Week 16 : How To Help Your Kids With Money

 

I was amazed this week to read that people are already having to dip into their savings and reduce their children’s pocket money to meet the rising food, fuel and utility bill prices.

 

It reminded me of how important it is to prepare your children properly for an independent future, especially financially, and this of course is one of the reasons that my daughter & I created Kids Money Packs.

 

The problem with being a parent is that decisions involving your children tend to rely almost entirely on emotions. For example who can resist that beaming grin, the glint in the eye, the “Oh pleeeeeease can I have one?” moment and of course the pleasure of being able to be a provider of joy to your children is naturally a very rewarding feeling.

 

With all those good intentions, charged with all those parental emotions comes a huge stumbling block when it comes to the dynamic trio of Parents, Kids and money.

 

First of all some sort of pride seems to get in the way of decision making, such as always being the provider of what your children want. Always being seen to be able to afford whatever is the latest “must have” gadget or gizmo comes largely from peer pressure and has very little to do with affordability.

 

Second comes consistency, or should I say lack of it. This weeks news item lays this one firmly out in the open for all to see and understand. The fact that parents have decided that in order to make ends meet at the moment, they are reducing the pocket money they give to their children sends out a very confusing message to the children and teenagers at the receiving end. It is confusing because it is completely inconsistent and because there is in reality no structure to the way parents interact with their children around the subject of money, this inconsistency spills through into other areas too.

 

Kids Money Packs are designed to SAVE parents money, they are designed to provide a consistent way in which Kids can learn ALL the advantages of early wealth building money management techniques at an age when they are young enough to be able to provide a sound basis on which to build as they reach the age of 18 and above.

 

As this is a TRANSFER spend product, it does away with any pride getting in the way of parental decisions, because your children will learn to make their own, and it is 100% consistent it’s delivery of a proven way to return to the principles of attaching effort on the children’s part, being rewarded by parental involvement.

 

The principles are likely to stay with them for life, and by making their own decisions they will become more confident, goal orientated and are highly unlikely to become yet another debt statistic in the future.

 

For the purpose of the Pay Off Your Mortgage Challenge, we have placed a very conservative saving of £15 per week by using Kids Money Packs. In reality it could run into thousands and thousands of pounds over several years. * we have added the savings to the totals as part of the year challenge

 

designated website at : www.kidsmoneypack.co.uk

 

Any savings that you make should be added to your Freedom Payment each month and used to Pay Off Your Mortgage in 3 Years or Less. Anything else & it simply will not work.

 

Week 15 : Spruce Up Your Direct Debits

It is immensely enjoyable re-visiting this challenge for all sorts of reasons. First and foremost I’m more than happy to share the knowledge, which is available from many different sources as is health & fitness, how to start a business, quit smoking, lose weight, shape up, set goals etc etc. 

What is fascinating is that EVEN WITH the amount of knowledge and information available on an enormous range of topics, the fundamental problems still exist in their millions. The simple fact is, even though people KNOW that this sort of approach works, very few will EVER take up the Challenge themselves. 

 

WHY? Who knows, but what I do know is that if you simply take the time and effort to really understand how this formula works, then you will be able to move forward in life to places you simply never knew existed before. If you truly understand the power of this Control Freak formula you would understand how powerful UPSIDE DOWN PROPERTY DEVELOPING can be and you would begin to realise that your current situation is nothing other than the results of your past and has nothing to do with your future.

 

This week is all about checking your Direct Debits, Standing Orders and subscriptions to things you have probably forgotten about. I mean do you really need that subscription to “Fly Swat Weekly” — just because you have every copy since it began and maybe if you finish collecting each copy you will have a priceless collection to go to auction some day and sell for at least £100 or so! Check out alternatives to gym’s golf clubs, football tickets, pottery classes and slimming clubs ( that £5 per week to sit in a dodgy village hall would pay for a gym membership complete with swimming pool & fitness schedule.)

 

Check every single debit from your bank accounts each month, add them up and then ask yourself one simple question:-

 

Is it a WANT?

or Is it a NEED?

