For many of us our school days were some of the best times in our life. We made friends, had some fun and even learnt a thing or two. Then came our graduation and entry into the ‘real world’ where we were encouraged to stand on our own two feet and make a name for ourselves. Some progressive thinking kids had their career mapped out already: university, followed by employment in a specific field of expertise, a good wage and all the trappings that follow.
The rest of us kind of stumbled around in the dark for a while, wondering just what to do with ourselves. Why, for goodness sake didn’t we learn practical things at school that would set us up and save us money during life’s journey? Why didn’t they teach us how to build a house, fix a car and manage our finances? Admittedly, the curriculum is changing and business and life skills are now part of the agenda in some schools, but often more as an afterthought than a real plan.
A small sample of financial educational concepts may have held our attention back then, and I hope they do now, so pay attention or you may get a failing grade in life.
Learn to negotiate
Achieving the best possible deal on purchases is a significant step toward financial astuteness in the modern world. No matter what your earning power, your dreams will probably amount to about double the cost of your financial capacity to realise them. You will need to make an effort to make every dollar go as far as possible.
The online marketplace has been a revelation for many, providing a convenient means of shopping around for bargains. There are also lots of sites offering comparative pricing and rates for a huge range of products and services. It’s never been easier to compare, for example, energy deals and insurance prices.
This doesn’t mean you should ignore traditional retail avenues and service providers as potential fields for negotiation and savings. Research has shown that more than 40% of all goods purchased have been bought at discounted prices. Do some comparative price research before entering into negotiations, then be forthright and confident in your approach and you may be pleasantly surprised at the results. And remember, it costs nothing to ask.
Get the best loan interest rate
With lending institutions continuously spouting propaganda regarding their superior rates and the foolhardy proposition of entering into a contract with competitors, you can be forgiven for confusion regarding the effect of interest rates on your finances.
In simple language, an interest rate is a yearly price accepted by a borrower in order to obtain a loan. It is most commonly a percentage of the total loan, and is often paid by the borrower as a monthly charge over and above the loan amount itself. Interest rates are fixed or variable. Fixed interest rates are locked in and don’t change (unless re-negotiated) during the term of the loan. Variable rates move up or down in accordance with changeable standard rates of your lending institution.
Online resources assist by providing comparative rates of the various banks and lending institutions. But remember, banks are businesses too and they want your custom. Behind the serious veneer of the bank manager is a sales person desperately wanting you to purchase their product (a loan). You might be surprised just how flexible they can be regarding your request for a better rate.
The budget
It seems simple enough. Money comes in and money goes out, hopefully with a little left over for a treat or luxury. However, life sometimes throws a curve ball at us, and situations arise where you can find it difficult to make ends meet. Borrowing to the limit of ones income has reached epidemic proportions with large numbers of people’s spending spiralling out of control into a tangled mess of debt.
There are a few ways to avoid this scenario:
- Don’t spend money you don’t have and don’t borrow more than you can afford to pay back.
- Make a grocery list and stick to it. Don’t wait until you are hungry and splurge.
- Take a packed lunch to work.
- Use cash instead of cards. It’s easier to be frugal when you see just how much you spend.
- Take time to reflect before making big purchases.
- Become energy efficient. Encourage to rest of your household to reach savings targets.
- Attempt to save a small percentage of your salary on a weekly basis.
