George Boelcke is a financial expert and author of It’s Your Money! He does radio spots, writes about money online, and speaks across North America to people in the financial services business. Recently I attended his credit and debt seminar.
One of the best parts of the evening was hearing about George’s December game. Each year, when speaking engagements disappear in the holiday frenzy, George sets himself a challenge: keep more money in his pocket for the coming year by finding ways to cut expenses by $300 per month.
He rattled off a list of the changes he made for 2007. It included things like bundling his cable and cell phone, increasing the deductible on his car insurance, and cancelling subscriptions for magazines he didn’t have time to read. And this isn’t the first time he’s played the game.
Each year he thinks he can’t possibly find anything else to cut, but he does. I’d say the gauntlet has been dropped for each of us to do at least as well for ourselves. The need has never been greater. The stakes have never been higher.
The average Canadian’s debt load is now 125% of income. There are multiple credit cards in most wallets. Mail offering more pre-approved cards and low introductory rates for balance transfers arrives weekly.
Research tells us the average Canadian reads at a grade eight level. In order to read and understand the typical credit card agreement, a person needs the equivalent of 15 years of university. Is it any wonder no one reads the damn things? Forty-one per cent of consumers don’t even know the rate of interest charged on their credit cards. It’s a war out there, people, and many of us aren’t even armed.
Most retailers make financing available for in-store purchases ranging from computers to dishwashers. Lines of credit, once just a tool for businesses, are now available to anyone with some home equity. The scary part is for those people just paying the interest on their line of credit. It amounts to treading water.
The financial pitfalls are many. Indiscriminate use of bank cards can result in service fees at ?foreign? ATMs. Not maximizing RRSP contributions is preventing many of us from recouping some of our tax dollars. Accepting your bank’s account package without question may be costing you. Making only minimum payments on credit cards is bad for your financial health. Leasing a vehicle is not recommended for most people.
Buying a house with a tiny down payment and a long-term mortgage will cost you thousands of dollars extra in interest. And the list goes on. Buyer beware. Arm yourself with information and play George’s game.
I’d like to try it myself this year. I’m sure it’s doable. I’m convinced that mindset makes all the difference?if it’s a game, it’s not deprivation. If it’s a challenge, it’s not punishment. I’m sure we can do it. I wonder just how creative we can get. By the way, the idea isn’t to spend the extra $300 a month you find. That would just be wrong, from where I sit.