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Thursday, April 26, 2012

All About Attiude

Managing money isn't hard.  Building wealth isn't difficult. But you have to have the right attitude to do either.  We all start from different places and our experiences and perceptions of the world shape our opinions about money.  The world may teach you that it's hard to earn money and if that is the case, it would be difficult for you to earn money without seeing some struggle involved.  A person who has had experiences which have given them the opposite view may have the same struggles but would not be as focussed on the struggle as much as the money that was coming in.

To really get going with wealth creation, we need to scrutinise the beliefs that we have about money.  If they are negative beliefs, then we need to acknowledge these but let them go.  I have been through the attitude of "I can't afford...." and at that time in my life I had no goals and no dreams.  I wouldn't allow myself to want anything because I couldn't afford to buy it.  Meanwhile I was wasting money on too many small things that, had I had a plan, I could have used to do or buy something great.

I now live by the attitude of "I can have anything I want, however long it takes me to save for it" and I am finding that it is serving me quite well.  I seem to have the exact right amount of money when an opportunity comes up to do something fun or get something I want.  The universe lines up so that when the builder is available, so are the funds.  I decide how much money I want to spend on an item and then the item (which is usually many times more expensive) becomes available at exactly that price.

I have read plenty of books about the law of attraction and I am not 100% convinced yet but I am getting there.  There are too may coincidences.  But even if things don't appear just because we want them, denying yourself the opportunity to want something because you can't afford anything can't really help your situation.  Better to let yourself want something you don't have and then go about planning to get it, even if it takes 10 years of saving.  It gives a sense of purpose and something to look forward to, don't you think?

Saturday, April 21, 2012

Ready, Set, Go.

Thank you to everyone who has supported me thus far in my journey by reading these blogs and other publications.  If you haven't yet "liked" my facebook page, please do by searching facebook for Croner Academy and clicking the like button.  I am putting up handy money tips most days and linking up my blog posts so you'll know when a new one has come out.

I'll be officially launching my business as a Personal Finance Coach on the 10th May this year with a free workshop to be held in Eidsvold, Qld.  If you are in the area and would like to attend, I'd be thrilled to have you join me.

Monday, April 16, 2012

Interest Free

I’m sure you’ve seen the ads, “Buy now, pay later”, “24 months interest free”, “One low monthly repayment”.  It’s very tempting to get sucked into these deals, especially if it’s for something we think we need. I have personally used the interest free deal and found it quite useful, but I made sure that I read the fine print so that I wouldn’t pay more than necessary.  Here’s a few truths about interest free that may help you out in the future.

The card
When I applied for my interest free loan for $3500 worth of furniture (10 years ago), I merely got a statement each month similar to a credit card statement.  Now they give you a card as well.  This is so that you can use it again and run up the balance as much as you like.  But not at interest free, the rate for normal purchases is 21.74%

The fees
Yes it may be interest free for a period of time, but that doesn’t mean you pay nothing more than the price of your purchase.  For a GE money interest free loan, you get a monthly account keeping fee of $4.49 plus a $2 transaction fee if you pay your bill in a certain way.  For a 12 month interest free loan, that means you get slapped with an extra $77.88 if you pay it out before the interest free terms expire.

The minimum payment
The minimum payment per month is worked out at 3% of your outstanding balance.  At this rate, on 12 months interest free, you will only have paid 30% off your loan at the end of the interest free period. After that, they give you an outrageous interest bill of 29.49% on your remaining balance.  By now you should be in the habit of paying a certain amount each month.  If you can’t pay more than that, you may be in some trouble.  For example, the minimum payment for $5000 on 12 months interest free is around $150 to begin with and at the end of twelve months it is about $100 per month. If you keep paying just the minimum amount it will take you 61 years to pay off and you will have paid $25145.64 including $4770.15 in account keeping fees. 

The solution
Take the purchase price, divide by the number of interest free months, add the monthly fee and pay this amount or more each month so that your account is paid off before you get slapped with extra charges.

Sunday, April 8, 2012

Who's responsible?

