How we think of our finances

I have several people in my life who also have ongoing finance issues. For example, my brother likes to buy big ticket items- 42" tvs, $5,000 laptops etc. (on store payment plans), even though he has student loan debt and cannot afford to run a car or buy a condo because he lives paycheque to paycheque.

Another friend usually does not spend much because she can't, she doesn't make enough. Crippled with student loans and credit card debt, she often is without money. There are reasons for this, and she is looking for new opportunities to change this. However, nothing has yet changed and she emailed me this morning saying she had bought a laptop. I don't know how, but yikes that seems scary.

These people got me thinking this morning. Until a few months ago when I started to see the light at the end of the tunnel, I realized that when I look at our bank accounts I would always see the following as "available" money: student line of credit, credit cards, and overdraft. The bank makes it so easy to have this mindset. When I am on the online banking, the balances show "available" and "actual" balances. This makes it easy to ignore the zero balances, or negative balances as log as there is an available balance, even if it is all borrowed money.

But what happens when the available balance is zero? That is when bills go unpaid and creditors start calling. I am so scared we will slip back in to this state, make a wrong move. It is easy to judge others, but we weren't there long ago. Blogging helps, so I will keep that up!

5 Comments:

  1. Louise said...
    Good comment and so true. Our bank recently changed the format of the online banking display to show available funds. I think it encourages people to spend it. When the mortgage payment is ahead it show the extra amount as available funds, all we have to do is click on a button and we can spend the money. we don't have a redraw on our loan so I rang the bank to get it removed. They said they can't it's a new 'service' they provide for customers. How kind of them!
    nomorespending said...
    Hi
    Blogging definately helps. It has re invigorated my efforts.
    Good luck:)
    Jaffe said...
    Hey, while searching for widgets for my blog, I stumbled upon www.widgetmate.com and wow! I found what I wanted. A cool news widget. My blog is now showing latest news with title, description and images. Took just few minutes to add. Awesome!
    Louise said...
    I have tagged you for the Thinking Blogger Award. I love your blog and if does make me think about things. Check out the details on my blog.
    Mr. Cheap said...
    Good post! I think you're right that many people view available credit as the same as money in the bank, and that's a VERY dangerous perspective to have.

    On the other hand, we're not children. Asking financial institutions to hide credit from us because we can't control ourselves seems a little extreme (that's like trying to get McDonald's to shut down because we can't stand the temptation of walking past it without getting a Big Mac).

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