Money Talk Matters

Posts Tagged ‘economy’

Couples are discovering hidden talent and becoming craftier as they plan for their weddings. Due to the economy, weddings have been turned upside down by the recession. I have read story after story, including this one that says Couples are saying I Don’t to Expensive Weddings

I congratulate every couple that is realizing what is happening with the economy and choosing not to overspend. I encourage these same couples to take it one step further and invest in financial education skills for the lifetime of their marriage. Why you are making compromises for your “Dream Day”, think bigger and think about the day, the months and years after your wedding.

Money is a topic that should be discussed even know in a larger context beyond the wedding day. For example, the bride and groom should be asking each other, what financial obligations are you bringing into the marriage that I am not aware of? Are you a shopper or a saver? Those are only the beginning.

Talking about money in depth while you are preparing to walk down the aisle cannot hurt your relationship. It can actually help your relationship because you are choosing to be transparent and not hide anything from your respective bride or groom.

Interestingly enough I was thinking about writing a post on cash versus credit when I was asked this very thing on twitter last week. Therefore, I know “ears and eyes” are waiting on this response.

Everyone in some capacity knows about the “wrath” of Credit. There comes a point when every consumer must ask themselves which is better for me right now – Cash or Credit? Let me say right now, that regardless of what the economy is doing, cash should be the first choice. Cash because when you make a purchase – you own it. There is no interest, no chance at make a late payment and incurring other debt.

Cash says that you have established your ground rules for your household. That regardless you will stay within your boundaries and not incur debt.

When you Buy on CREDIT below is what begins to happen:

1) The message is sent saying I am going to have that job to pay this bill in the future. Hmmm is this true or false?

2) The door to financial stress in the household is now open. Let me explain even more. Debt does not generally occur overnight. All the small charges add up over time and become unmanageable when we use one or more credit cards. That is when financial stress and strain creep in.

3) Whether single or married, personalities change when unmanageable credit card debt has crept in. You allow your emotions dictate your life. This leads to spur of the moment decisions without considering the long-term consequences. Incidentally the person on the other end who you are directing your emotions at either get hurt or disgusted. This causes distance.

When you CHOOSE to purchase by cash, it has benefits such as:

1) If you purchase your groceries by cash, you will more than likely look compare what is on sale with what you normally buy. This way you can see which is the bigger bargain and if the sale item is really a sale. Result: You might find that you spend less and have extra money left over. This money can be applied towards something else.

2) Purchasing by cash causes you to budget your money accordingly and not impulse buy. Using cash should keep you from purchasing large ticket items that are a Want versus a Need.

3) If you are married, this can remove financial stress because now you have extra money. Every little bit adds up. You can put it towards a bill or a joint financial goal.

Which will you choose today?

Let’s have some fun this morning and enlightenment at the same time. Remember when you were young and we rode the bus to school. The bus would come to your house and you would get on the bus and talk with your friends all along the ride to school. Some mornings you wanted to talk and some mornings you might have been sleepy. Yet, you rode the bus. Once at school, you attended school and at the end of the day, you got back on the bus to return home.

 

Later in life as an adult, you might have rode the city’s transportation system which was a bus to the mall, work or if you were visiting another state and that was the best mode of transportation you rode the bus. So a bus has been integral in our lives. Now that you can relate and understand the bus – let’s take it one step further.

 

Today, I want to talk with you about the “Financial Bus of Life.” Regardless if we are in a recession or the economy is up, there is a financial bus in your life. When you were in elementary school through high school, even as a young adult the bus I talked about represented a mode of transportation that got you from one destination to another. For this post it will be a little different.

 

When you think of a bus what is the first thing that comes to mind? I know for our twins they would think it is big and yellow. For someone else it could continue being that mode of transportation to work or shopping. When we are talking about the financial bus – I want you to think about two things – the passenger and the driver.

 

Now when you think about “The Financial Bus of Life” what have you been doing? The role of the passenger is sitting on the seat and watching things happen in the area of finances. Mismanagement of funds happen, overspending happens, maxed out credit cards, financial mistakes happen because of a lack of knowledge. Consequently, the cycle of debt starts and repeats itself. We sit on the seat and watch it happen over and over. We do not want to talk to anyone because we are embarrassed. Also, we lack the will to change our situation.

