This Blog is dedicated to consumers looking for smart and easy ways to save money in their day-to-day life. I’m passionate about saving and teaching others how easy it can be. Saving money today will help you achieve your long-term financial goals and keep you out of debt in the future.
Bring up the topic of cable, internet or phone companies
and you’ll inevitably have hours of conversations that range from, how
someone got the best deal to how a customer feels totally ripped off by
the high fees.
In my case I went from feeling totally valued by my communication provider, to completely duped in a matter of four months.
I dissect some of her favourite money quotes into tried-and-true financial lessons we all can use.
"A penny saved is a penny earned." —Benjamin Franklin, founding father of United States
Translation: Saving small amounts throughout your life is the best way to build wealth. When you're buying anything, consider the cost and see if you can get it for a better price somewhere else. Remember: Every penny you save should go directly back into your bank account.
"What's the quickest way to become a millionaire? Borrow fivers off everyone you meet." —Sir Richard Branson, founder and chairman of Virgin Group
Translation: Too many of us are living off borrowed wealth. We fund rich lifestyles through credit cards, huge mortgages and car leases. Focus on building real wealth in your life. Live below your means. No more than 30% of your after-tax income should be spent on your mortgage and taxes, and no more than 25% on the rest of your living expenses. Also, 10% of your income should always go towards savings and investments. If you aren't meeting these basic percentages, you need to cut back on something.
"Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1." —Warren Buffett, the most famous billionaire of our time
Translation: Don't spend more than you have. Always respect your money and be conscious of how you're spending it. Don't take unnecessary investment risks; avoid losing money.
"If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring." —George Soros, another billionaire and Forbes rich-list regular
Translation: Take a slow and steady approach to investing. Making money is hard work and quick profits are not a reality. If we all had dull investing habits, we would be much wealthier and more financially secure. If it's quick thrills you're after, head to the casino; if you want to build wealth, save early, consistently and intelligently.
"Greed is good." —Michael Douglas as "Gordon Gekko" in Wall Street (1987)
Translation: We need to be greedy (to an extent) in order to get ahead financially. Gekko was referring more to the hunger and the will behind financial gain—to do and be your best. We always have to serve and guard ourselves first before we can help others.
Nothing bugs me more than paying extra for something that should be free. After I've taken the time to research what I'm buying, budgeting what I can afford - I don't like to be surprised with extra costs that I did not anticipate and should have been disclosed up front. Here are three of the biggest rip-offs out there in my opinion.
Paying to pre-select your airline seat:Many airlines charge customers to get their choice of seating. For example, two Canadian carriers charge up to $20 or up to $30 for a one-way flight lasting more than two and a half hours. By arriving at the airport 30 minutes before the recommended time, you duck the unnecessary charge. Airlines prey on people’s insecurities that they will be unable to sit together or have to sit near the washroom during a long-haul flight.
Annual furnace maintenance plans: Most heating, ventilation and air conditioning (HVAC) companies offer customers a version of the plan, which costs around $120. It gives customers a once-a-year maintenance and inspection. But 90 per cent of what the “experts” do, you can yourself. Some examples: replacing the air filter every three months, cleaning the blower compartment every year, checking that your outdoor vent is clear of obstructions and is not clogged with garden material or animal nests. A furnace bought today should not require professional maintenance for at least 10 years.
Getting a manicure at the salon: Often, your hairdresser will try to up-sell you a manicure while you’re getting your hair cut. These manicures are usually $30, which is twice the price of getting the same service at a nail bar that usually charges $15. Your hairdresser might tell you the manicure service is more sterile or they practise better hygiene than the nail bar – it’s a scare tactic. At a nail bar they have one job and they do it well.
While the experts would have you believe that identity theft is a growing problem, the chance of losing money to this type of consumer fraud is actually fairly small. But while the dollar amount of losses and number of people it affects may not be big, if it does happen to you it can be a mess to untangle.
Identity theft is a broad term that includes things ranging from a credit or debit card being compromised to a more severe problem like real estate title fraud, when a thief mortgages your property and disappears with the money. The Canadian Anti-Fraud Centre says about 18,500 Canadians were victims of identity theft in 2010, the latest year complete figures are available for. They lost a collective $9.4 million, or about $510 a person. In many cases banks and other lenders absorbed the losses when their customers were victimized.
Read more Identity Theft: Should You Worry?