Money Matters

 

bankruptcyMONEY MATTERS

Too much money or not enough money can be the cause of anxiety and stress which can affect our well being.

“Who is rich? – He that is content”   – Benjamin Franklin (1706 to 1790)

“If you can count your money, you don’t have a million dollars” -J Paul Getty (1892-1796)

Money Does Matter

  • Money is a Tool
  • A lack of money will affect your well being.
  • Being anxious to conserve money will affect your well being

Your Attitude to Money Matters

  • Retain Control over your life
  • For Well being
  •  For Peace of Mind

Understanding Money Matters

  • History of money
  • Purpose of money
  • Wise use of money
  • Alternatives to money

The Matter of Living with Little Money

  • Scrimping
  • State entitlements
  • Charities

The Matter of those who want your Money

  • Recognising marketing hypes and scams
  • Learning to say no

 

MONEY IS A TOOL

Money, in its various forms is an important tool of our social system. It evolved to meet the intricate needs and demands of a constantly developing society which has always been ready to take advantage of advances in the means of production and new technologies. The animal kingdoms take their needs from the natural environment. Choice for them can be very limited and subject to what is immediately available and affected by the seasons. Choice for us can be immense and available from all over the world and not subject to seasonal restrictions.Money enables us to obtain our needs easily and from afar. It is a must have tool for us all. Without the tool of money choice would become very limited and availability severely restricted. A society without money would be much different. Our needs would alter to reflect a change in our culture which would have to centre on exchange or barter.

A Lack of money will affect your well being

Continuous stress caused by anxiety can affect our well being. We can experience behavioural problems such as sleep deprivation, eating disorders, a sense of isolation and depression.

These behavioural problems can lead to cognitive outcomes such as memory loss, lack of concentration, constant worrying and focusing on the negative. Our physical health can also be affected. There can be a lowering of the sex drive, and an impaired immune system can mean that we will have more colds. We may also suffer from nausea and diarrhoea, and have chest pains and a racing heartbeat. The use of drugs, alcohol and cigarettes as a way to relax will further adversely impact on our physical well being.

Being anxious to conserve money will affect your well being

Humans have evolved as hunters and gatherers. Accumulation of some wealth can be likened to “squirreling”- putting aside for a rainy day. The desire for more and more money, though, regardless of the amount already squirreled has little to do with money but more to do with a lack of security. It can be viewed by some as a status symbol and by others as a measure of success.

Others with an insatiable desire for more and more wealth are driven by greed. People having money can worry that their money may run out. They can be concerned about job security, the return that they receive on their savings, whether their pension pot will be enough and how to deal with constant pleas from family and friends for financial help. They can be said to be suffering from the “if” syndrome.  Those with too much money (for some there can be never too much money) can be concerned as to whether they have made the right investment decision to increase their money. They can also be concerned about their money being conserved after they have died! They may feel that their children will squander their money. So having enough money or a desire for more and more money can be as stressful and lead to the same anxieties if we had little or no money. Our well being would be affected. We would not enjoy our money.

YOUR ATTITUDE TO MONEY MATTERS

Your attitude to money matters. How to deal with having too little or too much money matters. It matters because by recognising that money is a tool and important in our lives we can then adopt a strategy to deal with having too little or too much and retain control over our lives.

It is only by retaining control that you can make a difference to your life and make the decisions necessary to avoid the anxieties that otherwise will ruin your life. It is not the lack of money or having too much money that ruins our lives; it is our attitude to money that can ruin our lives.

Your attitude to money matters for well being

The right attitude to money matters is good for our well being. We will be able to remain positive, dispel the negative emotions of envy and fear and we will find that we will be able take the positive steps necessary to improve our lives.

Your attitude to money matters for peace of mind

Improving your well being will also improve your peace of mind. You will become calmer and this will lead to greater contentment. This greater contentment, with the knowledge that you have taken control over money matters, can give rise to the desire to take control over other aspects of your life. A realisation that you have become the master over money, not the slave to money is likely to produce within you the desire to become the master over other matters in your life.

UNDERSTANDING MONEY MATTERS

To help us fully understand that money is a tool we need to understand money, its history, its purpose, the wise use of it and alternatives to money.

