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DO NOT MESS WITH OTHERS’ MONEY
You must be 100 percent responsible in all money matters. If you owe someone, they must be paid. When you write a check, it’s the same as cash. How do I do this?
The financial system is designed to deprive young people of their freedom as quickly as possible. This is achieved by the fact that they are involved in debt. People who are in debt are constantly afraid of losing their JOB. Debtors cannot see the big picture and dare not be freethinkers. If they question the system or “rock the boat,” their jobs could be lost.
The world will always be a place of extremes (Right or wrong, that’s the way it is). There will always be those who feel they have the right to profit from the misfortunes of others. Most may not recognize these trends as slavery, but the results are the same. The insane desire to have control and power over others has not changed since the beginning of time. The current method of enslavement and control is the economic system. Physical control is no longer necessary. The ability to control emotions and mind with financial pressures is now real.
Buy now and pay later allows you to control people. Why should you wait for something until you can afford it. The thing is, if you can’t afford to pay cash, you can’t afford to buy.. My personal opinion is that the only thing you should go into debt for is a home. BABYLON’S RICHEST MAN states that you are only renting the house until full payment. That’s true, however, when you make home payments, you’re generally getting something of value that will have value after the payment is made.
The debt system can be made to work in your favor with strong self-discipline and paying cash. Many times, if you pay cash for larger purchases, you can get a better price. Don’t be fooled by the argument that you can buy for low interest and keep your money. You end up paying more. Obviously, if you put the same amount into savings each month that is used for your monthly payment, you will be significantly ahead at the end of the repayment period. Two things happen when you pay cash and put the payment amount into savings. You save the interest you would have paid on the contract and make interest on the savings. If the interest on the purchase is 6% (this may be the advertised rate) and your savings account pays you 5%, then you earn 11%. Even if you subtract two, you still save 1%. For example:
You buy a washing machine for $500 at 6% interest for three years. Your balance reduction payments are $15.21 per month. Your total cost is 547.59. However, if you pay cash and save $15.21 each month, you’ll have $547.59 in savings over three years, plus $40.87 in interest earned. Your total savings at the end of three years is 588.46 and you have a new washing machine. In reality, you earned about $50.00 for the cash payment. You ask, “What about inflation?” If the inflation rate is high, the interest you pay will not be 6 percent. The real interest rate will be more than 20 percent, which is about the same as what you pay when you buy with a credit card
I can’t pay in cash. I have no money. Maxine and I have been married for 25 years, got our first new washing machine a few years ago and paid cash. All the others were used (I think three). I believe one of the used ones was better than new. We bought our first new dryer this year and I know the old one was better and used less electricity. My point is that with a little shopping around, you can find some good used stuff. Then put the payment money into a savings account.
A great example is how a friend finances their cars. His father gave him a car in high school and asked that his son deposit the car payment amount in the bank every month. He faithfully did this all his life. His wife drives a Jaguar Cabrolet and he drives a new Jeep Grand Cherokee. His car savings account is still safe and sound
It defeats the debt system and the economic slavery system. You are in the driver’s seat, not your creditors.
Checking accounts are a trap for today’s low-income earners. If you’re making enough money to get by, a small mistake in your checking account could spell bankruptcy. I know of one case where a 50 cent error in a checking account ended up costing one young man over $500.00. He had draft insurance tied to his savings account. The bank charged him 18.50 for each overdraft resulting from the 50 cent error, and each returned check that the bank sent back anyway cost him $25.00. The total fees were over $500.00
EASY MONEY MANAGEMENT
Can I avoid all this pain and discomfort? The answer is yes. The method of putting yourself on a monetary footing is simple. There are four main things you should do. (For now, I will show you the point of view of a member of The Church of Jesus Christ of Latter-day Saints. PLEASE USE THE THROW SHOP METHOD, IF YOU NEED IT, TAKE IT HOME, IF YOU CAN’T USE IT, LEAVE IT ON THE PAGE].
