance each month. Now she’s getting huge interest charges because she’s not paying off her credit card on time - she’s bought too many useless things that she couldn’t afford and didn’t need.
I told her to make coffee at home and stop buying new clothes every week. Do you know how cheap coffee is? An average cup of home-brewed coffee will cost you about $.15 and taste just as good as a $3 cup from Starbucks.
I also told her to realize what a bad investment clothing is. It’s ok to buy clothes occasionally if it gives you a little boost of joy in your life, but every time you spend excess money on clothes that you’ll probably only wear a few times, you’re taking valuable capital that could’ve been invested and used to pay off your debts. I told her to keep track of how much money she saves up by not buying clothes and coffee and then at the end of each month she can use some of that money to pay a portion of her credit card debt and some of that money to invest in something that will appreciate and pay a dividend (like STEEM or a dividend stock, for example).
Analyze your life and try to find the places where you’re spending money on stuff that you don’t really need. Add all this money up in a month’s time and see how much you could’ve invested instead of spent.
3. Pay With Cash Rather than Credit Cards
Here’s another huge issue that I see amongst my friends and family - they use their credit cards to buy everything and they don’t understand that the money is real!
When you buy stuff with credit cards, it almost seems like the money just comes out of thin air, you don’t really have to think about it. Credit cards are an amazing tool for procrastination! You buy something for $30 and think to yourself that it’s your future self’s problem to figure out how to pay that back.
If you struggle with managing your credit cards, I urge you to start buying things with cold hard cash, something you can touch. I know it may go against your crypto roots to use such an “Ice Age” form of payment, but trust me, it will change the way you view your purchases. Spending money will be a lot harder when you actually have to feel it physically leave your possession.
Disclaimer: Nothing said here is to be taken as financial advice. This is purely my opinion. Do your own research and never invest more than you are willing to lose.
Here's the Question of The Day, don't forget to post your answers in the comments!
What is 1 thing that you spend money on that you wish you would cut back on? Will you do it?
Thanks for reading! Don't forget to leave your thoughts below and I look forward to seeing you in the comments!
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Nice tips! Thank you for sharing :D
Completely agree, #2 is a big one. I often catch myself buying things I don't need and Amazon doesn't help either. It's important to have a sense of value when it comes to your money. Personally I've been obsessed with investing my money, the best thing you can do with your money in my opinion. Hope to see more posts like this. Upvoted!
Thanks for your support @koldy! Yes, Amazon’s convenience is both a blessing and a curse! I always try to think of my purchases in terms of the roi (return on investment) they bring to my life... if a purchase doesn’t seem like the return (financially, happiness or otherwise) then I don’t buy it. Investing in income streams has changed my life and your right, it’s the best thing you can do with your money!
Creating multiple streams of income would be a good one! Even though that is a small target market that would be good to share.
If I did have a problem, it would be being too thrifty. I rarely spend on what I don't need. I guess that's just how I was raised. But if I really was nitpicking, I wish I didn't have a car loan to clear. Haha.
It's funny that you say that you're too thrifty @danielwong, I have a similar issue... I honestly hate spending money and I get bashed by friends and family for being "cheap". I just really enjoy investing and letting my money grow. One of my New Year's resolutions is to actually take a few trips this year and enjoy the life I've built for myself. We'll see how that goes 😊
Your highest spending consists of necessities - that's a great sign of amazing money management, keep up the good work!!
Haha great to be in such company. I'm thinking of a trip to. Maybe a year ends one.
Have a good weekend man.
Fantastic tips on finance!
I have to say, I order way too many veggie burgers. It adds up!
haha, I'm not vegetarian, but I love veggie burgers as well and they are very expensive. The world is backwards, bad food has cheap price tags and is convenient to buy, good food is pricey and inconvenient... Maybe one day we can turn this thing upside down! Thanks for sharing @sequentialvibe!
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." - Warren Buffett
Yes! This is the key! If you lose 50% of your money, then you have to make a 100% return just to break even!!
Agree, Buffett was on point with that!
Yeah he totally was!
Definitely, the intelligent investor proves that!
What a great book!!
Never risk more money than you can afford to lose.
100%
that's the key to investing!
Absolutely the key, no doubt about it!
💯 totally Galle!
nice folow for follow
like for like
this is the conscious consumer..Everyone needs a friend like you @khaleelkazi ☺🙏
yeah i agree with you .. we need to learn .. where to invest or from where i can get good money .. we also need to learn these important rules.. this post is very help ful for me :) keep it up budy @khaleelkazi
This is really true.. i was experiencing a finacial problem before because of my wants in life. I buy things that i dont even need and end up using my credit card as a payment. Every time i watch my wallet it feels like watching onions. Because it makes me cry. Hahahaha. But thanks to my friend who help me and give me tips like this. I slowly get back on track. Posting like this is really a big help to a lot of people my brother. Many people are experiencing crisis everywhere.. i hope our fellow steemians can read your blog so that they can learn from it..
