Have you ever been in handcuffs?

joyfulguyJune 10, 2010

Fear not - if your answer needs to be a positive one, feel free to keep mum at this point.

If you haven't ... I haven't, either - and hope not to ever be so, either.

It really restricts one's freedom of movement ... and one can't get anything useful done (if the arms are behind one's back).

However ... many people are in financial handcuffs.

And in most cases, they choose to do it to themselves.

How is that?

They live paycheque to paycheque.

Most financial advisors recommend that everyone should have three - six months' worth of income available, in case of need.

In today's uncertain economic climate, who knows who may be laid off next?

And be unable to find employment with anything like comparable compensation level ... or with far fewer additional benefits, e.g. retirement plan, etc.

If the motor of your car has a major trouble, and needs large repair, e.g. $1,000 - 2,000. how would you handle that?

Or how about if your furnace quits and you need a new one?

It sure is handy to be able to take care of such things easily with available funds, without sweating ... and especially without sweating blood, so to speak.

I call that financial freedom. And I like it.

Some will answer that they'd put the expense on the credit card.

I agree, that in many cases, that may not be a bad idea ... and I do that, myself, on occasion.

But - to be used on one condition: that you pay off that credit card debt in full, just after your next billing date.

Don't carry credit card debt over a number of months.

Do you have any idea what interest rates they charge?

With regular "credit" (really "debt") cards, it's usually about 15 - 18% annual rate - and compounded monthly.

And don't miss, or even be late with a payment! A big extra fee if you take that route!.

And cards issued by most stores ... charge about 28% annual rate, or some even higher.

I don't like paying such high rates of interest!

And ... since most of the stuff that most of us buy using our card is non-deductible stuff, we must pay off those bills with after-tax money!

It seems to me that the work that I do to earn the money to pay that interest is more or less working for nothing.

Your comments??

Good wishes for arranging your affairs in such a way as to avoid carrying consumer debt.

ole joyful

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maifleur01

Could get even worse received mailing by BofA that they can now request payment in full if delinquent. Many people will be in a fix if they actually follow through.

When I saw the title I thought it was spam with kinky sex.

    Bookmark   June 11, 2010 at 1:19AM
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western_pa_luann

Oh, Ed!
Quite the title.

    Bookmark   June 14, 2010 at 5:07PM
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davidro1

Far in the future, there may be a way enabling humans to display their financial savvy.
It would have to be a way that includes having one's financial acumen checked, verified, confirmed.
Or else it would be meaningless.

People like to have things that show they are __(insert adjective here)__ .
Some flash jewellery, some flash clothes or shoes, some have cars, and some have toys.
Anything goes.

Some have credit cards that say "member".
To me, a member of that kind was always a sucker, not a sharp person.
But I know I'm not average (in the middle of the curve) when it comes to assessing situations.

Far in the future, there may be a way enabling humans to display their financial savvy.
Then, human nature could be the driving force making people into better judges of risk/reward, better risk-takers, better managers of their need for some gratification along the path of hard work.

Some people get nervous when their savings accumulate beyond a certain level.
It doesn't correspond to how they see themselves, so it upsets them deep down.
They find things to "need" in order to deplete their savings down to a lower level, and thereafter they sleep better at night and feel more rested relaxed and at peace with themselves, for a while.

Calling it handcuffs is nice.
It's one more metaphor in the field of metaphors.
It increases tension in the mental field.

A reward would be nice.
A way enabling humans to display their financial savvy.
Then, we could let our human nature chase that reward scale, while we also do the right thing.

hth.

    Bookmark   June 16, 2010 at 12:21PM
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joyfulguy

Money ...

... a wonderfully helpful servant.

A horrible master.

Best to let it know, early on, as one does with a new (non-feline) pet ...

... who's boss!

ole joyful

    Bookmark   June 16, 2010 at 7:47PM
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davidro1

ANOther metaphor !!
Master, slave, boss. This is highly abstract thinking.

    Bookmark   June 17, 2010 at 10:05AM
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erikat

Yes I am currently in handcuffs. But I am learning my lesson and hopefully in a years time I can get out of it.

    Bookmark   June 18, 2010 at 5:09AM
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jkom51

Tom Lauricella wrote a column on FatherÂs Day in the WSJournal. It was titled "Dad on Money: 'Do as I SayÂ'

His parents are in their late 70Âs. They were actually doing well financially, but fell into the trap of using credit cards and pulling money out of their RE holdings and retirement accounts to finance some (not all) basics, such as appliances and home maintenance.

(excerpt) ... "By no means were my parents loose with their money. Our cars were driven until they fell apart and we were the last family I knew to get a color television.

But credit-card debt is easy to rationalize. "A large purchase is needed for the home," my parents recall thinking. "OK, let's charge it, we can pay it off. Another important item is required. Charge it. Emergency repairs to home and car...charge it."

