Figuring out Finances – Part 1

I have had a very complicated relationship with money my entire life. As an adult that relationship has gone through 3 stages – Awareness, Humility and Strategic.

I became aware of the power of money as a child when I realized that some of us had more than others and could therefore do more. As I grew up this idea of the haves and the ‘have nots’ just became clearer. When I came of age and started earning, I was immediately thrust into debt with my student loans and had to learn pretty early how to weigh financial commitments with everything else.

The humility came when I realized the powerful hold debt can have on us mentally, especially when we’re overwhelmed by it. It is quite easy to fall into debt and sometimes the reasons for doing so are frivolous. It is quite easy to fall into debt and sometimes the reasons for doing so are frivolous.

I’ve learnt to be more strategic with not just how I spend and prioritize money, but also with how I deal with debt. Debt and how to deal with it has seemingly become a defining part of my adulthood as well.

Along the way, I’ve learned some valuable lessons and figured out some good ways to simply make my financial journey, better and I’m going to share some with you.
Disclaimer: I am NOT a financial advisor, not even close. In addition, I’m sure you may’ve have read some of these tips somewhere else, however, whatever I have added here is based on my own tried and tested experience.

Find Novel Ways to Save Money

Many years ago, a friend of mine told me that he doesn’t re-spend coins – Jamaican 5, 10 and 20 dollars. Up until that point, I adopted a similar principle but my coin denominations were much lower – Jamaican $1, 10 and 25 cent coins. After that revelation I started doing the same with my larger coins and for a time, I would cash up to $10,000 worth of coins at the end of the year.

A recent tweet gave me pause and an opportunity to once again, level up.

Imani is saving $50 dollar bills. So I’ve already started and I’ll go as far as it takes me. These interesting personal challenges allow us to not only test our resolve to stick to something that’s good for us, but help us to automatically save money. I’m not saying this is for everyone. But if you can manage to keep those $50 bills to yourself, do it and see the lump sum you’ll have at the end of the year.

Always shop around for lower interest rates on loans

Sounds easy and it is.

If you are in a borrowing relationship with a financial institution, always check around for better rates – so whether you have a credit card, auto loan, personal loan – don’t neglect this. In fact, you may have loan options underneath your nose, via your employer, through loan sales or special product offers from financial companies. The goal is always to seek lower rates if you borrow.

Don’t fear credit cards

They are not your enemies.

I jumped into a credit card over a decade ago and I’ve never looked back. I remember when I had just applied I was told that I was making a mistake by getting one. But looking back I am thankful that I learned the hard lessons about using this tool early, so that now, I am able to make more calculated decisions about it. What’s even more fantastic now is the variety of cards that are available.

A while back I transitioned from having just a simple credit card, to having one that gave me a benefit. No longer would my debt just be debt, I would be rewarded for it as well! LOL. Even better, my interest rate went down.

But in all seriousness, if you want to get a credit card, plan to take the risks with it that you can afford and read all the fine print. Also, if your provider offers, always take the credit card insurance. You only pay insurance on what you owe.

Know your cut off dates, payment and billing dates, Annual Percentage Rate (APR), annual fees, if any and all conditions surrounding the use of your card.

Finally, don’t ever let a credit card provider fool you into taking a credit card with a higher interest rate, regardless of the ‘benefits’ or lack of annual fees.

They may tell you this “The interest rate doesn’t matter if you pay it off every month” but suppose you choose not to pay it off at the end of a month? Wouldn’t you rather be charged the lowest possible interest rate than a higher one? Think about it.

Save in foreign currency

This is just something that has worked for me depending on the type of account I’m using, for a number of reasons:

Firstly, having a foreign currency account, specifically a US$ product, has proven beneficial because with diligent saving, I always have foreign currency on hand when I need it for travel or particular expenses.

For medium or long term accounts, especially fixed deposit type products, I have found that over time, it’s better to save in a foreign currency because I get better value on my saving. This is even better if the interest rate isn’t that attractive, you’re able to add value to your savings based on fluctuations in the currency trading markets.

Buy in Bulk

I live by a simple rule: Never run out of toilet paper at home! I don’t care where you choose to buy it in bulk, just do it. Buy a year’s supply or 6 months supply just always have toilet paper stocked up.

But this is about more than just toilet paper. I just find it so much more convenient and cost effective to get certain supplies in bulk instead of making purchases month to month. My suggestion on approaching this is to buy basic items in bulk and include more products as you continue to manage your usage. It saves you money and works out in the end.

There are some more ideas that I will share in my next update, but until then, I hope these are helpful.

Be inspired, Be informed, Be Glorious!

Kevin

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