The fact of todays market means we all need to all be careful with all our money.
A few years back when I had too much time on my hands I got hold of a good friend of mine and started to produce some material to help people save money and outline steps for buying a first home. Unfortunately this didn’t quite get finished in the form that I wanted but hey at least I learnt a lot from writing it.
I don’t think there is any way of learning more than actually trying to write a book about it. But that’s a new story.
For the last few weeks I have been working with some friends of mine who are looking into buying their first home. They have had all the questions in the world and are getting their way through all of them. But there has been one strong thing that has come to light. One has been the planning needed and the other being their financial position. Both are very much needed to make sure success will happen when buying your first home. The one thing you need to plan for is that interest rates are going to go up which will mean the costs will go up in time!
For this reason I thought I should share some of the material that we made a few years ago. The information is fairly common but it is important:
FAIL TO PLAN – PLAN TO FAIL
The amount of money needed to actually survive is a surprisingly small amount. No matter how much money you have to live on, there are always a number of ways that you can reduce your out-goings so that you can make those dollars stretch further.
Up until the Second World War most people counted their wealth not only in terms of money but also in terms of how lucky they were to have family, housing, food on their table and good friends. The depressions prior to the war taught people that being rich wasn’t necessarily how much money you had in the bank but the quality of life that you lead.
Since then the war of materialism has become more and more popular with people wanting to “keep up with the Jones’”. Buying things on hire purchase so that you can have the product today has become the normal way of obtaining goods.
As reliance on ourselves and our bank account increases, and a desire to be dependant on the family decreases, we only have our own resources to help us out when we suddenly find ourselves in a financial bind.
Because we have limited resources, we have to plan much more carefully what we are going to do with our money.
If we are travelling in our car to a particular destination and we know we only have quarter of a tank of petrol, we calculate how far we are going to get on that quarter of a tank of petrol so that we don’t get stranded before we reach our destination. Why don’t we show the same care and attention to the amount of money we have in our pocket?
The main reason that people get into a financial mess is because they do not plan their finances.
IF YOU FAIL TO PLAN THEN YOU PLAN TO FAIL!
YOU NEED TO PLAN YOUR FINANCES
THE PLAN OF ATTACK
- · Identify where we are right now and have a full understanding of exactly how much income we have coming in and where it goes. We will see how much excess we have left – or how far short we are in paying our bills.
- · Stop further debt. Catch up on unpaid bills and start a habit of paying our bills as soon as they come in. As bills usually give you 20 days or so to pay them, this builds in an amount of flexibility if you usually pay them straight away.
- · Plan debt repayment. Clear all your credit cards and hire purchases by putting extra cash into these areas. Modify your budget and spending behaviour.
- · Start savings as soon as you can. This money is to be used to stop you getting into more debt by allowing you to overcome unforeseen expenses and also to assist in paying for needed purchases with cash. We need to aim at having $2000 as an emergency fund but you must start – even if it is the tiniest amount.
- · Monitor and plan your spending continually to make sure the plan is working and changing with your needs.
I hope this information helps in some way. I am no financial adviser but the basics are important. If you want a copy of the entire book, their are 6 – 60 page booklets that you can download from my server.
All you need to do is just email me at firstname.lastname@example.org