 

For reasons of sanity, I have imported all Blogs ( Pay Off, Women Invest Too & Goal Setting, Motivation & Action) into one at the I Believe Blog:-

Pay Off Your Mortgage & Goal Setting Blog

 

The Blog includes a pilot 10 minute Podcast on goal setting. The reason I mention this within this post is that the first time I stumbled across Goal setting was at the start of my own Pay Off Challenge. It is also the reason in my opinion why the vast majority of people, despite being shown a way to Pay Off their mortgage will simply never even try. It all comes down to one thing …. setting a goal and knowing that it is part of the bigger picture of where you want to be in life.

 

For the Pay Off Your Mortgage Challenge this week, I would expect most people to be able to reduce their Direct Debits and Subscriptions that they do not actually need by at least £ 60 per month.

 

Week 14 : Watch Your Cash Expenditure Wisely

 This week is straight out of the Control Freak Manual, it’s the jingle jangle of your pockets, it’s the hole in the wall, it’s the old fashioned way of paying for “stuff” good old CASH. 

Now we tend to be creatures of habit, so if you have always preferred cash, because you know where you are every week, for example; if you have not got enough money, you can’t spend it sort of thinking. Or perhaps you like to feel you are in control of your money and perhaps “pay” yourself an allowance for the week to live off and save the rest for a rainy day.

 

There is one major problem with cash … it is VERY difficult to TRACK, and therefore tends to becomes a great big “miscellaneous” in your home budget or home accounting.

To be fully in control of your spending, you need to keep a track on your CASH withdrawals …. not just you, but EVERY member of the family.

 

Buy a pack of small notebooks, and make a record of CASH spending each day for ONE MONTH … then swap notebooks with another family member, so you can be accountable to someone for every single penny. Explain WHY you NEEDED to make that purchase!

 

An example would look like this:-

 

Month of July  : Family member Mr Spendy Spenderson

 

3rd July : Cash withdrawal £ 60.00

£ 30 football night at the local pub

£ 10 lotto ticket

£ 20 play station game on special offer

 

9th July : Cash withdrawal £ 50

£ 15 extra fuel & sandwich on long journey to work

£ 35 new electric hedge trimmer — half price offer

 

This is where the preparation pays off, the purpose of all these weeks put together so far is to grow the gap between your Income and your Expenditure, just as you would in business, the amazing thing about the formula is that just a 10% difference, if put into the Control Freak Recipe would clear a mortgage, loans and credit cards OFF in 8 years or less WITHOUT DOING A SINGLE OTHER THING!  Amazing isn’t it? That is why the website is named “Pay Off Your Mortgage in 8 Years or Less” plus the fact that it easy to remember of course!

 

So let’s base this week on the average reduction on spending cash recklessly or sub consciously over the month, we usually find that the saving to be achieved is around 50% less than your current spend. So for the purposes of the Pay Off Your Mortgage Challenge I am using £ 50 per month saved and added to the Mortgage Freedom Payment.

 

Any savings that you make should be added to your Freedom Payment each month and used to Pay Off Your Mortgage in 3 Years or Less. Anything else & it simply will not work.

Week 13 : Holidays

It’s summer here in the UK, at least it is better than last year! That should not be too hard given the wash out last year, so it is only natural that when the grey winter turns into Spring and then Summer that we get very excited about our holidays. 

We have been lucky in recent years to benefit from cheaper flights to Europe, but what I find most people do is try & spend their way through the holiday as if there is no tomorrow. First there are the ones who save, and save, and save each year a set sum of money that is “the holiday fund” then they spend it. Whatever figure they have in their heads is NOT the holiday – it is what they intend to spend. Then on top of their “holiday fund” which seems to be the ONLY thing that will make them happy for a couple of weeks each year is the way this then spirals out of control the minute the alarm goes off at 4am in the morning to get to the airport.

 

First & foremost, if you are going to travel more than once in a year, save money on your travel insurance and buy it annually — save around £ 100 per year.

 

Do you really need to spend £ 9.00 per person on the cheapest, least nutritious, most horrible looking breakfast on earth at the airport, declaring “well I’m on holiday!” Family of four eating horrible rubbish — save £ 36.00 per breakfast

 

Do you really need to text/call the friends you saw last night to tell them you are in the airport now? Then tell them again when you have landed that the sun is shining at double the rate because your message has now been beamed into space and back again on your expense. Wherever you go, get a local phone and pay the cheapest call rate.. this alone can save a staggering average of around £ 250.00 per year

 

Do you really need to buy ALL that duty free, just because it is “VAT free” ask yourself .. IS IT REALLY? D’ya think?  save around £ 100 per trip per year

 

You are bored at the airport, the plane is delayed ( again! ) and so you wander round for a while, buy a ticket for the PORSCHE ( £ 20 ), have a few pints or glasses of wine ( because you’re on holiday! ) buy a few packets of crisps, sweets, magazines and newspapers and you have suddenly spent without a conscious thought another £ 60.00 before you have even taken off!