1. Pay a 10 percent tithe.
2. Pay yourself 10 percent.
3. Track all your expenses and income.
4. Review your expenses and income every month.
Information and understanding of these four actions will allow you to develop a plan to get out of debt, or should you say, out of debt. Look at your expenses to see what can be eliminated. Use that money to pay your bills. Take the account with the lowest balance and pay the money you save by tracking your spending as an additional payment. When that bill is paid, take that money plus what you save by being aware of your expenses and pay the next smallest bill. Keep doing this until you are out of debt. It seems like a simple process, but it is not easy. This simple plan requires a lot of self-discipline.
Tithing is how we pay for all that is given to us. Personally, I know where to pay tithing. How and to whom to pay is up to you. It is a natural law that we must return ten percent of all our gains.
The first words out of your mouth were, “I can’t afford to pay a 10 percent tithe.” The second thought you have after reading these four actions is, “If I could save money, I wouldn’t be in debt.”
THE IMPORTANCE OF TRACKING YOUR EXPENSES
You can follow this plan. I had a friend who made a significant income every year, almost $100,000 a year. He was broke and is a great example of how being broke is an action that has nothing to do with how much money you make. Tracking his expenses showed that he was spending $83.00 a week on espresso coffee. My friend decided to switch to water. He was saving $332.00 a month. That paid a good chunk of that tithe. Then he decided to quit because it was another $50.00 a week. He found another $200.00 a month from his cigarette bill. Drinking after work with “the boys” cost him another $400 a month.
This man was saving himself $932.00 a month just by getting his life in order. Guess what else happened, he told his insurance agent what he was doing. After he settled into his new lifestyle, his car insurance dropped by more than $100 a month. At this point, he decided to cheat a little. His salary was only about 60,000 per year. He reasoned that he needed to save $6,000 a year. He saved enough to pay a 10 percent tithe and part of that savings by changing his lifestyle. When my friend looked at his family’s other expenses, he and his wife found another $4,000.00 a year that could be saved. They applied the plan and at the end of four years had money in a savings account and no credit card debt. (They didn’t buy new cars every year either).
This story is a myth or a plot of creative imagination. No, it’s not like that, there are such experiences in all of our lives. If you follow a simple four-step plan, you will get out of debt. It is clear that each of us can become financially independent.
Keeping track of your income and expenses is simple but hard to do. My method of tracking is to keep a small notebook in my pocket or purse. Wal-Mart has them for less than a dollar. Write down everything you spend, down to the last penny. Include the date, what it was for, and the amount. Record every penny you receive as income. Include the date it came from and what you did with it. Did you put it in your bank account or in your dresser drawer?
OVERVIEW OF INCOME AND EXPENDITURES
After tracking all of your income or expenses for about a month, review your expenses and see which ones are necessary and which ones aren’t. Decide what you are going to do to reduce these costs. Develop a spending plan. You must first provide the basic needs of your family, housing, food in the cupboard and warmth in winter with clothing. Each family should determine their basic needs (children, this does not include a cell phone, a computer in every room, and all the cool clothes). Your spending plan should be developed as a family. All members must be allowed to enter. The final decision must be made by the head of the family.
In the course of financial planning, it is necessary to calculate the net capital of the family. It’s a simple process, just add up everything you have and subtract everything you owe. Not as easy as it sounds, but you get the idea. Once you’ve calculated your net worth, you have a number to track. Each month, the family’s net worth should be calculated and the family should be informed of the progress.
So managing your finances is simple, but not necessarily easy. It takes discipline to track your income and expenses and stick to a spending plan. You can do it!! A great reference for this plan is THE FOUR LAWS OF DEBT-FREE PROSPERITY. (I bought my latest copy from Amazon.com).
This seems like a very simple plan to get out of debt. It’s simple, and the actions to make it happen are yours. You must take action. If you follow these four steps, there will be other things you can do to improve your financial situation. Don’t ask too many questions: just do it.
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