Straight Talk from Al Jacobs
FINANCIAL ERRORS TO AVOID
As many of us are aware, for persons pursuing the American dream for financial success, things don’t always work as smoothly as they might. A recent article titled Top 10 Most Common Financial Mistakes include as reasons living on borrowed money, spending too much on your house and not having a plan. Although these may be factors, they’re merely peripheral to financial success. This leads me to my version of what goes wrong for most persons. I’m convinced two fundamental bad habits are what cause most people to spend a lifetime merely scraping by.
First and foremost in fleecing the average citizen is the credit card. I’ll describe how they should be used. When the bill arrives in the mail, check it for accuracy, write a check for the full amount and mail it in the envelope provided before any interest can be charged. This has been my habit since I acquired my card years ago. There’s another way many people choose. Presume the balance owing is $350.00. You’ll be given the option to make a minimum payment of $25.00. Many persons take this route so to stretch out their finances – and perhaps stretch out is the correct term, as I visualize an old pirate movie where the prisoner is stretched out on a rack. If you go this method, you’ll be charged interest on the unpaid balance at rates in the 25% range.
For the second misfortune, the motor vehicle constitutes the average American’s single most important fixation. Far more than transportation, it’s for many the embodiment of beauty, price, status and individuality. There’s no single product more forcefully promoted or representing such a substantial portion of disposable income than one’s vehicle, and the potential for financial dilemma is all too real.
I’ll dispense the following advice: Don’t buy anything you can’t pay for in cash. If a new vehicle isn’t within your budget, search for a serviceable used one. If the old one still runs dependably, don’t make the change. And regardless of how you select your wheels, avoid several bad choices. Don’t lease a vehicle; if you must borrow, search for the lowest possible interest rate; and keep whatever you buy as long as it’s serviceable.
A final thought: These are the two reasons why many Americans remain mired in debt, but they’re easily correctible. Merely a bit of self discipline and an ability to ignore the social pressures imposed by the promoters of these scams are required.