History of Money

Banking came before money. In ancient Mesopotamia and Egypt harvests were deposited in warehouses which provided safe keeping for grains and crops. Deposit receipts were issued and these receipts could be likened to bank notes as they were often exchanged for other receipts for different grain and crop deposits. These receipts were used like money is today although in early times the transaction was more in the nature of exchange or barter. Often commodities were chosen as preferred items for exchange as they were easily stored, had high value and were easily transportable, or were very durable. These commodities were widely desired as they were easily exchangeable and became acceptable as if they were money. Also cattle and livestock became a unit of exchange in many societies especially in Africa.                                   The word to “pay” comes from the Latin word “pacare” meaning to pacify, appease, or make peace with. Peace was often achieved by using these desirable commodities as a tribute or as compensation for a wrongdoing. The expression “worth one’s salt” is ascribed to Roman times when soldiers received some of their payment in salt and this supposedly gave rise to the word salary.

Later precious metals – gold and silver were used for exchange as well as the deposit receipts. This gave birth to coinage. In more modern times the use of precious metals, particularly gold was used by governments to establish a standard value for their currency. Governments would set a fixed rate (value) of gold for their notes and coinage in circulation and guarantee the exchange of their currency to other governments in gold if demanded. This became known as the gold standard. Most countries abandoned the gold standard during the great depression of the 1930s. America was the last country to leave the gold standard. In 1971 France demanded America exchange the dollars it held for gold. This forced America to abandon the standard because of its dwindling gold reserves due to the heavy cost of the Vietnam War. Nowadays money is held in many forms. As well as notes and coins.

Purpose of Money The simple purpose of money is to enable the easy transfer of goods and services between one person and another. The amount those goods and services are perceived to be worth enables a value to be placed on them in terms of money. This is useful in helping us to decide which goods and services we need or want. For most of us this value will help us quickly to assess our wants. Most of us will not expend emotional energy wanting a yacht because we know we could never afford one. The use of money as a means to place values on things enables us to “squirrel” money and have a good idea what we will be able to do with our squirreling when saving for a rainy day.

WISE USE OF MONEY

Those with money

By understanding that money should be used as a tool rather than a status symbol and not accumulated without purpose we can dispel many of the negative emotions surrounding money and thus view and use money wisely. You will not only feel good about it, but if everybody did that, money would once again be used to exchange goods and services; this would promote activity which in turn will mean that there would be a greater demand for services and the increased flow of money will mean that those with little money will have the opportunity to have a little more and those with money even more.

Accumulated money which represents the value of earlier exchanges, if withdrawn from circulation, is no longer available for exchange. Economic worth represented by non-cash possessions would be better for the whole community and indeed better for the individual who had previously accumulated money.

Those with too much money take note if you wish to reduce your anxieties about conserving money. Money withdrawn from circulation will have the effect of depressing economic activity leading to more people finding themselves short of money. Many of those without money have become wise to this and have found alternatives to money with resultant increases in economic activity and individual economic worth.

 Those with little money

Those with little money must remain positive. With a positive attitude you will able to make things happen to change our finances for the better. As well as the obvious to be careful with what you spend, we need first to separate our needs from our wants. Prepare a budget of your expenditure either weekly or monthly. Preparing the budget enables you understand if you have a shortfall of income to meet the budgeted expenditure. Where there is a shortfall do not panic. This next section of this article “The matter of living with little money” sets out advices and hints as to how to reduce your expenditure and make your money go farther and details the help that is available to you from charities and by way of state assistance. When talking to charitable organisations your budget of expenditure will be of help to them in understanding your finances. Very often those with little money would have accumulated debts and be living in fear of debt collectors knocking on the door. Those people need special advice from debt experts. Do not accept help from Debt Management companies. These organisations are in business to make a profit (from you) and you could find yourself worse off. Instead there is very good free help and advice available from voluntary organisations such as the National Debt line and the Citizens Advice Bureau:  www.nationaldebtassistance.co.uk/Gov  www.citizensadvice.org.uk/

ALTERNATIVES TO MONEY

There are a number of alternatives to money to obtain the goods or services you require. All of these alternatives are based on the old system of barter and are often referred to us alternative currencies. Community involvement is required. Check first to see if any schemes operate close to you. If not, consider organising one yourself with some friends and launch your own scheme. Most schemes fall into one of the following types: –

(1)  Local Exchange Trading Systems (LETS): These are locally initiated, democratically organised, not-for-profit community enterprises that provide a community information service and record transactions of members exchanging goods and services by using the currency of locally created LETS Credits. LETS networks use interest-free local credit so direct swaps do not need to be made. In LETS, unlike other local currencies, no scrip is issued, but rather transactions are recorded in a central location open to all members. As credit is issued by the network members, for the benefit of the members themselves, LETS are considered mutual credit associations.

