Greetings all,
If you watch the news, listen to radio or surf the internet you have inevitably heard or read about one of two things…the upcoming Presidential election or the economy. Both of these subjects are historical in nature and even though I am throwing my financial support and efforts behind the Obama/Biden ticket, I am not writing this blog about politics and the change I want to occur on November 4th! This particular blog is about the pending recession (depends on who you are asking?) and what common cents is forcing me to do in order to take care of my family. I speak from the stand point of “head of the house” and I am certain that what we are encountering in my house is being felt in households all over the nation.
Tightening the Budget
One of the things I tell my wife all of the time is that money does actually grow on trees (since money is made from paper and paper comes from trees) but we do not have one of those type trees growing in our back yard. I say this to her all of the time when we are addressing budget issues in the household which is almost daily now. At the beginning of each month and week, I show my wife how much money we have in the budget to handle our affairs and we discuss where we can cut back. Ultimately it comes down to a discussion of “wants and needs”. Basically, my position is, “if it is a want then we don’t need it”. It is my wife’s position to try and get me to be more flexible when assessing wants and needs. Now we have been married for 8 and a half years and she knows that most decisions for me are based on rational thought not emotional ones. This being the case, all non essential spending has been cut out. This means no going out to dinner or movies for the time being and I have cut out my daily mountain dew soda which cost $1.49 with tax. The mountain dew example is the point I make to my wife in showing her how this small sacrifice makes a big difference in our budget which becomes an approximate $45.00 savings per month and a $540.00 savings per year. I then go to our separate checking accounts where I deposit our allowances (we have a separate account for our bills and yet another for our savings etc.) where we discuss/argue on where we can cut back more. At the end of the discussion/argument, we agree on finding additional ways to save money by changing our spending habits. I pointed out to her that she could save money by getting cash back when making a purchase at the grocery store versus going to a non-affiliated ATM to get money because of the ATM fees associated with each transaction which averages @ $4.00 per transaction. In the past, she would frequent an ATM 2-3 times per week thus paying as much as $12.00 per week and @ $48.00 per month in unnecessary fees. She saw my point and now looks for other ways to save. This month we found a way to save an additional $300.00 in our budget which goes a long way in this pending recession! I share this testimony with you and challenge you to do the following by asking you….
Do you think we are in a recession?
Do you have a realistic budget?
Where can you find $100.00 or more in monthly savings?
Now that you have answered those 3 questions what are you going to do next?
Monday, October 27, 2008
Saturday, October 18, 2008
Common Sense and Critical Thinking
Greetings all,
Common sense by definition is practicing sound practical judgement that is independent of specialized knowledge or training...to exercise normal human intelligence. Critical thinking by definition is the process of actively and skillfully conceptualizing, applying, analyzing and evaluating information to reach an answer or conclusion. How do the two of these actions go together as we deal with our financial decisions? Let me be more specific, some people when faced with a financial bind turn to pay day loans, overdraft accounts, and credit cards as the solution to get out of that financial bind. What I would like to understand is why does an individual turn to the afore-mentioned as the answer to the problem? Are they wrong in making such a choice? Am I wrong for asking the question? Why are check cashing and pay day loan companies only in certain neighborhoods? Are they the enemy? Let me make my case concerning these options using common sense and critical thinking!
Common sense tells me that the last place that I would want to go to get out of a financial bind is to a pay day loan, check cashing or a credit card because of the interest rates these companies charge for borrowing there money. In addition, the relief you get from taking out the loan is only temporary thus the only thing that you have accomplished in most cases is delaying the inevitable. Once you have traveled down the path of borrowing money in this manner, it is hard to go back...in some peoples case they can never go back. Thus, they suffer the consequences by having a judgement filed against them, their credit being negatively impacted and ultimately your decisions concerning your finances are dictated to you versus you being in control and making an informed decision.
Critical thinking tells me that if I were to take a moment to analyze my situation maybe just maybe there is a better solution. Maybe I could call my creditor an tell them that I am in a financial bind and I would like to offer a solution that I am sure that they the creditor would accept as long as the solution is reasonable. Now lets compare the benefits of common sense and engage our critical thinking.
Benefit #1
By calling the creditor to offer a solution, you are showing the creditor that you are a responsible account worthy of doing business!
Benefit # 2
Calling the creditor with a solution is often cheaper than going to the pay day loan company!
Benefit 3
The permanent relief you will gain by attacking the problem responsibly far out weighs the temporary relief and subsequent charges you will pay from going for the quick fix!
Finally I would like to ask you the reader this, is the pay day loan company the problem or is the way we have been conditioned by society and the economy the problem? Who is the real enemy? What does common sense tell you in this situation? What does your critical thinking tell you?
Common sense by definition is practicing sound practical judgement that is independent of specialized knowledge or training...to exercise normal human intelligence. Critical thinking by definition is the process of actively and skillfully conceptualizing, applying, analyzing and evaluating information to reach an answer or conclusion. How do the two of these actions go together as we deal with our financial decisions? Let me be more specific, some people when faced with a financial bind turn to pay day loans, overdraft accounts, and credit cards as the solution to get out of that financial bind. What I would like to understand is why does an individual turn to the afore-mentioned as the answer to the problem? Are they wrong in making such a choice? Am I wrong for asking the question? Why are check cashing and pay day loan companies only in certain neighborhoods? Are they the enemy? Let me make my case concerning these options using common sense and critical thinking!
Common sense tells me that the last place that I would want to go to get out of a financial bind is to a pay day loan, check cashing or a credit card because of the interest rates these companies charge for borrowing there money. In addition, the relief you get from taking out the loan is only temporary thus the only thing that you have accomplished in most cases is delaying the inevitable. Once you have traveled down the path of borrowing money in this manner, it is hard to go back...in some peoples case they can never go back. Thus, they suffer the consequences by having a judgement filed against them, their credit being negatively impacted and ultimately your decisions concerning your finances are dictated to you versus you being in control and making an informed decision.
Critical thinking tells me that if I were to take a moment to analyze my situation maybe just maybe there is a better solution. Maybe I could call my creditor an tell them that I am in a financial bind and I would like to offer a solution that I am sure that they the creditor would accept as long as the solution is reasonable. Now lets compare the benefits of common sense and engage our critical thinking.
Benefit #1
By calling the creditor to offer a solution, you are showing the creditor that you are a responsible account worthy of doing business!
Benefit # 2
Calling the creditor with a solution is often cheaper than going to the pay day loan company!
Benefit 3
The permanent relief you will gain by attacking the problem responsibly far out weighs the temporary relief and subsequent charges you will pay from going for the quick fix!
Finally I would like to ask you the reader this, is the pay day loan company the problem or is the way we have been conditioned by society and the economy the problem? Who is the real enemy? What does common sense tell you in this situation? What does your critical thinking tell you?
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