By Larry Winget
continued from yesterday...
7. Wants vs. needs vs. can’t-live-withouts.
Great lessons for everyone for sure!
8. Money is good.
There is more wrong about not having money than with having money, and anyone who says differently has never had money and probably will never have any. It takes money to build hospitals and help people in need. You can’t do a damn thing for people when you are broke! Poverty is the enemy — not wealth.
9. Money is not more important than people.
10. Money gotten dishonestly is never worth it.
11. Money carries responsibility.
12. Money is freedom.
The freedom to do what you want, the way you want, when you want, and with whom you want. That is the ultimate benefit of having money.
If you do all of these things, will your kids grow up to handle their finances perfectly? Maybe and maybe not. There are few guarantees with parenting. However, don’t do these things, and you hinder your kids and impede their overall success in many ways. All the best to you and your kids!
Will That Be Cash or Credit?
Here’s another area of finances that both you and your kids can learn from. When faced with this question, sadly most people go for the card. I love the excuses they offer me for why they use credit cards instead of cash. In fact, let’s quickly look at some of the more popular excuses:
1. Convenience. Credit cards are more convenient to carry than cash. There are even television commercials that depict how using cash slows down the lines while shopping. (That’s because most clerks aren’t smart enough to count change!) My response to this excuse: BULL. Cash doesn’t take up much more room in your pocket or purse. And it’s faster and easier to use in nearly every transaction. Don’t be a sucker.
2. Safety. People think carrying cash makes them more susceptible to getting mugged. BULL. If a mugger sticks a gun in my face, I don’t want to have to say, “I don’t have any money; do you take MasterCard or Visa? American Express? Discover?” I want to hand him a wad of cash and have him smile, say, “That was easy!” and be on his way.
3. Expense tracking. It’s easier to track your expenses when you use a credit card because you get a statement every month. BULL. The fact is that very few actually track their expenses, and that’s basically part of everyone’s financial problem to begin with! As for being unable to track expenses when you use cash, that’s what receipts are for.
4. Cash back. BULL BULL BULL. Yes, you get cash back when they use your credit card in some cases. But do the math. Spend $10,000 on your credit card and you will get back 1%. That’s $100. The interest on the $10K is $100 only three weeks into your deal. If you believe you are smart trying to get cash back, you are instead an idiot. Get a clue… buy a clue. Just don’t put it on your credit card!
5. Airline miles. I get free trips! BULL. Tried this one? Good luck. If you are willing to fly middle of the week, middle seat, middle of the night with four connections, this will work great for you. I’m not willing.
I am not anti–credit card. I am anti–credit card abuse, misuse, and overuse. And one of the best ways to avoid credit card problems is by carrying cash. When the cash is gone, you’re done. Easy plan for managing your money: No money-no shoppey. So carry cash and keep the cards for what they were intended for: the convenience of use when traveling for hotels and rental cars — not a candy bar at the convenience store.
Why don’t people have cash in their pockets or purses any more? I love a pocket full of bills. I even like my big ol’ jar of change that sits in my closet. I like the way it makes me feel. Don’t start in on me about how my self-worth shouldn’t be tied to cash — it isn’t. I grew up without much money in my family, and now I actually enjoy how a wad of cash in my pocket makes me feel. Plus, I’ve learned that cash in my pocket is smart from a financial perspective. Yes, cash is smarter than credit cards and not just because of the fees and interest rates and impact on your credit future. It’s smart for lots of reasons, but here is the best reason I can think of to use cash instead of a credit card.
When I use cash to buy something, I feel a sense of loss. In fact, I created that loss by using cash. My wad of cash is now smaller as a result of using it to purchase an item. My pocket is a little emptier. I’m a little lighter. I have fewer items (bills and coins) than I did before I bought the item. In other words, I realize that I actually gave something up in order to get what I wanted. It was an exchange of items — my cash for their stuff. This is a positive impact that the use of a credit card cheats you of. It was a contract, an agreement brought to completion on the spot when the transaction took place and the exchange of cash was made.
When you use a credit card to buy something you don’t get any of that. Nothing about you changes. Your credit card is the same after they swipe it as before they swipe it. You aren’t lighter, as the card weighs the same whether it’s never used or used a hundred times a day. You don’t have less after you use your card; in fact, you have more. You didn’t exchange your stuff for their stuff, as you got your card back and you got the stuff. You feel like you got something for nothing. And the transaction is not complete, the contract is not fulfilled, all because the use of a credit card is a “promise to pay” — it is not payment. At least not as far as you are concerned.
Your first response to my statement is probably something like, “Yeah, until the bill shows up.” Again, I say BULL. Few people bother with their statements or care that much that their debt in racking up until it’s damn near too late to fix it or they hit their credit card limit. Don’t give me “when the bill shows up” argument. Plus, many people pay their credit card statements as automatic payments through their online banking and don’t even look at their statements and can’t even tell you how much they owe. Most can’t even tell you what they bought this month on their card. Those are the facts.
Okay, you get it. No need to beat a dead horse on this one. Carry cash and keep your credit card to reserve your hotel room on your next vacation!
No comments:
Post a Comment