I was jolted while sitting in church to hear the minister say:
“Youth is prepared to take risks – older people stick with security.”
As I look back over my life I could see the accuracy of that statement. I took risks in those early days that I wouldn’t dare to now. However there must be a reasonable balance in all things and I’d like to look at both sides of the coin to discover a pathway that is neither two rocky to negotiate nor two smooth to lack excitement.
When I was dishing out housing loans as a bank manager and a young couple was facing me keen to purchase their first house, the easiest thing to do was to grant the loan to make their dreams come true. But bitter experience always made me dig under the surface to determine their capacity to cope with the extra mortgage and interest repayments, rates and insurance , repairs and maintenance. Invariably this aspect hadn’t entered their young heads. The availability of mortgage monies to purchase the house property was their prime consideration. Nor would they have done their sums correctly and added on all the hidden costs of settlement.
So I would have to go through the tedious task of working out the budget forecasts, add up proposed income and expenditure to discover whether there would be sufficient surplus to cope with any subsequent aberrations. Often I would have to say that on the face of it they could just cope but the risk factor was extremely high. When asked if they still wanted to go ahead with the transaction invariably the young couple would say, yes we’ll have a go! But I noticed that older people would reconsider and plump for a lower price house to give them a safety margin.
With a reasonable predictable economy the risk factor is lessened but these days with interest and inflation going up and down like yo-yos, there certainly needs to be a larger safety margin.
Even though my banker’s instinct would want me to deny a young couple their mortgage money, after warning them of the risk I would say, “if you don’t have a go now, you probably will never own your own home.
Well what about security? Should we go through life always financially solvent, never using credit, only buying what we can afford and taking no risks whatsoever? Many would say that would be a humdrum existence
But in hindsight I believe financial freedom is the only way to go. If we plan our spending to achieve our financial goals neither using credit nor taking excessive risks we may never rise to any great heights financially but money worries will never be our lot.
Then we can take risks in other areas. Maybe we will volunteer for community work, learning how to be a good secretary or treasurer of some committee. Trying some sports like skydiving or skiing. Learning skills in mechanics, electronics or woodwork.
Life can be exciting or dull whichever way you want it.
However the tortoise only makes progress when he sticks his neck out!
Wednesday, May 14, 2008
Tuesday, May 13, 2008
REAPING WHAT WE SOW
Some young people need to wake their ideas up because what they are sowing now, they will be reaping in the future. Parents also need to realize that maybe they are unconsciously allowing bad habits to form in their children that will be difficult and sometimes impossible to eradicate in the future. Inculcating good financial habits in children does not come easy. There’s not much practical information available these days and most parents have only a vague idea of how to go about training their children in financial expertise.
Take weekly allowances for instance. Some children don’t get any, some have to earn it, some get it gratuitously, others ask or demand at the drop of a hat. Some parents put the allowance in a Savings Account for their children, others invest it in Life Policies, Shares etc..
One thing for sure, your children watch you like a hawk – they observe how you budget and spend your money. Unfortunately they never seem to hear much about the income side but they certainly see the ease with which money seems to flow in a never ending supply from purses, cheque books, credit cards or just on the never- never.
No wonder they learn an ‘easy come, easy go’ attitude. I would be surprised if 5% of families have at least an annual family conference when Dad explains how his budget scheme works, how he apportions a set amount to cover committed expenditure, how much Mum gets for housekeeping and her allowances. How much he retains for his allowance and contingent, variable items such as repair bills, dental and medical etc. How much for holidays and the all important factor, how much is left over to achieve the immediate goal. Wouldn’t that be a great start for your children (that is if you are operating a good financial system).
Richard Halverson wrote:
“Each of your children will meet an old man or woman someday. Down the road ahead – 30, 40, 50, 60 years, waiting for them to catch up. What kind of person will they meet will depend upon your input and their own. They may catch up with a generous, likable person who has financial stability and plenty of friends. Or they might meet up with a dried up, cynical old miser or spendthrift, soured, friendless, alone. The kind of person they meet will be the sum total of all they think, do and say from now until then. A point to remember is that these things don’t always tell immediately but they will show up sooner than they think. Time to take care of the old man or woman is right now because the day comes when it is too late.”
Habits formed in childhood usually set like concrete. I know you have good intentions to get your own household financial plan in order then you fully intend to teach your children the necessary financial skills. Let me remind you that the road to hell is paved with good intentions and unless you schedule prime time and make this your number one goal, your children might just end up like you.
You wouldn’t want that would you? Or would you?
Better check it out
Take weekly allowances for instance. Some children don’t get any, some have to earn it, some get it gratuitously, others ask or demand at the drop of a hat. Some parents put the allowance in a Savings Account for their children, others invest it in Life Policies, Shares etc..
One thing for sure, your children watch you like a hawk – they observe how you budget and spend your money. Unfortunately they never seem to hear much about the income side but they certainly see the ease with which money seems to flow in a never ending supply from purses, cheque books, credit cards or just on the never- never.