Of course, that works only as long as the paychecks keep coming in and keep getting bigger. When I was young, my father was unhappy with his job so my parents went into business with a franchise that left them deeper in debt. But they sold off some of our property to raise cash, my dad found a new job and they stayed afloat.

"Unfortunately we still hadn't learned to systematically budget and plan ahead," my parents say. "When jobs are lost, life insurance and pension funds are usually cashed in and eventually that happened again."

Compounding matters, my parents ended up selling their home, an apartment at the time, into the depressed real-estate market in the early 1990s."

It ends with the paragraph: "Plan far ahead," my parents say. "A 10-year plan is of no avail. A 20-year plan is insufficient. A 50-year plan is what you need, and ignore the 'charge it' and 'cash it in' impulse. Teach your children to do the same."

    Bookmark   June 23, 2010 at 3:49PM
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joyfulguy

Knowing that I have enough cash available to cover any emergency (within reason) gives me a very comfortable sense of freedom.

I like that a lot better than handcuffs.

Hi erikat,

Have you read a number of suggestions on this and the "Household Finance" forum?

There've been many suggestions offered to allow one to reduce one's costs, without interfering too much wioth one's lifestyle, thus freeing up more m,oney to pay off those credit card bills ... and saving those huge interest costs.

If you'd like to share some of your ways of doing things, I'm fairly sure that some people here coulod offer you some worthwhile suggestions.

Good wishes for achieving yiour goals without sweating too much blood in the meantime.

ole joyful

    Bookmark   August 3, 2010 at 4:56PM
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colorcrazy

Funny, I have no debt, but have a job that pays well enough that it is considered "golden handcuffs." I have a list of things I want to do before I retire. The most expensive is replacing the old wooden front porch, which has some rotting boards. By next spring, I'll be asking myself why I am still working. If I still feel like I am making a difference, I will likely continue.

Thanks, Ole Joyful, for a good chuckle.

    Bookmark   August 21, 2010 at 7:14PM
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joyfulguy

Fancy shoes ...

... don't look much like handcuffs.

(and how does one know that they're "Christian" - except that they so advertise).

I've met some folks that let you know that they're "Christian".

In some cases I tend to get a firm grip on my wallet, at such times.

ole joyful

    Bookmark   October 7, 2010 at 7:16PM
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joyfulguy

Any further comments?

I still prefer to have a financial cushion on hand, in case of emergency.

I drive an old car. Recently, in a city about 100 miles away, taking my son and a friend to a Santa Claus parade, where they blow up long balloons and twist them into shapes for the kids, I was a bit too close to the car ahead when the signal light changed. Braked hard, the brakes worked for a while ... then lost about half of their stopping strength. I'd blown a brake line, leaving some brake fluid on the road: I prefer to have the lines intact, keeping the fluid where it belongs, where it can keep working at full capacity.

I hit the almost-new Acura ahead a light blow ... the bolts that hold the licence plate on the front of my car put a couple of dimples into his bumper.

It cost over $800.00 to fix his car ... and over $600.00 to repair my brake lines and replace a couple of cylinders on the wheels where the valves for bleeding were too corroded to be opened.

I withdrew the money from the bank and took it down to pay those accounts when I picked up my car ... and paid for dinner, gas and some extra for a friend to take me down to pick up my car.

Plus ... I should pay for son's girl friend's gas, at least, plus some extra, for her to come down to save our bacon on the evening of the accident, bringing us home.

It sure felt nice, knowing that I had enough money on hand to pay those bills.

ole joyful

P.S. Here's a suggestion ... if you drive an older car, every now and again, while you have the engine running and ready to drive, at home, push the brake pedal really hard, which builds more pressure in the brake lines.

If you blow a hole in one, so lose much of your braking capacity ... better to do it while sitting in your yard rather than while following another vehicle as you approach a traffic signal that just turned yellow.

Better yet - push that brake hard while sitting in front of the garage where they do your repairs, so you're at the place where the repairs will be done, rather than needing to do some very careful driving, or getting a tow, from your place to the garage.

Could save you some major damage to both people and vehicle(s).

o j

    Bookmark   December 2, 2010 at 7:33PM
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someone2010

I always tried to keep fifty thousand in my bank account for those emergencies. Tried is the operative word.
I'm also working on my second million. My first was a failure. But I like the handcuff idea. My wife, not so much.

    Bookmark   December 9, 2010 at 3:50AM
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busybee3

so, brake lines are not something that are inspected during "check-ups"?? we have an older car and recently had new brakes pads etc on...always gives me a sense of reassurance when brake work is done! (false reassurance??)

totally agree that avoiding handcuffs at all times(literal and figurative!!) provides so much peace of mind!

    Bookmark   December 10, 2010 at 11:10AM
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joyfulguy

I was about to say that if I had $50,000.00 ...

... I sure wouldn't keep it in a bank account!

