Saving Buzz

The concept of using credit has its roots many centuries in the past. It is a viable system of paying for something that is needed at a time when sufficient cash money is not available. In modern times credit is indispensible when buying a house, acquiring a mode of transportation, or when one wants to go to school. Imagine, for example, a person wanting to go to medical school. Unless he or she is funded by very rich parents, or a well to do company, there is no way the person would be able to pay the ridiculously high fees charged by the medical school. Further, if the person wanted to work a job while attending school (to pay for the tuition) there wouldn’t be enough time to study the material. The only answer for most people is to use credit, the ubiquitous "school loans". Another example is in housing. How would any of us pay for a house from our pocket? Very few people have the ability to save up enough cash to buy a house outright. Again, credit is the answer. We borrow from any of the lending institutions and we are able to buy a decent home so long as we promise to pay the loan amount back with periodic payments – and a small add-on amount called interest.

Interest, the tough part of any pay back system, is the least understood part of any loan. It is easy enough to understand. People just choose to ignore this part of the loan until they have to write out the monthly check. Just the excitement of getting the money for your purchase clouds the somewhat hidden aspects of borrowing money on time. You see, interest isn’t a bad thing, it’s how the lending institutions are able to stay in business. The difficult part comes in when people don’t pay the monthly bills as they should and then the interest starts to compound (and other late fees are added). The more this situation continues, the worse it gets, until the person can no longer make any payments, they lose their house (or other item), and their credit score is trashed. None of these bad things has to happen. Let’s look at a few remedies.

1. Understand the loan. What are you signing when you take money from a lender? Ask questions to really get to the bottom of what is happening from both sides of the bargaining table. What are your responsibilities? Are you able to handle the payments every month? How does this loan fit into your budget? If you can’t reasonably pay back the money, then don’t enter into the agreement. Put off the purchase until you can handle the loan responsibly.

2. Get "monthly" out of your head. This single aspect of credit buying represents the biggest problem for most people. This is the tactic most salesman use to rope in a client. They talk only about the "monthly payments" as if this is the only factor. We hear only the monthly amount, it doesn’t sound too expensive, and we sign on the dotted line. Our shortsightedness will lead to disaster. Think long term – to the end of the loan period and think of the total amount of the loan. If these numbers can be handled easily, then you are probably going to be able to pay it back.

3.Never borrow if you don’t really need to borrow. Use cash whenever possible to avoid having to pay interest. Save up for large purchases and hold off whenever you can in buying expensive items that you may not really need. In short, learn to be responsible for your actions and decisions. If you need a place to live, however, then getting a mortgage loan makes sense. In the case of housing yourself, buying is preferable to renting. Renting is throwing away money because you will never get it back later on. Buying a house makes sense because, when you sell it many years later, you are likely to get your money back and something extra. For a large purchase then, using credit is wise.

4. To save money with credit, be responsible in using it. Only use credit when there is no other way to accomplish buying what is absolutely necessary. Never, for example, use credit to buy groceries or other household items. Reserve the credit card for things like emergency medical bills, or to maintain your home in case of breakdown of appliances, or to replace something in the car that wears out. You will save money by not using credit and by using credit judiciously.

If you are employed, sooner than you think will you be at retirement age. Hopefully you have a plan in place that will work for providing money in retirement. However, your plans may not be enough when you take into consideration the horrible economic times we are in and the fact that the government is so corrupt that we all are in danger of losing everything that we have. Be smart, start saving your savings.

By now the hangover has worn off and we are finally waking up to the reality that we have another whole year with which to deal…

Health insurance has taken a permanent place in the evils befalling all of us in this society. You don’t have a choice anymore; you must pay for something whether or not you will use it. There are many facets to this dilemma and there are a few solutions that we can try.

Finally some good news! It seems that many of us are starting to listen to the good advice of writers and economists who have been telling everyone to reduce spending, to repay debt, and to save, save, save. Some people, at least, are starting to gain equilibrium in their personal finances.

The key for most of us who want to make more money is to roll up our sleeves and to do more work. There’s always a get rich quick scam available to trap us into going for the “easy money”. If you’re not one of the lucky ones, however, it doesn’t work that way.

There’s always a way to find money to save. Most of us would argue the point, citing the many bills and expenses that we have that are overpowering the money in our paychecks. Still, we must live from day to day, month to month on what we bring home. With a bit of common sense, and a pencil and paper, we can certainly save something for emergencies that we hope and pray never come.