(2)   Hours: a form of local currency system based on hours of time. An hour  is valued at a predetermined value (say£10.00) or it can be negotiated. Hours worked are recorded centrally and can be exchanged for hours or goods. Thus a carpenter (say) can undertake work for a business or an individual and obtain a credit of hours or value which can then be exchanged for services of another in hours or for goods to the value of the hours or part thereof.

(3) Time/Bank: is a platform where groups and individuals can pool and trade time and skills, bypassing money as a measure of value. Time/Bank is based on the premise that everyone has something to contribute and that it is possible to develop and sustain an alternative economy by connecting existing needs with unacknowledged resources.

(4) Mutual credit: is a form of alternative currency.  Any form of lending that does not go through the banking system can be considered a form of alternative currency. Mutual credit can be used alongside any other scheme whereby members can receive goods or services in advance of working or providing goods.

There are many schemes operating successfully to the benefit of those participating. Many have been credited for helping local economies grow.

 THE MATTER OF LIVING WITH LITTLE MONEY

Whilst it can appear to be very daunting to manage with little money there are positive steps that can be taken to alleviate the situation and make managing easier.

SCRIMPING

The definition of scrimping is to save money by spending less than is necessary to reach an acceptable standard. If you scrimp and save, you manage to live on very little money in order to pay for something. Scrimping can apply to all our expenditure. To give you some ideas and get you started some here are some tips for saving on energy, food and household bills.

 Scrimping on Power and Water Use

(1)  Switch of the TV and appliances. Do not leave them on standby. There are master switch plugs for computers and the television. Contact your energy supplier for details. You may be eligible for free plugs.

(2) Take frozen bread, etc. out of the freezer the night before you intend to use it and put it into the fridge. While it defrosts your fridge will require less energy to remain cold.

(3) When you turn on the shower and it is getting warm, leave a bucket for the water to go into, and then use the water for the loo later. Same with the bath water, when finished with, bucket to chuck it. (Metered)

(4) Put on a jumper, and turn the thermostat down on central heating.

(5) Turn the oven off 15- 20 minutes before the end of cooking. The oven will remain hot enough to finish the cooking.

(6) ) If the airing cupboard is left open it would help to heat the upstairs if the hot water is on.

(7) Put a brick in the toilet to save on water when you flush.

(8) Leave the oven door open after cooking to make the most of the heat.

(9) If you have a gas or oil boiler check with the manufacturer that you are using it efficiently. For most boilers less gas or oil is used and the house is still kept warm if it is switched on for (say) 15-20mins and then switched off for the next 45 minutes then switched on again for the next 15-20mins and so on.

(10)If you do not have cavity wall insulation or loft insulation you may be eligible for free installation. Check with your energy supplier.

 Scrimping on Food

Plan your menus, and write out a shopping list. You will buy less food and waste less too. Only buy what is on your list and what you will consume. Did you know that households throw away on average 30% of the food they buy every year? If you do not throw food away you will reduce your food bills by 30% straight away. Here are some scrimping tips:-

(1) All the large supermarkets reduce items which are close to the “sale by” date. Get to know where the reduced shelves are. There are good reductions on meat, fish, fruit and vegetables. Visit those shelves for items on your list and the time they are reduced the most. You are likely to save between 20% and 50%.

(2) Freeze leftovers as homemade ready meals

(3) Drink water for every alternate drink. Not only is it cheaper, it is also better for you.

(4) Avoid ready meals as these will cost more. Cooked meals cost far less.

(5) Compare prices between stores

(6)Ensure you are signed up for loyalty/rewards cards and make sure you use them even for the smallest purchase. Over the year these rewards add up.

(7) Use a tea bag more than once

Scrimping on Household Items

You will be surprised how much that you can save. Here are a few useful tips:-

(1) Add water at the end of washing up liquid and shampoo bottles. You will find that you can use them two or three times more.

(2) When you can’t get any more out of a bottle of hand-cream, cut it open – you can get at least another couple of day’s worth from inside.

(3) Recycle string, envelopes and rubber bands from the postman.

(4) Keep the remains of bars of soap. Press the remains together and you will have another bar of soap.

(5) Keep tin foil containers and use them for baking.

(6) Cut up and hem old cotton shirts for hankies.

