I thought everyone knew how to balance a checkbook. I thought everyone realized you need to anticipate major payments. I thought everyone knew how to manage their money. I thought these things were taught to everyone because my parents taught me.
I should have known all parents are not created equal.
Because of that, let me share a few helpful hints on how to save yourself some financial grief and protect your credit (and hopefully we all share with our own kids):
- Every item you pay for with a card doesn't come out of your account immediately. Sometimes it takes a week. Sometimes it is that night. Whenever it comes out, you CANNOT count on your bank balance being accurate.
- Keep your receipts until a payment shows up on your account.
- Write every amount in your ledger (or other accounting tracker - spreadsheet, app, whatever).
- Make payments on time. If you can't, contact the company. They may be able to help you. If you don't do either of these things, your credit is definitely going down and you may be charged fees (Sucks being poor, doesn't it?).
- If you are forgetful, auto payment is a life saver. That said, you need to anticipate the payment. Set a reminder a week in advance letting you know when the amount will be withdrawn so that you don't spend money that is already spoken for.
- Never spend more than you earn. Duh...but a lot of people do. To help prevent this, make a weekly budget. This may take some research and time to figure out, but it will help you in the long run.
- Pay cash. When you have cash, you are more aware of how much you're paying for things and how much money you have remaining. It helps curb your spending.
- If you have a credit card, keep a low balance. Don't pay it completely off because that will ding your credit (weird but true).
- If you have big payments, check to make sure they go through. If they don't, you need to contact the company you were paying. Something may be wrong (and you don't want to be charged a fee or get your credit dinged).
- If you have big loans, try to make as large of payments as possible to pay them down as quickly as possible. The sooner you pay them off, the less you will pay. This is because compound interest will suck you dry over the life of a loan (Ah! Another way rich stay rich and poor stay poor!).
- Sales are not always good ideas. A sale is only useful if it is an item you actually need at a price you are able to spend that is lower than you can get elsewhere. Sometimes a sale price at one store is higher than a regular price for the same item at another store.
- Never buy something you don't need, no matter how much you want it, when you have other things you need. Health, food, and shelter always come before a fancy pair of heels or multi-function knife. Always.
- Health, food, and shelter always come before pets, entertainment and addictions. Diapers and cereal are more important than cable or alcohol or cigarettes. This should be a nobrainer, but some people have no brains soooo....
- Communicate with your partner and children about money. It will save everyone a great deal of stress and heartache and false expectations.
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