Mar

28

money scripts: voting (part 1)

Filed Under credit and debt | Leave a Comment

In common with a lot of people, I’ve grown up with some scripts relating to money. By this I mean things that I have absorbed in childhood that I have never questioned. Some of those are related to voting.

first voting script
As a child, the importance of voting was drummed into my head. Interestingly, not because that’s how to get your voice heard, but because men and women died trying to get universal suffrage in Britain. Now, that’s all well and good, but how is it related to personal finance?

Well, in order to vote in the United Kingdom, you have to be on the Electoral Register. The electoral register is also used by credit reference agencies to confirm your address and not being on it damages your credit score. So there we go, registering to vote will improve your credit score.

Mar

27

not a money script: investing

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Various members of my family have taught me lots of things about finance, mostly spontaneously or by osmosis, which I have since internalised as a set of scripts about money that I follow by default. Nearly all the money scripts that I have are useful and work well (although it never hurts to revisit their logic).

One of the things that my family didn’t teach me about was investing. I am under the impression, rightly or wrongly, that they just don’t know that much about it. To be fair, when my parents started work they had final salary pension schemes, and I’m sure they would have assumed that I would get one too. Also, if asked, I’m pretty certain that they would say that saving for retirement is a good thing. But that only goes so far, especially when you are confronted with a list of investment funds for your money purchase pension from which you have to choose when you start your first job.

If I ever have the opportunity to influence young minds (heaven forbid) on the subject of finance, then I’ll be sure to plug investments. I’d tell them about index funds (I understand them) and also explain about tax advantages and the power of compound returns, and opportunity risks, and the problems with inflation. I’ll try to give them an advantage that I didn’t enjoy at their age.

Mar

27

five steps: step 2 pay off consumer debt

Filed Under Uncategorized | 1 Comment

This is the third in an irregular series on the five steps to solid wealth. Step 1 was spending less than you earn. Step 2, paying off consumer debt is generally (but not always) necessary to ensure solid wealth because consumer debt is expensive. It certainly puts you in the right mindset of not paying more (in finance charges) for something than you have to.

Consumer debt can be crippling. Interest rates are often high. You are paying through the nose for the privilege of buying what you can’t afford. It starts with stopping the use of credit. Pay it off by finding as much money as you can and throwing it at the debts. My favourite method is the Dave Ramsey debt snowball. I haven’t used it myself, but it comes with good references, and I can see why people stick to this method more than others. And that’s what’s important folks, sticking to it.

You can find great resources within the personal finance community on getting out of debt. In particular, no credit needed is the quintessential get out of debt blog and the archives on his site are immense. Get inspired and pay off your consumer debt.

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