You are right @mrsappeal, we need post like these, we must learn how to spent our cash, if not some people will earn even on steemit and waste it on things that are not necessary.
You are right @mrsappeal, we need post like these, we must learn how to spent our cash, if not some people will earn even on steemit and waste it on things that are not necessary.
Nice post I upvote Yes
you are the expert of this problem. 👍 @khaleelkazi
https://steemit.com/bitcoin/@atim1234/part-3-reveals-the-lie-of-scam-sites-or-mengungkap-kebohongan-situs-scam-aa000a0d683ef
great your post
Thanks for sharing,
I spend money on my family. My family is my first priorty
I agree with those tips. I find hard to understand how can some people use credit cards with no care whatsoever. This is like the number 1 mistake that causes financial problems in the future.
We need to take care of our present and have in mind that if today we aren’t good, it’s because of what we did yesterday. By taking good and responsible actions today, we will help our future self.
I think it doesn't really matter, as long as we can keep ourselves.
I just argued.
Thank your opinion!!
If you spend money on things you don't need, you'd have to sell those things you need and want most. And about not using credit card to buy things, I use my card to get most things I want because it's easier and safer in this part of the world am in.
Don't invest your total amount in business hold some money safe this is big tip
yeah you are right
we all need to save
Thanks for sharing my frends
Nice post @khaleelkazi but as for me since i work in credit cards i guess credit cards is a very good replacement for cash but ofcourse if we can control our spendings and not go into debts we can’t control.
Thank u for pointing on such an issue👍🏼
I do agree with most of it. I don’t agree that you should never buy things that you don’t need (if you can afford it ).
This is also called granting yourself or your kids something. For instance after a sport match of my kids, they do like a bag of chips. They don’t need it but still will get it. Comparable with the coffee in your post!
Analyze your life and try to find the places where you’re spending money on stuff that you don’t really need. Add all this money up in a month’s time and see how much you could’ve invested instead of spent....
I think that i over spend on buying airtime!
It's helpful & informative post @khaleelkazi
Thanks for reading!
I agree, really informative!
REALLY informative!
Thank you GAL!
Thank you DG!!! Means a lot!
These five questions above if answered properly place one on the right path, for me purchasing things with credit card should only be the last option.
That one thing I spend money on is mobile data, it drain most of my funds and I wish I could cut down on it but its difficult because I always have to be online.
Last year I spent way too much on stuff I didn't need, mainly amazon books and things and eating out is another huge one. It's always cheaper to stay in, whether you're drinking, eating, or doing an activity.
Thanks for the reminder that I need to budget more effectively. Usually I just get by by not buying big items I don't need, but there are definitely some areas I could improve, and budgeting seems like a good idea. Time to bust out excel...
Tottaly agree with those tips, it's a shame that me at my 23 years old am more responsible with my money than my father with his 55 years... Economics should be taught at school, investing, what to do, what not do, thank god we live in a world with internet, where we can learn everything from reddit, steemit and many other blogging platforms!
interesting contest,,,i hope this tips helps our steemit family...thanks for shareing
Thanks for reading..
it will help everyone, I've seen it!
It has helped everyone, keep it up!
Thank you I will!!
I've got to disagree with this one. Obviously if you're spending money you don't have, then credit cards are a disaster waiting to happen, But if you're on top of your finances, credit cards are so much better. Cash back, rewards points, and bonus programs are the tip of the iceberg.
You also get to dispute claims through the company, identity theft protection, and a permanent record of your spending habits. If you lose a wallet with $1000 in cash, it's as good as gone. If you lose a wallet with ten credit cards in it, it's a pain to deal with but your money is probably fine.
I think it is better to pay with cash than to pay with credit card like you said, we should only buy things that is within our level that are very needed and that we can afford.
My major expenses I wanna cut is the cost of transportation, this is draining my finance, I work very far from my house, the solution is to either change job or move to an apartment closer to where I work, but residential apartment there are also very expensive. For the now, I have to continue living with this high cost of transportation.
I am currently spending a lot of money for some fuzzy drinks like Cola, Fanta and etc and I wish I stop doing it...
Yes! Cutting back on things like drinks and food is a great step towards getting your finances in order!
I agree, cutting back is the first step!
Totally agree!
It is the first step and one that will serve extremely well!!
Wow. Actually @khaleelkazi these ideas are so fundamental but today they are radical. Especially number three to pay with cash rather than credit cards. I still use a check card. My credit card interest is 17% but even with no interest we can spend more than we have creating consumer debt.
QOTD: What is 1 thing that you spend money on that you wish you would cut back on? Will you do it?
I wish my cellphone bill was less. I got the lowest data plan and this can get me into trouble to. The only way I can cut make on extra data charges is to only use the phone when wifi is available. That takes a lot of self denial.
Thanks for educating us in a frugal way.
Oh, check out how dolphin school has changed my posts.