Paying about (maybe) 1.33% ... called "interest", that in Canada is taxed at top rate - if it's 25%, leaves me with 1% in hand, after paying tax.

And ... inflation eats up a part of one's dollar-denominated asset each year ... and what's the rate of inflation, these days - about 2%?

And some of the fast-rising prices aren't included in the list of things that most of us use, but are left out of the calculation, e.g. some food and gas.

But ... in recent months I've had a substantial amount (not nearly $50,000.00) in cash or near-cash, e.g. money market account, that isn't really producing much.

So - I guess that I'm not as smart as I was claiming.

Oh, well - who ever said that humans were ... consistently ... consistent!

ole joyful

    Bookmark   March 3, 2011 at 6:50PM
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jannie

My Dad told me the best advice I've ever heard: "Money is a great servant, but a terrible master." By the way, I've never been in handcuffs. No kinky stuff. But I did have the sad experience of seeing my daughter handcuffed after a DWI accident. She was 16. She's now 21 and has fully paid for her crime- a trial, a hefty fine, community service, alcohol rehab, the loss of her drivers license for 5 years.

    Bookmark   March 16, 2011 at 10:29AM
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joyfulguy

I've received ... and given (here and in other forums near here) ... the same advice that Jannie's Dad offered:

"Money is a wonderful servant - but a terrrible master!".

One of the foundation stones of building an effective money-house.

ole joyful

    Bookmark   April 18, 2011 at 7:11PM
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dreamgarden

Best way to save money is to pay cash for everything. A plastic card doesn't feel the same as watching those greenbacks go from your hand to another's.

    Bookmark   April 22, 2011 at 2:45PM
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vala55

Twice, but it was called marriage. LOL

    Bookmark   April 27, 2011 at 6:09PM
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joyfulguy

Hi Vala ... who at 55 should have learned some things about life,

Your message wouldn't just happen to be slightly off-topic, now, would it??

I was married - once: divorced at about 40.

People said that I should get on with my life ... marry again ... asked why I hadn't.

I said that after one had been run over by a truck ...

... that when one heard truck wheels coming down the road ...

... one began to shake.

ole joyful

    Bookmark   June 2, 2011 at 3:31PM
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joyfulguy

In these days of uncertain employment, carrying a mortgage, plus possibly a car loan ...

... and, horror of horrors, substantial credit card debt, at their high rates (mentioned earlier in this thread) ...

... losing one's employmjent could cause something of a financial train wreck - and that not too long into the future.

Having a financial cushion offers a great deal more wiggling room ... financial freedom.

I like that scenario a great deal better ... especially if one has a young family depending on one.

ole joyfuelled

    Bookmark   September 8, 2011 at 9:25PM
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joyfulguy

Some years ago, many people had jobs building locomotives in a nearby city for General Motors ... but when GM was near bankruptcy, they sold off assets, including the factory building the locomotives.

Another company bought the factory and, for whatever reason, things didn't go so well, or maybe they'd planned that.

Another corporation in the large equipment field bought the factory a while ago.

Many of the workers have been making something over $30.00 per hour. The new owner said that they'd pay about $16.00 - take it or leave it, and when the contract expired, locked the workers out.

Within about a month, one of the workers, interviewed on the radio, told of being embarrassed to have needed to go to the food bank.

If I've been making $30.00+ per hour ... no way am I going to be so strapped that I have to visit a food bank within a month of the paycheque stopping!

Don't live paycheque to paycheque, folks!

Plus ... if you carry substantial consumer-related (as contrasted to investment-related) debt, e.g. credit card balances carried for a number of months ...

... that's what I call being in leg irons, in addition to the handcuffs!!

ole joyful

P.S. Part of the story is that, about three or four years ago, U.S. folks coming to visit Canada could get a Canadian buck for about 70 cents ...

... and lately they've had to pay from US 96 cents to US$1.05.

I suggested to some folks here, back then, that it might be a good idea to move some money offshore, possibly to Canada.

o j

    Bookmark   February 8, 2012 at 5:58PM
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joyfulguy

That plant, where they've built GM diesel locomotives for years, the workers were offered $16.00+ instead of over $30.00/hour, wouldn't accept and were locked out.

Plant closed by owner, U.S. corporation famous for building earth-moving equipment ...

... production now being carried on in rejigged plant in U.S. ... in a city where there`s been substantial unemployment.

Back when there was a gas shortage, including major price increases, in the mid-`70s, when I was working in a plant making travel trailers and truck campers, I`d been saying that we should be concerned for increased efficiency in our production, and most workers said dismissively that such was management`s concerns.

I said that if, with major increases in the price of gas, many folks decided to rent a motel at the other end of a vacation instead of buying a travel trailer ... that some of the trailer builders would be out of business, and that it was in our interest to be so cost-effective that ours wouldn`t one of the ones closing its doors.

My argument ...fell on deaf ears.

ole joyfuelled

    Bookmark   December 27, 2013 at 7:43PM
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