 

Here is one I learned the hard way, get a timeshare, all accommodation paid for every year, all round the world, then upgrade the flights instead saving no money at all. A phrase I picked up in the USA is one I will never forget.. ” Do you HAVE to go to the MOUSE HOUSE?” meaning, Disney World, Florida every year! Don’t get me wrong about any of the above, I fully intend to have Mickey as my next door neighbour in the near future, but seriously if you realise what paying off your mortgage, clearing your credit card debt can REALLY do for you and your family FOREVER you would take a hard look at your holiday habits over the next few years & Pay Off Your Mortgage with some of the money instead.

 

There are HUGE sums on the table here for saving potential, for the Pay Off Challenge this week, I am going to assume that the vast majority of people spend around £ 3000 on holidays each and every year. If you are serious about making those holidays MORE frequent then slash that budget by two thirds, plus stay in control at the airport and you will have Freedom Payment Money in the region of

 £ 2500.00 per year.

 

Week 12 ; Going Green

 We seem to be concerned with the effects on the environment and ourselves at the moment. Most of us participate in recycling newspapers, bottles, cardboard, green waste, clothing and shoes etc. 

I sometimes wonder which planet we are trying to save when it comes to the issue of plastic though. I can only speak for my area, but there is no collection of plastic whatsoever. It is my guess that this is the ONLY way bi-weekly collections can be just about managed because plastic bottles, cartons and packaging FILLS one bin up on it’s own every week. Now here’s the puzzle, what planet am I saving when I take the SAME amount of plastic as would have gone in the bin – DIRECTLY to the local tip myself every week?

 

Hmmm .. is not the real problem the packaging? The problem is caused at the source, not with the end user?  Without a hint of subtlety intended, the same is of course true with most things, including money problems.

 

So looking on the greener side of life, there are a few savings for your Freedom Payment Table that can be made by going green:-

 

Turning your heating thermostat down by just one degree can reduce your heating bills by 10% per year. With the average house spending around £ 1000 per year on energy, that is a saving of £ 100 per year.

 

Switching to energy saving light bulbs in your home can save you another £100 per year, based on 10 light bulbs with average use.

 

If you are not a high water user, then switching to a water meter can save you up to £170 per year.

 

Try out local farm shops and market stalls fro fresh fruit, vegetables and meat, ( apart from the fact Gordon Ramsay advocates this at every opportunity on his TV shows ) you not only save money, around £ 300 per year, but you will only have minimal packaging so you really WILL be saving the planet.

 

All of these small changes will add up to £ 670 in terms of potential money saving and a whole sequence of savings made to help the environment.

 

Keep Britain Beautiful! ( What ever happened to that advert?)

 

Finally I’d like to share something that I found hilarious this week. A visitor to this site proceeded to go to Amazon through one of my “widgets” as they are called, my carousels of books you can see on various pages and ordered a book. Nothing strange there you would say, but what tickled me is which book they ordered. Now as you can see, I am sharing this information week by week in the hope that people can see for themselves that there is no “magic” to the process, and that it simply requires exactly the same discipline and focus as I hopefully demonstrate week after week through updating these tips and keeping those who are still awake interested enough to attempt the same themselves.

 

So I set myself a pretty high target, of 3 years or less, and as you can see the totaliser after week 12 for the 3 year target is just under £ 50,000.

 

So guess what they bought? ” How to Pay Off Your Mortgage in 2 Years!” You know the book from the rather ill fated, although “doable” in principle TV series. Someday you wake up and realise that the answer isn’t in the book, it’s in the activity of what you do with the information that creates the change.

 

Any savings that you make should be added to your Freedom Payment each month and used to Pay Off Your Mortgage in 3 Years or Less. Anything else & it simply will not work.

Week 11 More About The Dreaded Credit Cards

 If you are like the vast majority of people who make New Years Resolutions, then did you notice we just reached half time? June is of course the sixth month out of twelve and half a year of time has just passed you by.  