I was having a conversation with my husband’s aunt about schools.  She was telling me about how people in her district were suggesting that the school provide breakfast for the students.  The school in which I used to work had a breakfast program while I was there.  The students would have to run around the oval a couple of times and then got some cereal for their effort. On the one hand this is a good idea.  It promotes healthy eating and exercise and it give’s the kids a chance at a good brekky who would otherwise have not gotten anything at home.  My issue is: why aren’t they getting a good breakfast at home?  Is it really the school’s responsibility to promote healthy eating?  When I was teaching in town I would see students walking to school with a can of coke and a bag of lollies.  This disturbs me.  One of the subjects I was teaching at the time was Health, but clearly explaining the benefits of healthy eating and the effects different foods had on the human body was not enough.  The message was lost.

Another gripe I regularly hear is parents complaining that their children are not being taught manners in school.  Is that really the job of the teachers?  If so, what role do the parents play in their children’s education?  It appears to me that parents are giving over their power as parents to the state and expecting schools to teach their children everything they need to know…. About everything.  At the same time, they are telling their kids, “The teachers can’t make you do anything, so you just do what you want.”  There are mixed signals here.  And it is no wonder that our kids are slipping through the cracks.

As a new parent and a former teacher, I have a unique perspective about what I can expect from schools and education for my child.  I know that schools have no power to discipline kids and no real ability to tailor programs to suit my child’s needs if they differ significantly from mainstream education.  Teachers only get the children for a short period each day and for the rest of the time they are in their parents’ care.  Can parents really expect teachers to have more influence over their children than they do themselves?  And for that matter, why do they want them to? 

For my part I’d like to urge parents to take back responsibility for their children’s education…all aspects of it.  If you want your child to grow up with a certain set of values, then model these for them and encourage your children to learn them.  If you don’t think that the school is doing a good enough job at teaching your child reading or mathematics, then don’t complain and threaten, pick up the slack and read with your children and encourage mathematical calculations at home.

If we, as parents, take back our power and realise that it is our responsibility alone to provide an education for our children, then the schools can resume their place.  By this I mean the school is merely a resource that you can use to assist you in the education of your children.  It is a good resource but not a complete one and certainly not the only one you have. Once you realise this fact, a whole new freedom opens up for you and your kids.  Take an interest.  Take back your power and your responsibility.  I’m sure that the education process will be far more rewarding when you do.

Tuesday, April 3, 2012

Saving for the big jobs

I've just had a wood heater installed in my house.  My ancient windows and doors which wouldn't close properly and have never been locked have also been changed to lovely sliding doors and windows.  It's been a project which I had on the cards for a while but it became suddenly urgent when I fell pregnant and realised that my baby would be born this winter.

It is surprising what can be achieved when a deadline is set.  If you have something that you want, and you want it bad enough, the world seems to align to get it done.  Creative ideas flow and you figure it out.

Here's how I saved the money:  

I have a regular income from which I pay all of my regular bills.  Out of this I also put aside 10% of my money for investing and 10% for reducing my investment loans (as I have no other debt).  I spend the rest, so no money for building projects there.  

Instead of trying to reduce my expenses (because there's not much more I can do there), I have been focussed on increasing my income.  It's a really simple formula actually.  When I get extra money in, I don't add this to my bill paying or living standards money.  I don't go out and blow it on new clothes or Christmas presents or stuff for my kids or let it be eaten up in any of the ordinary ways.  All extra money goes into a separate bank account and this is what I use to pay my builder or buy those big ticket items.  

"But where did the extra money come from?" I hear you ask.  That's the easy one to answer.  Tax returns, baby bonus, family tax benefit and income from contract work or part time jobs.  This year I delivered census forms which contributed nicely.  I'm also working on a business where I tutor people about how to get the most out of their money and I'm looking forward to getting some income from that.  Of course, I'm not going to take money from people unless I can help them to save/find/earn much more than I'm charging.  No point in helping someone save $100 if I take it straight from them.  That would completely defeat the purpose.

So there you have it.  How to get what you want in the time frame in which you want it.  Lets recap
Step 1 - Decide what you want
Step 2 - Decide when you want it
Step 3 - Keep your finances under control so you don't need extra for ordinary stuff
Step 4 - Make some extra cash
Step 5 - Buy the thing you want

Any questions?