I recent had a conversation with a friend who had a nice problem. He had a big cheque coming to him for retro pay for a raise that he got. The amount was several thousand dollars and he had decided to pay off some debt (Great idea!). The question was which debt would he pay off first. He has a car loan for about $20K (5.9%), the mortgage for over $100K (6%) or a student loan at $5K (8.5%). He was concerned about paying off the student loan since he can use the interest as a tax deduction.
My personal thought was screw the tax write off and get rid of that student loan because the satisfaction of finally paying off your loan is a great emotional high which can be used to inspire you get rid of more debt. I think people tend to get so tied up in the numbers that they forget that money is a very emotional topic.
So next time you get a windfall, try to remember that some emotion in your money decisions can be a good thing.
Can you hear it in the air? Tiny bells and beeps indicating you’re spending far too much money at Christmas again. Well it doesn’t have to be that way; you just have to adjust your thinking a bit.
I personally like to start shopping for Christmas starting the week after Christmas. Why? Wrapping paper and cards are cheap and if you have the storage space it is a great cost saver.
Then on Jan 1, I start putting away $150 a month into my ING savings account, so by next Christmas I have my $1500 saved for buying presents before I buy my first present. When I go to actually buy the presents I look for things people will really enjoy rather than worrying if I’m not spending enough. If I end up under budget I just get a nice present for myself on Boxing Day when the sales are on.
Happy holidays every one.
As I mentioned in a previous post, I often find myself running out of spending cash for a couple of days a month. The really strange thing is I don’t notice it most of the time. Why? I plan for it.
During those few days of being broke I plan activities that cost nothing and by filling up my time during that period I don’t even notice the days that I’m broke.
Some of my favorite activities include:
– Go the library and check out a few books and a couple of DVD’s.
– Clean the house/yard or do some other chores I’ve been avoiding
– Go through the house and write up the monthly grocery list and then go shopping (the food budget is separate from my spending cash)
– Write (either a blog entry, short story or get back to that novel idea)
– Dig into your home DVD collection and watch an old favorite
– Visit family/friends and drink their coffee (it even cheaper than drinking your own coffee)
So next time your broke for a day or two, I suggest looking at it as a challenge. You might even find you enjoy not spending money.