Managing Money God’s Way

I was thinking today about some of the stupid money mistakes I have made over the years and wanted to share with everyone some of those “hazards” and some simple remedies you might think about using.

Credit Card Debt Mistakes

• Impulsive purchases (buying what you can’t afford/not using budget in spending decisions).

• Acquiring multiple cards (exceeding manageable credit limit).

• Carrying a balance and/or making minimum or late payments.

• Using cash advances on one card to pay another.

Credit Card Remedies – Before you buy!

• Use Impulse list.

• Ask yourself, “What does it really cost?”

• Avoid the dangers of consolidation loans.

• Obey the 3 Laws of the Least to minimize borrowing cost:

Borrow the LEAST AMOUNT possible (Most effective)

Borrow the LEAST PERCENTAGE RATE possible (Least effective)

Borrow for the LEAST TIME possible (Moderately effective)

Automobile Mistakes

• Not calculating the total costs (purchase based on monthly payment rather than the financial setup).
• The leasing trap.
• Frequent turnover.
• Lack of maintenance.

Automobile Remedies

• Compute purchase price over the life of the loan; consider insurance and maintenance. (after warranty period)
• Retain vehicle well beyond loan expiration – continue making payments to your account to prepare for the next purchase.
• Downscale your car(s) to reduce debt.
• Purchase is generally favorable to leasing.  Purchase pre-owned vehicle.

Housing Mistakes

• Buying too much house – not calculating total cost (limits ability to balance the budget).
• Buying without an operational budget.
• Borrowing the down payment.
• Buying one before selling the other.
• “I need the tax deduction.”
• Unstable life or work.

Housing Remedies

• Compute all cost to include payment, insurance, taxes, closing costs, maintenance, improvements, life expectancy of appliance, etc.
• Ensure total cost fits within budget allocation for housing.
• Rent, if necessary, while saving for more down payment.
• Receive the same tax deduction by giving instead of paying interest.
• Resist home equity lines of credit.
• Prepay the mortgage.

That’s it for today.  Some simple mistakes we all can/do make and some simple ways to avoid them.