Thornhill Wealth Forum 

Personal Priorities

05/25/2012

0 Comments

 
A BMW with a payment prompts my pity rather than envy. However, if you have a paid-for home, I will likely sing your praises. This again speaks to personal priorities.

I think there is an assumption by people who don’t control their spending that those who do must not know how much fun it is to be them. What some spendthrifts fail to realize is that frugal people derive pleasure from different things. For example, Read More
Add Comment
 

Save Or Pay Off Debt?

11/19/2010

0 Comments

 
It's a common dilemma: Should you put all your spare cash toward paying down debt, or build up your emergency savings-or a little of both?

It's a serious question now. If you lost your job, the average length of unemployment is about 33 weeks-or eight months. That means your emergency fund must be a priority.
But should it come first? Let's run some numbers.

Your monthly expenses: $4,000 
Your debt: $5,000 on a card at 14% interest 
You have: $500 to apply to debt, savings or both each month.

If you stashed $400 each month in your emergency fund, and made only the minimum payment on your card-that's $100, assuming a 2% minimum payment-it would take you more than six years to build up eight months' of expenses ($32,000).
And you'd still owe about $2700 on your card.

Now let's flip it. If you put $400 per month toward your card, and $100 toward savings, you'd be debt free in about 14 months-and you'd have a tidy $1,400 start to your emergency fund.

Now that's real savings, on every front.
Add Comment
 

Toilet Train Yourself to Financial Freedom

11/19/2010

0 Comments

 
Our economy probably needs us to shop irresponsibly again and “live beyond our means” in order to give the economy a boost. I never understand why  North Americans are the only people where the average resident consumes more than their income.
Some people blame the educational system for not having personal finance classes, but there are ways to learn outside of school too!  It’s not like my teacher taught me how to use the toilet.  I don’t know about you, but I learned because:
  • I had to (out of necessity) and was told about this fact
  • It never occurred to me that there was an alternative
  • I did it enough times so I could do it without thinking

Toilet Training (Personal Finance Style)

If you need to toilet train yourself again, here are some tips that expands from what I talked about above:
The Need to Save Money
In case you are lucky enough to not know the importance of saving money, let this post be the wake up call.  You need to save for your own sake!  Can you imagine what will happen if you lose your job and can’t find work for 6 months?  How will you pay for your mortgage?  Do you know what it’s like to live in your car?  Do you know how cold it gets at night if you live off the streets?

Stop Getting Further Into Debt
It’s so strange that so many people just borrow, borrow and borrow.  It didn’t matter where either, be it credit cards, home equity line of credit, RESP or others, people just keep taking out money they don’t have!  I just don’t get it, but why does it seem like rocket science to buy something only if you have the means?
Do you really need that car, the TV, or even that new pair of shoes?  What happened to what you already have?

Knowing What to Do with Money
Without getting into details, you know what to do when you need to go.  Money is exactly the same way.  Once it becomes second nature to save, you just do it.  You don’t think, you don’t regret and you certainly don’t ask why you save.

Getting started is always harder though, so here are some common tips that always works:
Save up all the income you receive as soon as it gets into your bank accounts
Treat your savings like a high security vault that requires maximum clearance before you ever withdraw
And best of all, lay out a logical plan (if you want, consulting with someone else could work too) so you can just follow it.
At first, you might not be perfect but with practice, everyone can become an expert!

Hey, no one is toilet trained when they are born.
Add Comment