The Problem With Money
Most people have some problems with money sometimes. The problem may be different depending if you are rich or poor but money is always surrounded by complications and difficulties. If you are wealthy you may be wondering where the best and safest place to put your money is. You want to make the most profit by having your money work for you but you worry aout putting your money at risk because you don’t want to lose it. Meanwhile the person who is struggling to find enough money has a different set of financial problems. Their problems are not so much about losing the money they have as finding enough money to survive. Thie financial problems are compounded by the smallest change in their available resources and running short of cash one month can mean extra charges and costs to pay the next month.
A Problem With Money Can Be A Slippery Slope
The problem with money is that financial ruin is a slippery slope and we all think we are safe to walk across it to get where we want to be. We may think we have all our finances and money under control and we are ready to deal with any financial situation but the truth is that in this complicated and interdependent world there are few of us who could cope with every possible scenario of financial change and a collapse in our levels of monthly income..
Do Banks Help When You Have A Debt Problem?
Debt is most often the killer that strikes us down when we are at our weakest. The old saying that banks are eager to lend to people who don’t need the money and reluctant to lend to those who really need it remains broadly true. These days banks and other lending institutions have come up with so many different ways to impose extra charges and fees if the account is not maintained impeccably that they seem to make a profit whatever the situation so they were happy to lend to almost anyone.
We saw how the financial crisis demonstrated that even the biggest banks were not invulnerable to financial disaster and they are supposed to be the experts on money. The banks employed experts on finances and the maths that calculates interest rates and risk management. If the banks could get it so badly wrong, what chance do the rest of us have when it comes to avoiding a problem with money and debt.
The problem with money is that it is not real
If you have a barn full of firewood and it has to last you through the winter then you can see at a glance if the firewood is running low. If it gets to midwinter and you are more than halfway through your supplies you know you need to try to use less for the rest of the winter. The problem with money is that it is just a load of numbers.
Very few of us these days have a chest full of gold under the bed. All we see of most of our money is numbers on a bank statement, on credit card bills and on loan agreements. We don’t see a barn full of money dwindling if we use too much and nor do we see the money we have slipping through our fingers.
Credit Cards Can Cause A Problem With Money
The credit card is a terrific financial tool for short term emergency credit. If your car breaks down and you need to get it fixed a credit card allows you to do this even though you may not have the cash right now. So long as you are able to make sufficient repayments to reduce the debt over a reasonable time frame, this is a good use of a credit card debt.
However, so many of us think when we figure that we should buy a new TV or treat ourselves to a weekend break we just add the cost to the credit card. We never think about all the interest we are going to have to pay the credit card company, on top of the cost of the item we bought. We ignore the fact that while we are repaying that debt we don’t have that money to spend on other things.
One problem with money is that when we borrow money to purchase things it means we have less money available to spend in the future and the reverse is true as well. If you are careful with money now and sensible about purchasing new things you will have more money to spend in the future than you will if you buy things using credit cards now.
The problem with money is that it is all just numbers and we humans are not so good at visualizing numbers. We are not good at working out how much extra things cost us when we purchase on credit cards or loans. We are not good on having to pay today for the things we enjoyed last week or last year. The solution is to try to use cash more and credit cards.
The effect of using real cash for purchases is that it helps you overcome the problem with money when it is all spent via difgital transactions. When your pocket that was full of money begins to feel half empty you will want to be more careful with the remaining cash. This gives you a better idea of how to make the money you have left last longer to ensure you make the most of your money and help to make your msurvive a financial winter.
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