The income disparity that is evident around the world is growing. No longer do we even discuss millionaires; it is now Billionaires. While at the same time 76% of Americans think that an income of $100,000 defines one as rich.
In this article, we will discuss some life lessons we learn and money hacks to help you save money.
Money Hacks I – Recurring Purchases:
As Americans become more and more technology literate, we find more and more items to purchase that we did not even know existed before. We are told countless times a day, what we must purchase and how our lives will be better with these purchases.
1. Credit Cards
We all love to use our credit cards as it makes purchasing so easy. For smaller purchases we can apply these charges to our credit cards in just seconds. Some of these purchases can last for years on your card.
- Unlimited Car Washes: It is so easy to add a monthly charge to your credit card to drive right through the car wash.
- Movie Passes: It is so easy to add a monthly charge to your credit card so that you can go to the movie theater “for free”.
- Starbucks: Who doesn’t want to have their coffee each morning and pay for it later? Why not get the fancy coffee rather than the black coffee, when you do not have to dig into your pocket for the cost.
- Amazon: There are so many ways you can spend money on Amazon. The deals of the day, the ease of sending birthday/Christmas presents.
- Entertainment: Hulu, Comcast, AOL, all vie for your entertainment dollar. It is so easy to sign up for these services, and we are so slow to comparison shop against them.
- Home Services: ADT, product warranties, service plans are all designed to make your life better, but many have cheaper alternatives and some are just nice to have and not needed.
2. Bank and Non-Bank Loans
The process of taking out a loan from a bank is painful. The bank will require all kinds of documentation and guarantees, which make the process very long and paper intensive. However other financing businesses have sprung up that make borrowing too easy.
- Non-Bank Loans: In the mail almost each day we get mailers from Funding Circle, Credit Unions, Payment services, all of which promise the ease involved in getting money from them.
- Store Financing: Each store has a credit card or purchase plan that seeks to get you to work with them. How many times have you been told about the free miles, the immediate discount, the ease of transaction, or coupons that you will receive if you use their finance vehicle?
- Interest Free for Six Months: This game must be valuable for the credit card companies. They bank on the fact that you will miss that magic day when the six months of free ends, and you need to pay it. If you miss that date (in many cases, they don’t report it to you), all of a sudden you owe all that expensive back interest.
- Insurance: Make sure you comparison shop for your insurance! Each year you renew your policy with the same carrier and perhaps do not catch inflationary charges raising your rates. If you renew with the same carrier for many years, you may find that a fresh look will save you many dollars.
3. Interest Rates and Documentation
The secret costs that you do not see on your credit card statements:
- Interest Rates: The interest rates that many credit cards charge are unconscionable. These amazingly high rates are only allowed because certain municipalities want the company to locate in their state.
- Annual Fees: Once you have your credit card signed up for automatic billing/payment of recurring expenses, you do not want to go through the hassle of finding a new card with no fees, so you wince and pay the fees!
- Purchase Support: Have you ever noticed that for many vendors you cannot tell from the charge on your credit card to see what you have purchased! Even some of your favorite vendors leave you unable to tell what you purchased. If you do question the purchase, you get the third degree from the credit card company.
Money Hacks II – Time is Money
Time certainly can be considered money when it comes to a person who bills their income by the hour and has the opportunity to decide between doing a billable activity or having some one or something do it for them. But many of us are not confronted with this choice and choose the easier way purely because we do not want to do a given task.
Remember our parent’s generation did a great deal at home and I am sure they would have rather outsourced! But this allowed them to accumulate money. “Save the pennies and the dollars will follow”!
Money Hacks III – Human Nature
The common theme in all this is the expectation on the part of the financing vehicles that the average consumer is to busy or too lazy to go through the trouble of comparison shopping, of cancelling unnecessary charges, or holding back on that next purchase. It is just so easy for these financiers to take advantage of people who do not have the time to keep ahead of recurring billings.
Money Hack IV – The Lemming Effect
Too many people follow the crowd over the cliff. A movie star (who has no other credentials) tells you to purchase something; why would you listen to them? There is a line at a store/restaurant, it must mean that the product is good. Your friend buys some thing so you have to buy it too. A seven-year-old car still has many years of service left, but you feel you need a new one. The kitchen in your home has flawless tile counters but you feel you need granite. These are examples of the triggers that cause some people to purchase items that they do not need.
To close the income disparity in the United States, there are many different approaches. The best way is to increase ones income through better jobs, better promotions, having your money work for you (investing), etc. Not all people can start with these strategies and need to address their spending first. Take a moment to digest these money hacks and start saving now!
Don’t let the financiers outsmart you with their expectation of your inaction!
We are here providing insurance comparison shop to help you save money too. Go EINSURANCE.com and find the best insurance for the right price.