No wonder they learn an ‘easy come, easy go’ attitude. I would be surprised if 5% of families have at least an annual family conference when Dad explains how his budget scheme works, how he apportions a set amount to cover committed expenditure, how much Mum gets for housekeeping and her allowances. How much he retains for his allowance and contingent, variable items such as repair bills, dental and medical etc. How much for holidays and the all important factor, how much is left over to achieve the immediate goal. Wouldn’t that be a great start for your children (that is if you are operating a good financial system).
Richard Halverson wrote:
“Each of your children will meet an old man or woman someday. Down the road ahead – 30, 40, 50, 60 years, waiting for them to catch up. What kind of person will they meet will depend upon your input and their own. They may catch up with a generous, likable person who has financial stability and plenty of friends. Or they might meet up with a dried up, cynical old miser or spendthrift, soured, friendless, alone. The kind of person they meet will be the sum total of all they think, do and say from now until then. A point to remember is that these things don’t always tell immediately but they will show up sooner than they think. Time to take care of the old man or woman is right now because the day comes when it is too late.”
Habits formed in childhood usually set like concrete. I know you have good intentions to get your own household financial plan in order then you fully intend to teach your children the necessary financial skills. Let me remind you that the road to hell is paved with good intentions and unless you schedule prime time and make this your number one goal, your children might just end up like you.
You wouldn’t want that would you? Or would you?
Better check it out
Sunday, May 11, 2008
FREEDOM . . . to do what?
The catchword during the immediate past has been, ”Let’s free up.”
Disciplined action has been largely done away with. No longer is the strap or cane tolerated in schools. Because there is very little discipline in the home, parents have to resort to cajoling and bribery to get some law and order in their everyday living. Politicians have leapt on the bandwagon to free up the economy by throwing out existing rules and regulations; the old has been ousted and the new regime instituted so fast that the populace is lagging behind, uncertain and apprehensive of what the future will bring
What is freedom? What does it mean to be totally free? If freedom is to have lasting value it must be contained within definitive borders. In so many cases freedom is degenerating into, “Yes, I’ll do what I want even if it means breaking, or bending the rules so long as I am pleased, satisfied and rewarded.”
But we are also free to do right and live justly. When rules are broken we not only hurt ourselves but we hurt others. When the raging sea breaks down the barrier meant to contain it, chaos reigns until justice takes over to enforce the existing rule and the wall is rebuilt even stronger.
A person, who is free, is free to live an ordered life within the limits of well-defined conscience. If everyone on a collective basis lives in similar fashion within the confines of authority we are free indeed. In this country we have more freedom than many other countries but I fear we are abusing our privileges. We’ve been free to borrow up to the hilt both nationally and privately. We’ve been free to split up with our life partner if the going gets rough. This type of freedom only seems to spawn a bucket full of problems and sorrow.
May I suggest that we are still free to decide on a new course of action for our lives and, since it will be our decision, we will have the sense of responsibility for what happens. We are rewarded with the decision when it is a good one and we should learn a lesson when it is a bad one.
You are totally free to plan your spending within your income. You are free to teach our children money discipline and skills. You are free to live on a lower income in order to save for your retirement. You are free to drive an old car even though your neighbor has a BMW. You don’t need to suffer the tyranny of others’ expectations. You are free to be honest, up front, full of integrity, free to keep the laws of the country and free to legitimately avoid tax so long as you don’t evade it.
Which freedom will you choose – to do right or wrong?
The ball is totally in your court
Disciplined action has been largely done away with. No longer is the strap or cane tolerated in schools. Because there is very little discipline in the home, parents have to resort to cajoling and bribery to get some law and order in their everyday living. Politicians have leapt on the bandwagon to free up the economy by throwing out existing rules and regulations; the old has been ousted and the new regime instituted so fast that the populace is lagging behind, uncertain and apprehensive of what the future will bring
What is freedom? What does it mean to be totally free? If freedom is to have lasting value it must be contained within definitive borders. In so many cases freedom is degenerating into, “Yes, I’ll do what I want even if it means breaking, or bending the rules so long as I am pleased, satisfied and rewarded.”
But we are also free to do right and live justly. When rules are broken we not only hurt ourselves but we hurt others. When the raging sea breaks down the barrier meant to contain it, chaos reigns until justice takes over to enforce the existing rule and the wall is rebuilt even stronger.
A person, who is free, is free to live an ordered life within the limits of well-defined conscience. If everyone on a collective basis lives in similar fashion within the confines of authority we are free indeed. In this country we have more freedom than many other countries but I fear we are abusing our privileges. We’ve been free to borrow up to the hilt both nationally and privately. We’ve been free to split up with our life partner if the going gets rough. This type of freedom only seems to spawn a bucket full of problems and sorrow.
May I suggest that we are still free to decide on a new course of action for our lives and, since it will be our decision, we will have the sense of responsibility for what happens. We are rewarded with the decision when it is a good one and we should learn a lesson when it is a bad one.
