Extra Cash is not That Hard to Find

When it comes to tightening the belt and preparing a budget, most people immediately think about cutting back household expenses. Most don’t consider the possibility of increasing income.  While it seems harder it is definitely the greater opportunity.

Who cares what you spend if you have more than enough income to cover it right?

It is ‘poverty thinking’ to put limits on your earning capacity.  Your income is only ever fixed or limited in your own mind.  Most people stay poor because they merely sell their time and do no more than earn enough to get by.

Time-based income will always be limited because you only have 24 hours in a day, 7 days in a week and 52 weeks in a year to sell.  To remove the limits on your income potential, you must disconnect your income from the amount of hours in a day or the time you have for sale.

The ideal way to earn more income is to set up a system of earning that doesn’t necessarily require you to report for 9-5 duty.  This means making something and selling it over and over; or leveraging off other people’s time, money, products and services.  Wouldn’t it be great to have a stream of income that you didn’t have to get out of bed to earn?

One of the great advantages of this type of income is that is keeps coming in even if you are sick or can’t work.  It keeps coming in while you are away on a holiday, or travelling around the country.  best of all, it keeps coming while you are sleeping.

For most people, the reality is likely to be a combination of time-based (employed) earning and leveraged or recurring earning.   So here is a mixture of ways to earn a little extra cash to take the pressure off your household budget.

  • Rent a room
  • Take in a boarder
  • Participate in online surveys & referrals
  • Get a part time job
  • Change your job
  • Ask for a raise
  • Earn interest income
  • Earn investment income
  • Start an online business
  • Make and sell something online or offline
  • Provide a paid service
  • Network marketing
  • Affiliate marketing

The best way to start something is to get out and about and socialise with others. Very few people ever succeed on their own so look for other people with the same problem and see if you can solve it together. It might be necessary to do a course or get some advice before you start.

So give it a go.  If you never try, you will never know what you can achieve.

How important it is to always have some savings

The only certainty in life is that it is unpredictable.  So it is crucial to have some money behind you when the unexpected happens. Note that I said ‘when’ not ’if’.

It is a mistake to assume that life will always go on as it has in the past.  At some point, life will serve up lemons instead of lemonade.  The older we become, the more we realise that it can all change in an instant.  So saving money for a cash buffer sooner rather than later is essential.

Have you ever reflected back on life and wondered where all the money went?  In the majority of cases, the answer is largely towards managing a mortgage and providing for children and family.

This is not wasteful or frivolous spending.  These years are truly the most expensive of your life.  So if you are not careful with money, it is so easy to arrive at middle age with nothing to show for what seems like decades of hard work and sacrifice.

Lack of money at any stage of life is quite common.  When you have no savings, it only takes a serving of lemons in the form of a health crisis, a job loss, business failure or a relationship breakdown to put you in the worst financial position of your life.  This could happen at any time and a personal debt burden will only make it worse.

These are the circumstances where life really starts to go downhill; where desperation starts to override common sense and derail money decisions.  Your home might even be under threat at times like this, so borrowing more money, spending on credit, or even gambling might seem necessary just to survive.  Sadly, it only makes it worse.

You may not be able to stop the lemons in life but having savings behind you will always help.  So learning the discipline of ‘saving no matter what’ and squirreling money away during the good times (instead of spending it) are two very good money habits to get into early.  Oh, and rethink credit cards.  They can be as deadly as cigarettes.

It’s Never too Late to Save and Invest

It might appear tough to save but that thinking will keep you in your present comfort zone forever.  And will keep you poor and in debt.  It is a matter of prioritising saving over some of your current spending.  Notice I said ‘some‘ of your spending, not all of it.  Something has to give to make a change, and there is never a good time.  Mostly you just have to bite the bullet.  Your sacrifice doesn’t have to be big.  It can be small but it has to happen and you have to stick at it.  It’s the small changes over a long time period that produce the best results because they are the easiest to stick at.