 

Another character in The Financial Bus of Life is the role of the driver. The driver is the person that no matter what has happened in their finances, they are taking control. They refuse to sit on the seat and watch things happen to them. They are the ones that have made a CHOICE to CONTROL their finances and make healthy financial decisions regardless of what is happening around them. The driver has and is working his or her plan to pay the bills and alleviate debt. The driver does not get influenced by peer pressure or The Joneses. Let me share a secret, there are drivers that were passengers at one time.

 

One of the big differences between a driver and a passenger is the passenger usually lacks the will to change their situation. That can be due to their mindset, used to being a complainer without action and also surrounding themselves with people who think just like them. The driver is going to take action to reach the desired financial result.

 

Are you a driver or a passenger in The Financial Bus of Life?  

Last night my husband and I were talking about the housing market and the banks. He was sharing with me how he heard this one woman was saying she tried to be proactive and before her financial situation occurred, she contacted her mortgage lender.

Lender’s response: They did nothing.

Why did they do nothing? Because her mortgage was current and on time.

Result: Financial situation occurred and she got behind four to six months I believe.

Her Next Move: Contact the Lender

Result: Did not help her out because she did not meet that criteria.

My husband was disgusted. I told him there are people out there in her same position. They have taken steps to be proactive and the mortgage lender has shunned them because their situation did not meet the criteria for help. Was not drastic enough because their payment history was exemplary. Then when they got behind a little and asked for help – met with a closed door.

I’ve heard similar stories from people personally that this happened to. What this says is that you have to CREATE your own BAILOUT. When it was announced that we were in a recession, the economy had already been in a recession. Once it was “VERBALIZED” then it was like a domino effect.

I feel comfortable in saying that everyone who is having financial issues and not able to pay their mortgage now, did not spend recklessly, take elaborate trips and etc. More than likely what happened is they were coasting along, paying their bills just fine and then all of sudden the word “RECESSION” was verbalized and work started drying up (if they worked for someone else), orders became less and less (if they owned their own business). Now they were in the position of having to decide pay this or pay that which they had not been in before.

First step in creating your own bailout: Re-evaluate all of your household obligations and be honest with yourself. What do you NEED? Are there subscriptions that you have that you do not benefit from?

You are the one that has take action for your benefit. Take action today.

Earlier this morning when I was doing some research, I read a story stating that CBS News did a poll recently. One of the items that stayed with me is that parents have had to tell their children they could not afford something. This might have been the first time they have had to say this. The story shared that some kids were upset.

The economy is having an affect I am sure that many did not expect. I like to see it as an opportunity to get financial houses in order. Take this time to reevaluate spending patterns and see where an adjustment can be made. That does not necessarily mean you cannot splurge. What it means is take your time and pick and choose how you are going to splurge.

One thing I do like about this is that parents are discussing money with their children, not necessarily by their choice; however they are including them. Whereas if this were not happening right now, they probably still would not have been included. I encourage you if you are reading this to talk with your children today about money. Talk with them on a level that they can understand. You can never start to early.

Think of all the advantages of teaching children now about money. It can prevent financial mistakes and teach them how to make their own decisions, not give into peer pressure. Let’s be honest, sometimes that happens when it shouldn’t.

Our twins are very conscientious about spending and saving their allowance. It makes us happy that they are taking into account the consequences of spending and saving. They are seven years old. Money talk matters regardless of age and can impact households in a positive way.

I wonder what would happen if for six months – families decided to take on this motto: Do not SPEND what you do not HAVE! Would that in itself create a bailout for some or not.

Day in and day out life happens. We talk about things on the news, friends and relatives. We talk about our children, neighbors and even our jobs. Yet, when we talk about money it might not necessarily pertain to our situation. We talk about we need to buy this or that and usually that is the extent of the conversation.

With the economy being as it is, couples and individuals are being forced to communicate about money. What is interesting is some do not even know where to start or how to have the “Money Talk”. There are couples that have been married for years and have paid the bills, bought houses, cars, etc yet the “Money Talk” has not been what it should be.

Now is a prime opportunity to begin a new foundation and establish the “Money Talk” for your relationship. Regardless of the economy, Money Talk Matters for one simple fact if nothing else, that is money has many roles in our lives. It is not something to be taken lightly but necessary in every day life.

Begin the “Money Talk” today and recognize that it is not a one time conversation. It is an ongoing conversation. Take the first step and start today. You are welcome to post your comments.