Have you made numerous and monstrous financial decisions in the past? Money.com is looking for you if you’re willing to come out in the open with them. They are looking to profile someone “who has made absolutely disastrous financial decisions“. If you fit this description and you are willing to go public, you can email Steve Hargreaves
Both the Carnival of Personal Finance (#17) and the Carnival of Debt Reduction (#4) are live.
If you aren’t familiar with carnivals, they bring together posts from various authors on a specified subject. This gives you a good opportunity to sample a variety of posts from authors you may not have known about on that particular subject.
My contributions this week were The Avian Flu Virus – Getting Financially Prepared in the Carnival of Personal Finance and The New “Keep The Change” Program from Bank of America in the Carnival of Debt Reduction.
Lots of good reading to check out.
There’s an article over at Kiplinger – nothing really new, but I did find the first paragraph rather interesting:
America is the richest country in the world, yet, ironically, we have the highest percentage of people living paycheck to paycheck. A recent study from ACNielsen revealed that about one in every four Americans say they don’t have any spare cash. Without any wiggle room, it’s easy to see why so many people turn to credit cards to finance life’s little necessities.
There seems to be an overwhelming image that those who have large credit card debts do so because of extravagant spending. While this may be true for some, it’s not the case for all and more and more people are finding themselves in credit card traps that they never imagined they’d be in when the used the credit card to help tide them over in a tight spot.
Most people do have areas where they can cut expenses, but don’t realize it because they have gotten into a habit for so long that they have a hard time seeing what is a necessity and what is not. That is why it really helps to make out a budget and see where the money is going.
If you believe you’ve done everything you can, post your budget under an anonymous name in a money saving forum and let the member of that forum make suggestions. Most of them have been there and know where the excess fat lies. You’ll be surprised, but it can be done.
Once you relieve yourself from credit card debt, you’ll find yourself in a much stronger financial position and hopefully learn that those small tide over credit card charges cost a lot more than they appear.
Having a savings cushion is much more than simply having money in the bank. There is a sense of relief (not having to worry day to day how your going to pay for the next necessity) and empowerment (you have options when you have savings that you don’t when you’re in debt). I was having a difficult time formulating these all into a post when I ran across this piece:
The author is unknown, but it reportedly originated in a memo from the World Financial Group:
Your savings, believe it or not, affect the way you stand, the way you walk, the tone of your voice. In short, your physical well-being and self-confidence. A man without savings is always running. He must. He must take the first job offered, or nearly so. He sits nervously on life’s chairs because any small emergency throws him into the hands of others.
Without savings, a man must be too grateful. Gratitude is a fine thing in its place. But a constant state of gratitude is a horrible place in which to live. A man with savings can walk tall. He may appraise opportunities in a relaxed way, have time for judicious estimates and not be rushed by economic necessity.
A man with savings can afford to resign from his job if his principles so dictate. And for this reason he’ll never need to do so. A man who can afford to quit is much more useful to his company, and therefore more readily promoted. He can afford to give his company the benefit of his most candid judgments.
A man with savings can afford the wonderful privilege of being generous in family or neighborhood emergencies. He can take the level stare of any man … friend, stranger or enemy. That ability shapes his personality and character.
The ability to save has nothing to do with the size of income. Many high-income people spend it all. They are on a treadmill, darting through life like minnows.
The dean of American bankers, J.P. Morgan, once advised a young broker: “Take waste out of your spending; you’ll drive the haste out of your life.”
If you don’t need money for college, a home or retirement, then save for self-confidence. The state of your savings does have a lot to do with how tall you walk.
It does a good job laying out the fundamentals that I also believe to be true with getting ones finances in order and the benefits beyond the money itself that result.
Now if only I could have written it…
We went to visit our friends this weekend and I was playing with their young son when he asked me the following riddle:
“How do you eat an elephant?”
I couldn’t come up with the answer, so I finally asked him to tell me.
“One bite at a time!” he said laughing with delight
So what does any of this have to do with a personal finance blog? I think it’s an accurate illustration of how you begin getting your finances in order.
When you first begin to try to reduce debt, pay of credit cards and save an emergency fund it can all seem overwhelming and huge – kind of like an elephant. No matter how big the task may seem, however, the only way to tackle it is one step at a time.
While most people look at the elephant and say “it can’t be done,” and give up before they even begin, try starting off small – take a nibble here and a snack there on a daily basis. You’ll be surprised to find that taking all those little bites are taken over time, your elephant (debt) will disappear – one bite at a time.
The American Bankers Association has reported that credit card delinquencies are at a record level and put the blame on higher gas prices.
While I have no doubt that higher gas prices have affected the budgets of many people, it’s scary the number of people who are currently living on the edge. While I would expect that increasing gas prices would cause families to redistribute their budget money, it isn’t a good sign when it forces a large number of people to begin defaulting on their debt obligations.
Unfortunately, this trend will likely increase. Gas prices have risen significantly since the second quarter report and with winter just around the corner, the prices for natural gas and heating oil will put even more strain on budgets. Then there is the aftermath of Hurricanes Katrina and Rita that will undoubtedly have a huge affect on people who lived in those regions.