Opinionated Thought

Why is it so expensive to be broke?

Last Updated on Thursday, 11 June 2009 14:50
Written by John Riley Monday, 25 May 2009 23:41

Family & Friends - Home Life

User Rating: / 6
PoorBest 

Have you ever noticed how expensive it is to be low on cash? I know your well off now and living well below your means and saving a minimum of 20% of your income but I'm sure you once felt that pinch. Even that pinch can get expensive. Allot of stress can take a heavy psychological toll over time.

Some additional expenses come hard and come often. Other expenditures you would never notice. And most of the extra cost you just get used to. Either way life is easier when you're flush with cash. Forget the obvious reasons and the ability to buy more useless junk and take a gander at my list of ‘oh yeah, that does suck'.

Bank Fee's - Banks are business and need to make money too, I understand that. But charging an account maintenance fee on a savings account? Isn't the point of a savings account to SAVE money? I didn't realize it was just a place for me to put your future revenue. If you hold certain minimum balances than you don't have to pay an account maintenance fee and luckily that threshold is low, but I vividly remember debating this point with my banker. I was particularly upset because my checking account was well funded at the time.

I have become a virtual genius at avoiding bank fees. One way to easily do this is to never bounce a check. Realizing that over draft fees can add an additional 20 - 40 bucks to the tab it becomes a no brainer, Don't Do It! Admittedly I have occurred a few of these myself a time or two but the charges that bite the hardest were the ones that I incurred un-expectedly. Bad math or unaccounted for purchases can do this, but what about that over draft fee you get slapped with because the bank put a hold on a deposit and you didn't realize it? Bank of America is the worst about this. It is enough to make you go postal.

Credit Cards - Also known as spending money you don't have. So unless you're building your credit for a specific purpose or paying the balance off monthly, leave them alone. Emergency cards are a good idea but those unexpected expenses you don't have the cash for will land you in the world of paying interest rates that are absurd to anyone grounded in reality.

Time is Money and most of us are use to trading time for a paycheck. But in how many ways is our time wasted by the lack of cash? To be rich is to have money; to be wealthy is to have time. Think about it. Before you make a mad dash for gas make sure you have some cash because if you can only afford to put a five in the tank, you will be back tomorrow. And time is priceless, why spend it at the pump on a daily basis?

Credit - The secret to good credit is this. Pay your bills on time. It is just that simple. A lack of cash and one might slip every now and again. This brings down your score and raises your interest rate on any loan you may or may not need in the future. So never under any circumstance be more than 30 days late on any loan. And I do mean EVER. This simple mistake will cost you thousands over the long run.

Speeding tickets are a funny thing. If you happen to stumble upon this unforgiving form of additional taxation my thoughts are with you. But what happens if you don't have enough cash to cover the cost? They put you on probation at an additional cost of $25 per month and a required monthly visit. This visit is usually required during normal business hours. Don't most of us work during normal business hours? Thankfully now you can pay these taxes with a credit card. But the whole legal system is setup to benefit those with large bank accounts. From making bail to hiring a decent attorney if ever you find yourself in a mess a big bank account will always help.

There are numerous examples of how being broke is expensive and the list above is far from complete. Consider the inability to invest, buy in bulk, or maintain reliable transportation. The list goes on and on. Personally I'm working on a second comma for my bank account statement. The moral of the story is to make as much money as you can while enjoying life's little intricacies. And while some would argue that the cost of being broke is directly related to the cost of being ignorant. Your own ignorance in the laws of money and finances will definitely cost you the most.

Bookmark with:

              

TrackBack URI for this entry

Comments (0)

Subscribe to this comment's feed