11 Tips for Financial Health
I am a regular
reader of Moneyville, a fantastic online resource for personal finance tips and
tricks. They have recently shut down and re-opened as the Toronto Star's
personal finance. The editor was recently asked by a reader what were the best lessons
he had learned in the 2 and a half years of Moneyville's existence. Here are
his answers; very solid advice is you ask me!
That's why it's a good idea to start
saving early, as soon as you get a first job.
I wish someone had told me that.
2. Nobody wants you to save except
you, which is why it is so hard to do. payroll deduction is a painless way to
get around that. You lose it before you see it and so don't miss it.
3. Low interest rates are not necessarily good. They may have saved the
developed world from Depression in 2009, but they're punishing savers and
encouraging people to spend beyond their means.
When rates rise so will mortgage
payments, house prices will fall, the economy will slow and people will lose
jobs. Now's the time to get your financial house in order.
4. Paying off a 19.99-per-cent credit card debt with a 3.5-per-cent line of
credit doesn't count as good financial management. It has switched
high-interest debt for low — and unless you pay off the credit line that hole
just gets bigger.
5. It's alarming that people think lines of credit are an asset. But if the
bank gives you a $100,000 credit line secured by your home, you are not
$100,000 richer. . It's a liability. The moment you start using it, it's
something you owe, a debt that has to be repaid.
6. Ask and you will likely receive. You'll never know how much better a deal
you can get unless you ask. If you're a good customer, you will likely get
something.
7. Fees are a fact of life. Choose ones you want to pay and revisit them
periodically. If you bundle services you can get a break. If you're a good
customer you can make a deal. If you're polite you're more likely to succeed.
8. If you want a discount or think you deserve a break, have proof of the
better deal elsewhere. The more knowledgeable you are the better your chances.
9. You may want things, but you don't necessarily need them. Wealthy Barber
Dave Chilton said people who live within their means tend to be happier for the
obvious reasons, but also because they are not “consumed with consumption.”
Saying “I can't afford it” is not an admission of failure.
10. Good customer service is hard to come by. My gold standard is Amazon.com.
When my two-year-old, out-of-warranty Kindle stopped charging, I called for a
diagnostic. Within five minutes a tech support rep had confirmed it couldn't be
fixed and passed me over to a customer service rep who, without asking, shipped
me a free Kindle. It was at my door two days later. They called me by my first
name and didn't treat me as if I was trying to get something for nothing. They
valued my custom. Now I'm telling you about it.
11. I wrote a column 2 1/2 years ago that said personal finance boils down to
spending less than you make, saving the rest and revisiting your plan
occasionally to see if it's working. I think that still holds true.
Comments
Post a Comment