Once you can spend less that you earn, or earn more than you spend, then you can save.   Once you have gathered some savings, you can invest.  It doesn’t have to be a lot to start with.  The main obstacle to investing is likely to be your lack of knowledge in this area.  So you will probably need some advice on how to do this sensibly.  But an amazing thing happens when you invest and grow your savings.  The law of compounding returns (e.g. interest on interest) kicks in and helps do some of the work for you.  You start making money while you sleep.  You don’t notice much at first but as the balance grows, the effect becomes more noticeable.

The seven (7) basic elements you need for the Law of Compounding Returns to work well for you, are:

  1. Start small and grow but a bigger balance is always better
  2. Add more of your own money to it regularly
  3. Injecting a lump sum will suddenly accelerate earnings
  4. Allow it to run for a longer time, provided that the investment is going well
  5. Every bit of investment return counts but you should be comfortable with the associated risk
  6. Keep fees or costs as low as possible to achieve the desired result
  7. Also think about who receives all this money if you pass away

C’mon, kick that debt and let’s get into the good stuff.




Credit cards are not the problem

So often, Australia’s household debt problem is blamed on credit cards, but plastic is not the problem. Greed, impatience and bad money attitude are the problems.

When credit cards were first introduced, back in the good old days they were seen as an emergency only safeguard. People would use the card only in emergencies, and then swiftly bring the balance back to zero when the cash flowed in.

But somehow, the reality that every card purchase is racking up more and more debt at around 20% interest has been forgotten in favour of buying endless must-have stuff.   And somehow, earning reward points makes it all ok.

It’s not ok.  When you start to believe that a credit card is additional income and an extension of available cash, you are in real trouble.  And the promise of reward points is merely a marketing mirage.  Here are the three (3) must-obey rules of credit cards:

The first rule of cards is that if you can’t repay your credit card to zero each and every month, then you are using it incorrectly.

The second rule of cards is that if you are chasing reward points, you will almost certainly have a high rate card.  That means you are paying around 20% per year on any outstanding monthly balances.  So the closer you get to free stuff, the deeper your debt becomes and the higher your monthly interest payments climb.

You don’t necessarily need to cut up your credit card, you just need to change the way you use them and take advantage of what they offer.

  1. With common sense and a budget, the convenience of a card saves time looking for an ATM or having to keep cash on hand; and it also keeps a record of your spending
  2. Sometimes the only way to make an internet purchase is to use a credit card
  3. Credit card is a very convenient way to pay and deal with currency conversion while travelling. It means you don’t have to carry a lot of cash and some cards offer related benefits such as travel & emergency assistance insurance

The third rule of cards is that you rule your credit card; it doesn’t rule you.



PS. Please try hard to find some money to save.  You’ll thank me later.

Dying With Credit Card Debt – What Really Happens

One of the biggest risks of living your life in credit card debt is getting used to it.  Allowing credit card debt repayment to become a normal part of your life is not a great idea.  There can be serious repercussions.  In life, carrying card debt seriously erodes your ability to save or sometimes even your ability to survive.  And if you think card debt is normal in life then you probably think it is okay to die with it as well.

Contrary to popular belief, if you die with card debt, it does not automatically die with you.  Credit card reward points might die with you depending on the provider’s terms and conditions, but the debt itself hangs around and, one way or another will adversely affect your family.

If you die as a joint owner of a credit card then the other joint owner, commonly your spouse, will be responsible for all of the debt whether they created it or not.

If you are the sole owner of the card, the debt still lives on to be repaid from your estate if there is enough money and saleable assets to cover it.  If the estate is insolvent, the card provider may consider writing off the outstanding debt; or they may not.  Depending on the circumstances, they may try to aim up at your surviving spouse if he or she holds other accounts with them.

But whatever the outcome, dying with card debt will have a negative impact on your family.  If a family member isn’t responsible directly, then it is likely to eat into your estate and subsequently decrease their inheritance.