If you take a look at one of the news archive sites, check out the predictions for the economy six months ago, then take a fresh look at today’s news. The sort of headlines we are seeing today were the same economic forecasts of Robert Kiyosaki & Donald Trump several years ago. I read a quote from Jim Rohn this morning which states, ” If you do not like what is going on around you, change it, you’re not a tree!”

 

This week I am revisiting credit cards, but I want to share a couple of different & challenging viewpoints on the effect they can have on your wealth.

 

Take an average size town in the UK, a population of say 85,000 to 100,000. That town usually has at least one main shopping centre, and the amount of visitors to that shopping centre is on average 130,000 per week. IF those 130,000 people have ONE credit card each each, with an average interest payment of just £ 30 per month on that single card, then the credit card company just made another £ 3,900,000.00 from one shopping centre per month.

 

Credit cards, when used incorrectly are DESIGNED to keep you in debt, at the minimum payment alone you will take 30 – 40 years to pay off the average balance. That is how they MAKE the credit card companies money, and they make a LOT of money.

 

Think about what kind of buildings the credit card companies own, they do not exactly run from a four bedroom detached in the suburbs do they? You will find them in prime locations in the centre of major cities, great big expensive buildings all kitted out with YOUR money. I wonder how many kids grow up thinking they might own a credit card company one day, it would be a pretty smart career choice.

 

Take another scenario, the first time I saw Martin Lewis on TV he had set up a stand in the middle of a shopping centre asking people to sign up for a MACS Credit Card, the interest rate was ridiculous, there were all sorts of useless bonuses to sign up today and HE was still getting “takers.” He revealed at the end of the show that the MACS card was in fact the word SCAM spelt backwards.

 

One last thought, my colleague had swapped her balance to a no interest deal at a High Street Bank and was paying off her small balance each and every month. She never used the card so it was surprise when she found the High Street bank had “given her £100 on her card as a FREE GIFT,” very nice of them you would think. The following month she found out she had been charged £ 1.00 in interest on the £ 100 she didn’t ask for, I suggested she give them a polite call and ask for her money back, which she did. Why? What if there were 5 million of her, that bank would make an extra

£ 5,000,000 a month alone if nobody asked for their money back, and all this was on an interest free credit card, but it does not apply to any new transactions, even transactions YOU choose NOT to MAKE.

 

If you have been following the Challenge, you should have paid off at least one credit card balance by now, saving you the interest. This process will can save you £ 100’s of £1,000’s of pounds in interest alone.

 

For this week’s Pay Off Saving, we will use the average of £ 30 in interest from one credit card, even though the vast majority of people now have multiple cards.

 

Any savings that you make should be added to your Freedom Payment each month and used to Pay Off Your Mortgage in 3 Years or Less. Anything else & it simply will not work.

 

Week 10 If You Are Going To Spend Anyway, At Least Make The Wisest Choice

 If you simply have to replace something, top up on the essentials, book a holiday or spend some time and money in the garden at least choose the wisest option first before parting with your money. 

Women are often referred to as “great shoppers”, perplexing as it is for our men folk when they get dragged along, we really do want to go into every shop in the Shopping Centre or especially the Outlet Malls just to see what bargains we can find.

 

Then after we have looked in pretty much every shop, we have completed our bargain research thoroughly and even though it seems like we always go back to the first shop we went in, we only carry out this crazy ritual because by then we NOW know where the best bargain is!

 

So the same thing must surely apply to everything we buy ? It would appear not. How many of us book our holiday through places like Quidco for cashback. A £2000 holiday can get you several hundred pounds back, just by using the system. In fact Quidco has cashback available on most things.

 

How many people have reward cards, points, club cards, nectar cards and other reward schemes and never use them? Or simply save them up to spend, or to buy an extra treat every now & again?

 

At Christmas, birthdays and other events with gifts, why not ask for garden centre vouchers, DIY vouchers or other Gift Vouchers from your favourite stores to use later in the year to save you some money.

 

The idea this week is to obviously acknowledge that you simply have to spend money along the way, that’s life, but when you are serious about Paying Off Your Mortgage you have to accumulate every additional few hundred pounds you can by making wiser choices when you have a purchase to make.