(7) Use old clothes for quilting/collage.

(8) Replace boot soles not boots

(9)  De-clutter. Most of us have unwanted items. Advertise in shop windows or sell on an auction site. You may be surprised how much you may get.

(10)                        For even more scrimping tips visit the following websites:-

http://meanqueen-lifeaftermoney.blogspot.co.uk/2012/03/super-scrimping-is-in-my-blood.html

http://www.channel4.com/programmes/superscrimpers/articles/scrimping-tips

 

BENEFITS

State help, in the form of benefits, are available when we fall on hard times. There are many types of benefits, not just for those not working but also for those in work. For those in or out of work there are heating and housing benefits; child benefits, benefits for families including child trust funds, childcare and the sure start maternity grants; disability benefits including disability living allowances, community care grants and employment and support allowances. For those not working there are jobseeker’s allowances and low income benefits. For those who have suffered a bereavement, whether working or not, there are death benefits including widowed parent’s allowance, bereavement payments and funeral payments. Some of these benefits are subject to income and capital levels.  There are also tax credits for those in work who are in receipt of low earnings and for those bringing up children. Ensure you obtain your full entitlements. They are yours of right. Below are some links to sites which will enable you to find out about your entitlement and how to claim.

For the UK these links are:-

www.entitledto.co.uk/

https://www.gov.uk/browse/benefits

www.dwp.gov.uk/international/benefits/

www.adviceguide.org.uk/england/benefits_e.htm

For the USA these links are:-

www.benefitscheckup.org/ health care

www.benefits.gov/ 

 Charities

There are charities helping the homeless, those seeking help to find a job and those distributing food often referred to as food banks. Some of these charities are local initiatives and others are established national organisations.

To find a charity to help you contact your local authority, your local church, GP, MP, or the Citizens Advice Bureau. Often you will find posters about charities in your local library.

Food bank charities have been on the rise and are often supported by businesses local to you including many of the leading super markets. Over 3,000,000 tons of food is wasted every year according to one national food charity “Fare Share” – (www.fareshare.org.uk/Food). Do not be proud or afraid to seek help. There are people and organisations dedicated to help those less fortunate and for those, through life changes, who find they are facing hard times.

 

THE MATTER OF THOSE WHO WANT YOUR MONEY

Whilst there are people and organisations wanting to help those in need there are equally those who will deliberately set out to exploit desperate and vulnerable people.

Recognising marketing hypes and scams

Always beware of any offer too good to be true which is dependent upon you having to part with some money. Subtle ways are used by the unscrupulous to part you from your money; the most common of which is by getting you to phone a “premium charge” number. No help will be given but when you receive your phone bill a charge of up to £1.50 per minute would have been made. Never give out personal details, particularly bank information. Those wishing to genuinely help will not ask for this information. Be wary of cold call canvassers offering loans – they are in business to make a profit. The loans are likely to be very expensive.

Shops seem to be offering 50% -70% off all year round. Heavily discounted items may not be a bargain. Retailers in the UK can offer large discounts so long as they have for a continuous period of 28 days prior displayed a higher price. Do not be fooled by some of these offers. One of the leading supermarkets has been known to offer frozen turkeys for sale in the month of August at double the normal price. At Christmas time they promoted their frozen turkeys with a 50% discount. The discounted price was very similar to the price asked by other supermarkets who were selling without a discount. “THREE FOR THE PRICE OF TWO” and “BOGOF” offers may not be the bargains you are led to believe.

Always check prices in other stores. You will be surprised with what you discover. If you are not working you will have time to compare prices and very soon you will be street wise and you will soon be able to spot a genuine bargains.

Learning to say No.

Those with some money may find they are being asked to help family members or friends. The requests can be many and sometimes frequent. Do not lose sight of the fact that if you keep giving that one day you may find yourself having to ask others for money. Many people do not like saying no especially to close friends or family. Whilst you keep giving you are not helping them to sort out their lives. You can become anxious about receiving further requests and be concerned that your money is dwindling. If you are stressed your health can be affected and you will not then be able to offer the moral and practical help you may have been giving. Remember you can be viewed as a soft touch. Make your family and friends aware of the other help that is available. Help them to take control of their lives. It will be better for them and for you. Do not give in to emotional blackmail. If they are not willing to listen to you try to get them to talk to someone else. You can arrange an appointment for them to speak to one of the charitable organisations referred to in this article.

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