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“Whatever you have, spend less”

– Samuel Johnson.

Every day we make decisions about money, which have an effect on

our standard of living. Sometimes they are only small ones,

not related to the above-mentioned areas of life.

Daily you have to make financial decisions on which items to spend your

money. You are in effect the managing director of your family’s business.

Spend more than you get in, your company (business) will soon go broke.

Consequently, you have to ensure that you live within your means and

balance the household books (weekly or monthly depending on pay-day)…

otherwise you will get into financial difficulties.

The more money you are able to save each week or month,

the higher will be your ultimate standard of living;

although being a miser will not bring happiness. You have to

strike a balance in your life between saving and enjoyment (= spending).

After all, who wants to get to a comfortable retirement after a lifetime of

frugality and no memories? We all know that “penny-pinchers” and

“Scrooges” are often the most unhappy people in the world and that it’s

always better to give than to receive. Is it really, or only for saints?

Your household finances are run just like a business.

At the end of each month, how much of what you earn stays in your

own pocket? You will probably find, like most people,

that you are paying everyone else but yourself:

the butcher, baker, candlestick maker and other accounts,

like paying off the car repairs and windows broken by the kids

(happened last week – “Oh bother!”).

Unfortunately we can’t do without money. Also, the older we get,

the more we normally need.

You get used to a certain standard of living and comfort,

but as you get older you need far more capital than you thought.

We will look at those various life stages we go through,

together with our major financial responsibilities.

The main areas that affect us over our lives include:

# buying a home

# choosing a mortgage bond

# medical cover

# children’s education

# budgeting

# planning for lifestyle goals (e.g.. a new home, car, holiday, business)

# replacement of consumer items, like car, furniture, washing machine

# retirement planning

# investment planning

# estate planning for very wealthy people (I don’t know if the UK and the

USA have estate duty. NZ has done away with it)

# professional services (such as: legal, financial)

Of these, retirement planning is probably the most important priority;

because we have to spend a significant portion of our life when we don’t

have any income coming in.



I believe this is the reason why so many people have a needless struggle

with their finances.

1.poor debt management through excessive borrowing – not being able

to live “within your means”.

2. failure to monitor their financial position.

3. lack of motivation (desire) to take action.

4. lack of foresight in looking ahead.


5. failure to set financial plans for the future. Most people don’t

plan to fail, but fail to plan.

6. lack of knowledge. Financial ignorance can prove expensive.

7. inadequate protection against unforeseen events (life and general insurance),

such as death, disability and physical losses.

8. procrastination in taking remedial action. And most importantly,

9. lack of discipline in saving habits.


10. poor investments: you either pay too much tax on them or inflation eats

into your return, or both…so that you money actually goes backwards.

Even worse, you could lose all your money if the company to whom

you gave your money goes ‘broke’.


>From the above we can see that some basic financial knowledge is vital for

all people to survive in the financial ‘jungle’ that is today’s world.

Gaining financial knowledge takes time, effort and discipline.

You are the manager of your finances , so make a PLAN to reach your financial GOALS.

Then implement it.

ACTION is the key word.

Good luck

Craig Lock


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