The Credit Card Trap

You and almost half of all Australians are repaying credit card debt but what you may not realise is that you are being set up to be paying off credit card debt for the rest of your life.

The trap is this:

  • Believing that your minimum credit card payment amount is enough to avoid interest charges; and
  • Believing that you’ll get your credit card balance down to zero quickly if you keep paying the minimum amount (only) every month

In fact, the minimum payment amount is only the bare minimum you have to pay to meet the obligations of your credit card’s contract.  All you are doing is avoiding a late payment fee ensuring you can keep using your card.

If you continue to pay the minimum payment amount in the belief that you’ll get your credit card balance down to zero quickly, it will actually take you decades to pay off your debt.

And this is where the banks make their money.

If you only pay the minimum payment amount you’ll be charged a month’s worth of interest calculated on your balance each day for that statement period.  You will also lose your interest-free days for the next statement period, meaning interest charges will keep adding up.

So if you didn’t pay your balance (closing balance on your statement) in full last month, you will be paying interest on interest.

So the moral of the story is pay off your credit cards and take advantage of the interest free feature of your card.

Keep saving


Why do People get Deeper and Deeper into Debt

How does it happen?  Why to everyday normal, sensible people find themselves sinking further and further into personal debt?

The answer is not a simple one but here are a few common reasons:

  • Australian money culture has changed its money psyche from saving to spending
  • Because cash is largely absent from the purchase transaction, we have forgotten the old fashioned art of saving
  • The credit card is the new emergency fund and it seems that everything is an emergency
  • We are bombarded by so much choice of ‘stuff’ to buy
  • Addictions divert money away from wealth building to create debt
  • Handing over hard-earned cash has now been replaced by a mere click, tap or wave of a card or smart phone
  • Instant credit is so easy to get and comes as plastic or a phone app
  • Most people do not understand how a credit card actually works (e.g. rate, interest free days, billing cycle, what minimum payment means)

Because most people don’t do a budget or plan ahead with their money, they don’t realise that they are drifting off track with spending until it is too late.

The answer of course lies in a basic understanding of managing money.  Whilst earning is the source of all personal wealth, it is saving that is the foundation of prosperity.

At Change My Fortunes, we have developed a new product for you.  Not only is this the best app for budgeting, but you can also check your discretionary spending and guide yourself out of credit card and personal loan debt.  This unique web-app is called Change My Debt Stress.  Download it now at   http://changemyfortunes.com.au/products.



Getting in Over Your Head

Why does a level-headed, sensible person like you get into so much debt?

Statistics show that more households are living beyond their means and relatively few are keeping even a simple a household budget.  This is a big worry because it shows that personal money management problems are getting worse in Australia, not better.

Credit cards are increasingly being used to pick up the spending shortfall that household income can’t cover and overall, households are saving less.

Add to that the new-age attitude of entitlement where wanting now and buying now means having now and pay later.

It is a recipe for disaster.

Even without debt, financial hardship is never far away if you have no savings and no resources to fall back on.  It only takes one thing to go wrong in life; a crushing blow from left field or even a simple misadventure to send your household into financial chaos.

So let’s look at the reasons why you and so many other people are in over their head with personal debt.

  • A poor understanding of the basics of money management
  • Not enough income for your level of spending
  • Living life week to week with no plan for your future
  • No constraints on spending
  • Your attitude of ‘I am entitled right now’
  • Credit is easier than saving
  • Treating a credit card as an additional source of income
  • No understanding of how your credit card actually works
  • Emotional or addiction problems that are reflected in your spending
  • No savings and nothing in reserve
  • No reserves, contingency or financial protection

At http://changemyfortunes.com.au we have just the product which you can follow to check your discretionary spending and guide yourself out of credit

card and personal loan debt. This unique web-app is called Change My Debt Stress. Download it now at http://changemyfortunes.com.au/products.