Here is is! My second post after beginning Gail Vaz-Oxlade’s “Money Rules”. I’m still loving the book and loving her voice. The only thing stopping me from picking it up more is having the time! Also I started learning how to crochet (I know, I know…I’m an 80 year old in a 25 year old’s body) so that has been taking up some of my free time too. Here we go with the next set of rules from Gail!:
Rule #6 “Set Some Goals”. I completely agree! Without goals, how do you know what you want your end point to look like? She goes on about the importance of making these goals attainable and realistic. I’m hoping soon that I’ll be able to open my new emergency fund account and build it to $1000 as one of my goals for 2015!
Rule #7 “Your Banker is Not Your Friend”- Easy peasy on this one! Banks need to make money, and they do so by charging you interest and fees on the money you borrow.
Rule #8 “Everyone Needs an Emergency Fund“. I can only imagine how much further ahead I’d be if I had had an emergency fund when my car needed repairs. Instead I had to use my savings to cover it. Gail recommends 6 months of expenses as a base for an emergency fund but I still think I’ll start small with $1000 while I’m still in the red.
Rule #9 “Calculate Your Own Debt Repayment Plan”.- Gail provides a really easy formula for working out how long it would take you to get out of debt, seeing how much you’re paying in monthly interest, and also what your monthly payment should be if you want your debt paid off in a certain time frame. So cool! She also suggests using online calculators to help you out if you have multiple debts. I might try this out very soon and see what my end point looks like!!
Rule #10 “Your Financial Education is Your Responsibility”- Oh goodness am I ever loving this book so far. How are you ever going to learn more about finances if you don’t research. Again I think it would be such a good idea if basic financial lessons were taught in schools.
Rule #11 “Home Ownership Doesn’t Guarantee an Easy Retirement” – I guess I didn’t realize how many people rely on their house as their “savings” or “back up” in retirement. Sure being mortgage free would be awesome but that still doesn’t mean you don’t have maintenance costs and utilities! Retirement savings are still needed! Oh Gail, you smart lady, you.
Rule #12 “Compare Your Student Loan Interest Rate With Regular Loan Rates” – I’ve already paid off my government loans but this makes a lot of sense. Sometimes you could get a loan from the bank at a cheaper interest rate than a government loan. Or better yet, consolidate with a low interest rate.
Rule #13 “Term Insurance Is Not Better Than Permanent”- aaahh life insurance! I’m in the insurance industry and this topic still terrifies me. She goes on to explain the difference between both, likening them to rent vs. a mortgage.
Rule #14 “Don’t Let Your Lender Decide How Much You Should Buy“- Sure you might get preapproved for a mortgage of $300,000 but if you can only afford to pay the for a mortgage on a $150,000 house since you still have other bills, you might be in trouble! No one wants to be house poor. Watch your monthly payments.
Rule #15 “Don’t Wait To Invest”- Gail insists not to wait to invest. Investing still makes me nervous I think. I don’t really understand a lot about it. I feel like if I’m investing I should have a little more money to spend to do so. This is a subject I’d like to learn a lot more about once I have more debt paid down.
Stay tuned for Post #3 coming soon! Is there anything else you guys would like to see from these posts?