 

It seems to be a bit of a “British” thing to ignore savings to be made by using discount coupons. If you have ever been in a queue at the Supermarket and someone of older and wiser years is just checking out & reaches for their purse to produce a handful of coupons, do you roll your eyes and think ” Oh for goodness sake, coupons!” or do you think “I wonder how much they save every week by doing that.” For the most part Supermarkets tend to make it easier these days with their own schemes, but if you can add a pound or two to your next freedom payment — do it!

 

My husband came in the other evening and declared that he would have been home hours ago if “the elderly lady in the shop hadn’t wanted her free packet of sweets.” He went on to say that it held up the whole queue while the assistant went off to get the free sweets, the lady turned to my husband and apologised for the delay, and went on to explain she had promised the sweets to her grand children and didn’t want to leave empty handed.

 

It just goes to show that the right way to save money has been around for generations, and I’m sure they could tell me a thing or two about today’s society, in fact I suspect most of them could pinpoint the solution in less than 5 minutes.

 

So the Pay Off Challenge this week is all about saving money as you spend it, a slight contradiction in some ways but can be profitable if you know how.

 

If you receive vouchers of various kinds to the value of say £ 200 per year, and you receive cashback on one holiday of £2000 plus a couple of home items of around £ 400 each that would be a total cash equivalent of around £ 480.00 per year. This is money back on things you were going to do anyway, it’s what they call a “no brainer”.

 

Any savings that you make should be added to your Freedom Payment each month and used to Pay Off Your Mortgage in 3 Years or Less. Anything else & it simply will not work.

Week 9 : Moving House ? Add it up !

With the pending launch of our Upside Down Property Developing Manual approaching next week, we have got houses on the brain. During my own Pay Off Challenge we were midway on a renovation project so moving was not an option. If you are a home owner at present, if you need to move house in this current climate, then do you really know the costs?

Stamp Duty has given the government revenue of 31 billion pounds in the past ten years according to some analysts, and that has come from people just like you and me.

London stamp duty alone has gone up by 807% in the last ten years, so think about how much money you would save if you didn’t move.

If you are going to move, I would guess that the vast majority of people are looking to move up the housing ladder, and will probably be entering the next Stamp Duty bracket of £250,000 to £500,000 given the cost of house prices at this moment in time.

So on top of all the money you will be spending getting your house ready for selling, paint, soft furnishings, plants, even a new kitchen or bathroom if you are really serious about selling your house these days, so that’s an average of around £ 7000 to start the ball rolling.

Then you have your Estate Agents fees to pay when they sell your house,

£ 2450.00 plus VAT ( £ 2878 ) for say 1% of £245,000

then stamp duty on your new house £ 8250.00 3% now of say £ 275,000

Plus solicitors fee, say around £ 600 ( unless there are complications ) plus moving costs to your new location , a further £ 600 – £ 800

All in all if you are thinking about moving house ( bear in mind this does not include the money you are going to be spending on your new home ) you are committing yourself to expenditure of at least : £ 12428.00 PLUS the £ 7000 spent sprucing up your house to sell and you would be looking to spend £ 19428.00 just to move house.

If my goal was to Pay Off My Mortgage as quickly as possible, I would be using the money that I would have been spending on moving to pay down my mortgage.

The double edge sword to the process is that even if most people said to themselves, we’ll stay where we are, in most cases they were intending to move because they have outgrown their current property, so the temptation is to make some sort of home improvement instead. ( Average cost per year is likely to be in the region of £5000 )

There really is no right or wrong in any of these everyday choices in life, but I was contacted just last week by a family from the USA who had spent the last 5 years paying off their mortgage and were celebrating this week.

To them, as it was to me at the time, paying off your mortgage early is a matter of choice, but it is only important when it is part of your overall plans, ambitions and goals in life.

This week is one of those BIG weeks, these figures are big enough to make anyone sit up and take notice.

For the purpose of the Challenge, I will be using £15,000 saved in one year by NOT moving house. If you made that decision 3 years in a row, you would be looking at saving £45,000. If you are serious about this Challenge then you will have no problem in coming to terms with that, as you will know that the bigger picture will catapult you past the finishing post at warp speed.

For the Pay Off Challenge I have used HALF these figures to represent commitment to the Challenge. ( £ 7500 saved per year x 3 )

Any savings that you make should be added to your Freedom Payment each month and used to Pay Off Your Mortgage in 3 Years or Less. Anything else & it simply will not work.