Monday 12 June 2017

Do You Want More From Your Money?

It is very much central to the human experience that we want more. We're never full; we've not played enough, we haven't done enough - we always want more, and there's not much that can be done to quench that first we have for life - and we never seem to grow out of it. That's ok though - as long as we know that some things are out of reach, we can rein ourselves in just a teensy tiny bit and be glad with what we have and make the most out of what we currently own.

Now, we speak about money a lot on this blog, don't we - and there is a big reason for that. Money is very much something that revolves around the idea of parenting. As much as you are a great Mom - you're also a banker (and a cleaner, and a chauffeur to add to your many roles) and for good reason - you're the only person responsible enough to ensure the financial security of your family.  Can your baby look after it? Of course not! You're in charge of the bank account, and you know what, that can be quite a dangerous position to be in. Especially when we combine this paragraph with the first - if you're always wanting more from life and your money, how can you be trusted with looking after your money? Spending is the key to happiness and you've got the keys to your bank account. It takes a lot to not spend uncontrollably, especially when you want to give your family more in life.
With so many options at the hands of a parent for cash - including credit cards, payday loans and other options to gain money - it can be easy to lose control of your cash. In an effort to get the most out of life, it can be very easy to waste cash as well. That's why it is so important that any parent takes their responsibility as the family's bookkeeper seriously. We tend to speak a lot about making your cash last until payday on this site and as usual, there are plenty of reasons for that. The budget of the family has never been more stretched than it is today. With so much to buy and so many payment options, not only can our budget get stretched far and wide - we can quite easily rack up some serious debt.

One thing is true; you'll have a lot of trouble getting more from your money if you have racked up a bunch of debts. Why is that? Well, if you have debts of any nature, it is very likely that the interest of the debts will be higher than even the most generous of savings accounts or investment accounts. With a good investment at the very most you might expect a 15% return on your investment. Many debts have interest rates that start at 18% which means that even the lowest of debts has a higher rate of interest than the best investment you could possibly make. That means that in usual circumstances you'll make a net loss when you put an unpaid debt and its interest rate against an investment and its interest rate. That's not good news at all, but at least it can point you in the right direction - if you want to do more with your money and if you want more from your finances, you'll have to pay off your debts.

Paying off debts can be hard work. For this, we won't count the mortgage as a debt - more of a commitment, like rent. Even though the mortgage is a debt and it has an interest rate, if you're paying your mortgage off you're making an investment. Every other debt? It needs to be paid off as fast as possible. If you've got a number of debts, the work is harder and not just because you have more to pay off. You'll have a lot of admin tasks to do, and the biggest one of all is figuring out which debts to pay first. You might organize them by size and try to pay the biggest debt off first. What you should try to do is find a way to get your debts paid off as quick as possible and certainly, while you should consider the size and urgency of debts when focusing on any repayment plan, you might want to direct your attention to a debt with a bigger interest rate as it will only build in size if you ignore it. The next bit of admin after organization? Well, it's time for you to negotiate.
The thing is - debts can lead to bankruptcy and this usually means that a debt isn't paid off. Any creditor chasing a debt absolutely wants to avoid this situation as it means that they have wasted time and money. That means that you can certainly call up companies or people chasing you for a debt repayment and negotiate your debt to a manageable fee. This might mean that you pay a lower repayment off in total, or it might mean that the interest on your account is frozen. Either way, you can consider it a victory as it has made a debt easier for you to pay off. This is great news and all it took was a phone call. So if you need to pay off your debts to do more with your cash, then you need to consider picking up the phone.

Debt-free parenting is hard to achieve, but you can certainly do more with your cash. You could invest, you might even invest into the future of your kids by saving up for them. Simply put, if you are free of debts - you can have a lot more scope with your cash. You might put away more money towards your mortgage repayments or save up for a holiday, the point is - if you want more from your money you'll have to reign your spending in and be a responsible person, and a responsible parent. There's a lot you can do with money, but not if you're constantly spending!


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