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Why Are We Dumb With $$$?
Welcome To Dumb With Money
I have been dumb with my money! I have been cheated on loans, investments, and retirement funds. My goal with Dumb with Money is to open your eyes to what is going on in the financial sector. Learn from my experiences and make yourself better.
Your average person doesn't understand much, if anything, about securing loans. They feel the bank is doing them a favor and is their friend, when in fact they are your worst enemy, if you don't do your homework.
We are all dumb with money, some where along the line. I have yet to run into a person that has all of their ducks in a row from the get go. We all make mistakes. Either we learn from them and never make them again or we don't pay attention and end up losing day in and day out.
The biggest factor that causes us to be dumb is time. We don't want to waste our lives looking for the best rate. Look 98% of the biggest inventions to come out last year (Forbes) are all built around saving us time and nothing else. Set a goal and take your time to complete it. If you go in with this mind set, you will suceed. Savings and making money money passiively requires a great deal of thought.
As we begin to learn more about money we can look back and see what we already did wrong. The best way I found to gauge how dumb I am or others is to analyze every bill you send out over a month. Ask yourself:
1. Is this the best possible price I could get on this item?
2. What are other people paying? Ask your friends. Check the net.
3. Do I really need this and is there a better option?
Most people call this establishing a baseline budget. The main malfunctions here are that most people don't:
Re-evaluate this on an bi-annual basis- They set a budget once every couple of years and that's it. Technology changes, markets change.
A quick nugget here: With the huge competition in land phone services and Internet phones, the prices on service have plummetted. A close friend saw me writing out a check for my $40 phone bill and asked me if I ever used my phone. I would say my phone is in use 3-5 hours a day with more than 80% of that being long distance. He was still paying the $135 bill for local calls and 3 long distance a week. Man, that guy has to start paying attention to the TV ads.
Afraid of doing the research or the ramifications- Some people say that don't want to rock the boat. They like to be nice. They don't want to have to call their insurance agent to cancel, for a better rate, it may hurt his/her feelings. Forget rocking the boat, as smart consumers we need to start throwing the dead weight over boat. Saving money is never going to make you any friends. You need to accept this.
I usually take a week or so every year and put at least 3 bills in sights. I research them throughly to see if I could be getting a better deal. In many cases I find this saves me at least $300 - $500 a year. I always take that savings and put it in my kids college fund (529).
Because we all can be smarter with our money.