Last week we looked at the key financial principle of paying yourself first, by saving some of the income you earn. Like our Jamaican proverb advises, “Parson christen ‘im pickney fus,” which means that a parson takes care of his child first, so should you prioritise your own financial affairs.
When your income is stretched to the limit taking care of bills and other obligations, it may seem impossible to find an extra dollar to put aside for the future. Recognise that if all your money is spent paying other people, then you really have nothing to show for all of your hard work.
Slow savings – a waste of time?
It may require you to make a big sacrifice to save consistently, and to be disciplined not to deplete your funds unless you have a true emergency situation. However, when you look at the slow progress on your savings growth, you may be tempted to wonder if your sacrifice is pointless. Continue reading Jamaican Style Money Guide – Every Mickle Mek A Muckle
Last week we discussed the role that saving plays in creating a secure financial future. Saving helps you to develop the discipline required for money success; experience money accumulation, not just money attrition; amass emergency funds; and build a solid base to boost your investments.
An important part of planning for your finances involves determining areas of risk which could potentially jeopardise your ability to realise your objectives. Once you have identified these factors, you need to implement strategies to avoid or mitigate these problems as best as possible.
Like any other aspect of your finances, your savings are subject to certain dynamics which can put your money at risk. Let’s examine some of the various situations and challenges which have the potential of crippling your savings goals. Continue reading Defending Your Savings
I recently overheard two shoppers discussing the high price of groceries at the supermarket. One lamented that she had to discontinue her son’s college savings plan as it was costing her more each month to buy the necessities. “Right now, it just doesn’t make any sense to save,” she complained.
Rising inflation levels and reduced interest rates have definitely curtailed the ability and willingness of many people to save. When they have to make a choice between paying the bills and putting aside money for the future, their current needs will always take precedence.
Some people believe that the money tradition of saving has gone the way of phone booths and floppy disks — an outdated and old-fashioned relic of times gone by. They declare that it is more money-savvy to invest their cash than to leave it languishing in low-interest bank accounts.
Despite the realities of tenuous budgets and unattractive returns on savings, there are many reasons why the practice of saving is still an essential financial habit to adopt. Let’s look at some considerations that will help you to make sense of saving. Continue reading Making Sense of Saving
“After reading your article about bad debt last week, I realized that I’m trapped in a cycle of debt. I have been taking our loans over the past six years. Each time I clear off an old loan, I borrow even more money which typically is used to purchase some unnecessary household item. I now owe about three times what I did when I originally started borrowing. Please help me to break free of this debt!”
The current growth in consumer debt has its pros and cons. On one hand, it’s great for the economy, as profits of the lending agencies and retailers increase when people’s appetite for debt grows. However, on the other hand, there are more reports of consumers who are suffering under a debt burden that they find hard to bear.
As we have been discussing recently, there’s ‘good’ debt and ‘bad’ debt. Debts that are financially beneficial are those that can provide you with some monetary advantage in the future; while borrowing to sustain a lifestyle that’s beyond your means will definitely lead to financial challenges.
So if you’re stuck in a cycle of spending and debt, what can you do to break free? Follow the steps below to start your journey towards freedom from debt. Continue reading Breaking Free of Debt
“I spent too much money last Christmas on gifts and parties. I had expected a good bonus cheque which never materialized. Now I’m stuck with over J$60,000 in credit card debt, and I don’t have a clue how I’m going to pay it. Help!”
Christmas is a time when even the most disciplined shoppers throw caution to the wind and reward themselves for a year of frugal living. Those who live to shop go into overdrive and buy all the must-have and must-give items without a thought for January.
You learnt the hard way not to count your chickens before they hatch. In order to be a good money manager you must earn a dollar before you plan to spend that dollar, as spending money that you don’t have will only land you in debt.
Before we try to find ways to get you out this debt, let’s look at the true cost of your Christmas spending spree. You admit that you spent too much money. When you look back at the things you acquired, was it worth it?
Do you even know if your gift-giving was truly appreciated?
Continue reading Christmas Bills Blues
“Help! I moved out of my parents’ house six months ago, and I’ve run up balances of over J$90,000 on three credit cards since then. I had to buy things for my apartment, and I think I went overboard. I can now only afford to pay a few thousand dollars every month on the cards, and seems like it’s taking forever to reduce the balances. What can I do?”
You’re not alone in your credit card crisis. News reports have indicated that credit card use in Jamaica has grown significantly in recent times. The resulting increase in credit card debt has left many customers feeling desperate for solutions to get rid this seemingly endless liability.
Credit cards are not necessarily bad- they can be an extremely convenient way to pay bills, or to provide funds in the case of a sudden emergency. However, a credit card can be like an out-of-control racehorse who has thrown its rider, if proper money management skills are not used along with this convenience. Continue reading Credit Card Crisis
I’m 19 years old and I just started working. All I can manage to save at this time is J$500 per month in my credit union. Sometimes I wonder if it’s worth it, as my savings seem to grow so slowly. I feel tempted to just spend this money until I can really afford to save more. What you would advise?”
Congratulations on your decision to start saving some of your income, regardless of how small you think it is. Don’t discount the value of your current savings effort. Remember the Jamaican adage – “Every mickle mek a muckle.”
In financial terms this means that you should be content to save the little you have over time, and eventually you’ll get all the money you need.
Last week we looked at three keys to starting a savings plan and ensuring its success: pay yourself first, save at least 10% of your salary, and use automatic deductions to save consistently.
Once you’ve gotten into the savings groove, how can you make your money really grow faster?
Continue reading How Does Your Money Grow?