You are totally free to plan your spending within your income. You are free to teach our children money discipline and skills. You are free to live on a lower income in order to save for your retirement. You are free to drive an old car even though your neighbor has a BMW. You don’t need to suffer the tyranny of others’ expectations. You are free to be honest, up front, full of integrity, free to keep the laws of the country and free to legitimately avoid tax so long as you don’t evade it.
Which freedom will you choose – to do right or wrong?
The ball is totally in your court
Monday, May 05, 2008
ECONOMY EATING
Judged by world standards New Zealanders eat very well. It’s been estimated that we eat 72% more than is necessary for good health. With food prices constantly rising the weekly Supermarket cost is a big drain on our overall expenditure. The fact is that many families are eating the profits and wondering why there is no surplus left from their income.
Feeding a family can be either a haphazard affair or a managerial operation. With so many solo parents and wives working there is precious little time for them to set aside for planning well balanced, low-cost meals. The tendency is to opt for fast foods, pre-cooked, or easy-to-prepare meals.
Eating habits can become a very personal affair with different members of the family demanding different diets to the extent where the cook is stretched to the limit trying to keep pace with individual idiosyncrasies. I firmly believe that consistency in eating nutritious, satisfying meals can not only bring good health but also to trim the budget at the same time. Most foods need an acquired taste and if it is served up long enough with no alternatives permitted it will eventually be enjoyed.
Why not turn over a new leaf this year. Become a home executive with managerial skills in housekeeping, learning new ways to cut food costs, so that you can have a greater purchasing power for more permanent items. Just a few hints to get you going but I hope you leave me for cold eventually.
PLANNING: Perhaps the most important hour you set aside once a week is to plan your menus for the ensuing seven days. This should preferably be completed the day before you go shopping. Jot down your seven main meal menus then write out a shopping list to provide the necessary ingredients.
SHOPPING LIST: Also keep a continuous shopping list and add items as soon as they run low. You will save on emergency trips to the store to buy single items.
SUPERMARKET BUYING: Stick to your list and don’t be tempted buy unnecessary goodies. Don’t rush your shopping or shop when you’re hungry. Try to do the weekly shopping yourself. You’ll soon become an expert, quick to spot seasonal bargains in vegetables, meat, fish and fruit. Whenever possible, buy the exact amount required for the recipes. This minimizes leftovers.
RECIPES: Scan cookbooks for wholesome low-cost recipes – go easy on the meat – be lavish on rice, pastas, coleslaw and salads of all descriptions. You can’t beat a breakfast of muesli. It tastes like cardboard and needs plenty of chewing to get the juices going but it provides plenty of bulk to fill the corners until lunchtime. You can then economize on the toasts, jams, honey etc..
BECOME AN EXPERT: You have the potential – all you need is to schedule enough prime time each week to accomplish that task. But learn to develop an inquiring mind that will enable you to ferret out the shortcuts and best ideas.
Feeding a family can be either a haphazard affair or a managerial operation. With so many solo parents and wives working there is precious little time for them to set aside for planning well balanced, low-cost meals. The tendency is to opt for fast foods, pre-cooked, or easy-to-prepare meals.
Eating habits can become a very personal affair with different members of the family demanding different diets to the extent where the cook is stretched to the limit trying to keep pace with individual idiosyncrasies. I firmly believe that consistency in eating nutritious, satisfying meals can not only bring good health but also to trim the budget at the same time. Most foods need an acquired taste and if it is served up long enough with no alternatives permitted it will eventually be enjoyed.
Why not turn over a new leaf this year. Become a home executive with managerial skills in housekeeping, learning new ways to cut food costs, so that you can have a greater purchasing power for more permanent items. Just a few hints to get you going but I hope you leave me for cold eventually.
PLANNING: Perhaps the most important hour you set aside once a week is to plan your menus for the ensuing seven days. This should preferably be completed the day before you go shopping. Jot down your seven main meal menus then write out a shopping list to provide the necessary ingredients.
SHOPPING LIST: Also keep a continuous shopping list and add items as soon as they run low. You will save on emergency trips to the store to buy single items.
SUPERMARKET BUYING: Stick to your list and don’t be tempted buy unnecessary goodies. Don’t rush your shopping or shop when you’re hungry. Try to do the weekly shopping yourself. You’ll soon become an expert, quick to spot seasonal bargains in vegetables, meat, fish and fruit. Whenever possible, buy the exact amount required for the recipes. This minimizes leftovers.
RECIPES: Scan cookbooks for wholesome low-cost recipes – go easy on the meat – be lavish on rice, pastas, coleslaw and salads of all descriptions. You can’t beat a breakfast of muesli. It tastes like cardboard and needs plenty of chewing to get the juices going but it provides plenty of bulk to fill the corners until lunchtime. You can then economize on the toasts, jams, honey etc..
BECOME AN EXPERT: You have the potential – all you need is to schedule enough prime time each week to accomplish that task. But learn to develop an inquiring mind that will enable you to ferret out the shortcuts and best ideas.
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