You see a lot of personal finance advice about doing smart things with your money—putting 10 percent of your income into savings, not carrying a credit card balance, negotiating the best deal on that new car, teaching your kids to handle money, and countless similar things. I endorse those kinds of strategies, obviously, because those are the subjects I write about in these pages.
May
2
Boy, here’s a myth that needs debunking. Some people think paying bills until just before the due date will generate more money in the form of interest. The thinking is, “Why should I give (fill in the blank) the use of my money when it can be earning interest in my bank?”
Apr
12
A friend of mine is married with four children. Doug (not his real name) has a very good job and makes at least six figures. His wife Karen (again, a fictitious name) stays home to take care of the kids.
Doug seems happy and is not a complainer, but one day he told me Karen had launched a campaign for buying a very expensive bracelet. Her main reasoning was, “I work hard, I deserve it.” Doug was resisting and as you might imagine, the result was friction.
Apr
5
It helps to think of our relationship with merchants like this: We’re the master and they’re the puppy.
Now, a puppy will do whatever comes into its little head. Left untrained, the puppy will chew everything, bark all day, get up on the sofa, jump up on everybody, and do anything else he likes. Thank goodness we have the means to discourage such behavior.
Feb
21
After I graduated from college and started making a little money, I was struck by an idea that seemed to come out of the blue: Why not buy a year’s worth of consumables all at once?
The concept made at least some sense. Running out of anything has always really bugged me. So has needing to make a purchase because I’m about to run out (invariably at a higher price and maybe not finding what I really want). Also the reality of returning from a shopping run and realizing I’d forgotten something, in spite of the Master List, motivated me to look for a better way.
Feb
14
This blog article was scheduled to be about bulk buying. Tune in next time, as they say, because that show has been preempted. In its place I want to say a few words about the idea of being cheap.
To me, the word cheap is repulsive. I think of cheap and trashy as the same thing when it comes to products. I am still incredulous when an adult buys something cheap and then expresses shock when it falls apart like the junk it is. At least when a kid does it, there’s still a chance he will learn that not all XYZs are the same.
Jan
26
One Step Ahead is a concept that, if allowed it to come into your life, will give you the gift of freedom. As you will come to learn, One Step Ahead can take a thousand different forms, with the end result always the same—more freedom and more choice. What you do with that is always up to you.
Dec
28
As you may know by now, Real World Finance attempts to examine personal finance within the bigger picture of real life. A good principle in real life will always translate well to your finances. For example, if you’re on time for work or class, you’re likely to pay bills on time, too.
And now for the big picture. Many years ago I was told a story, and it made such an impact on me that I’ve never forgotten it—or the point it makes. Today I’d like to share it with you.
Dec
12
This is for young people considering their first job. It’s for parents, too.
Conventional thinking (broadly translated as “non-thinking”) says it doesn’t really matter what your first job is. Just get out there in the workforce and learn the value of a dollar.
Oct
23
For just about everybody, buying a home is the most expensive thing we’ll ever do. The next most expensive? Buying a car. It is generally assumed by “them” that we will be borrowing money in each case. While that may be conventional thinking, our goal at Real World Finance is to be a little smarter than “they” are.
Looking at a big-ticket item like a car gives us a chance to examine one of Real World Finance’s most important principles: earn interest, don’t pay it. If you decide to adopt this approach, you will be paying cash for your cars the rest of your life and saving many, many thousands in interest.
