Change Your Think into a Thunk: Stop Giving Your Money to the Rich-Part 2

Yesterday kind of got me on a roll so I decided to make another installment on this topic. Yesterday I demonstrated how most people willingly give their money to the rich every day through interest payments by choosing to buy an everyday coffee or other somewhat frivolous item rather than paying down their debt. In doing so, they are voluntarily giving their money to the rich in interest payments every month rather than choosing to pay down debt. Not only does this make that coffee cost that much more but the money goes to the rich.

But there is another whole aspect to this which is the use of credit cards. I am not talking about credit card debt this time. I am talking about the tiny percentage that goes to the rich every single time you use your credit card. That’s right! Even if you have a 0% interest card and pay it off at the end of every month, the simple fact that Americans use credit cards takes thousands and thousands of dollars out of our communities and puts that money into the hands of the rich every single day.

Here’s how it works. Businesses know that customers want to use credit cards for convenience. This means that businesses pay the credit card companies processing fees and costs. Depending on the credit card company, the cost for processing will be about 1.95%-2.50%. According to instoredoes.com “Although all credit card processors are subject to the same interchange and assessment rates for their issuing bank, the merchant services provider you select can change your costs by thousands each year. On average, however, credit card transaction fees on a $100 charge would amount to between$2.50 and $3.” This is from a 2013 article. http://instoredoes.com/making-cents-of-credit-card-processing-fees/ Credit card processing fees can be very complicated so it’s hard to know actual costs. However, because of the high demand for credit card use among consumers, businesses know that their sales will go up if they take credit cards even though they have to pay these fees to do so but what it means is that thousands and thousands of dollars leave every single community in the Unites States every single day by the choices everyone makes. Even though these fees seem invisible to the consumer, prices rise on everything because of them and so consumers end up paying the costs even though they are not seen. 

Many people complain about the shrinking middle class and so much money going into the pockets of the rich. Especially those who complain about and are concerned about the shrinking middle class should consider controlling what we can control.

Now I am going to be honest. I do use credit cards and I use them to my advantage. Credit card companies pay me to use their credit cards. Why? Because we either pay 0% or pay the cards off at the end of every month. Still, credit card companies want us to use their cards even though they give us rewards like airline miles and cash back. Why would they do this? Because of transaction fees they get from the businesses. However, sometimes I pay in cash because I know that this money goes out of our communities and I just hate that. If we all started paying more often in cash, we would keep a lot more money in our communities.

Have you ever read articles about how only criminals need cash? Boy would credit card companies love for us all to think that! If we all used cash everywhere, it would cause a revolution. A real revolution! We would have thousands more dollars to invest in our communities every single month.

So, my opinion is this: If you want to support your communities pay off consumer debt, car loans and student loans before you support your community by buying from them. After that, you will have much more money to support your communities with. And, when you buy, don’t use credit cards as often or maybe not at all. (There are no hard and fast rules to this-we each need to tailor make how we apply these principles and there is no judgment here!)

But we have so much more power than we think. We are not powerless. We can make a difference.

Stop giving your money to the rich!

Happy Savings!

Change Your Think into a Thunk: Stop Giving Your Money to the Rich!

 We hear a lot these days about the rich and how horrible they are and how they get all the breaks. But today, I want to let you in on a little secret. Most Americans voluntarily give their money to the rich every day. “What???” You might say? “No way! People do not voluntarily give their money to the rich! People struggle! People suffer financially! They don’t choose to do this!” To this I say “Yeah way. Every. Single. Day. People line up and voluntarily give their money to the richest among us.”

“How can this be?” you might ask. First, let me tell you a little about myself. My husband and I got married very young, had a baby right away, had no college educations (still don’t-although I am working to change that) and were dirt poor. We did not rely on our parents to help us out and it was tough. Over thirty years later, after many bumps in the road (lost jobs, cancer etc.), we own a thriving business and are doing well. If we had listened to the people who claimed we were victims of circumstance, with no hope, we never could have gotten to where we are now. Through hard work, smarts, force of will and the blessings of God, we have what we have now.

It is true that you can’t control everything and sometimes things are beyond your control. But there are things you can control and that is what I want to talk about now. What you can control is this: Stop feeling like a victim and stop giving your money to the rich.

Step one: Stop throwing your money away on things that are not necessary. Let’s pretend that you don’t spend $5.00 (Starbucks) a day on coffee but just $1.00 a day. You might even think you are being frugal! That $1.00 cup of coffee you get from the convenience store every morning is unnecessary. ($30.00 a month! Brew your own at home!) That $5.00 lunch you get 6 times a month is unnecessary. ($30.00 a month! Pack it from home) Whatever and wherever you spend money on unnecessary things, figure it out and change your routine. Then comes step two.

Step two: So, let’s say you didn’t buy that coffee or that lunch this month. You just saved $60.00 a month! Now, let’s say you have a credit card balance. 

According to Money “On average, an American between the ages of 18 and 65 has $4,717 of credit card debt. According to CreditCards.com, the average credit card’s interest rate is 15%. At the minimum payment of $189, it’ll take 10 years and a month to pay off that $4,717. The total payments would amount to $22,869. That’s a $18,155 cost for a very small loan.” http://time.com/money/4213757/average-american-credit-card-debt/This is talking about the average American. That is a singular person, not a family. According to CNN, the average American family owes $8377 in credit card debt alone. So, if you as a single person, had a credit card debt of $4717 at 15% interest rate and paid the minimum every month, you would pay an extra $18,155 for the privilege of having that debt. This is how millions of Americans give money to the rich every single day. By choice! “But it’s not a choice!” you say! And I say “It is a choice when you continue to buy that $1.00 coffee every day instead of brewing your own. Instead, you could be paying off that debt ahead of schedule and it is very important that you do not charge anything else!”

Americans give money to the rich every day with interest on house payments, car payments, student loan payments, credit card debt etc. etc. Admittedly *some* of that is necessary. But Americans give money away like floats throw candy away at parades and then complain about the rich having all the money.

The way to get ahead is to change your think into a thunk. Instead of *thinking* the way most Americans do, say “I thunk that”. Past tense.

Americans are rich beyond measure. We are rich beyond many societies of the past and present. Our problem is less one of not having enough than managing it well. Yes, there are some who truly struggle. I know. I did too. But giving your money to the rich is not a way to win this game. Once you tighten your belt and learn to stop giving your money away and get your debt paid down, you will see how fast it can grow. Then….

Step three: Once you stop giving your money away to the rich, you can invest your expendable income and your money can grow!

I hope with the new tax bill breaks coming up that people will not give their extra money to the rich and instead invest it into themselves. I hope instead of taking that extra vacation, buying those extra clothes, buying that TV etc. that Americans will instead to choose to get rid of debt and make wise choices for themselves.

Change your think into a thunk and stop giving to the rich!

Happy Savings!