Tuesday, May 27, 2014

Looking after your money

Every photographer (and everybody else too for that matter) needs to look after their money in order to survive the rat race in comfort. It's not hard - just common sense rules that have to be observed.
Because another person has something does not mean it's essential to possess it also. It is never known how much the other person incurred getting it so while claims can be made that it was bought with spare cash, such claims can be vacuous and a loan might well have been used in order to pay for it. Owning such a trinket might be seen as a way of appearing affluent in the viewer's eyes. (yes there really are people that stupid).

  • Debt means paying back the capital borrowed plus interest plus finance charges. Far better to save money, gain the interest on savings and then buy the object of desire.
  • Cable TV is unnecessary. Digital TV through an aerial has just as many channels of garbage as cable. It is an easy guarantee that there will be plenty times the average viewer won't find anything to watch on cable or digital even though cable is paid for.
  • Smartphones are a luxury. For the price of the satnav on a smartphone, a car satnav and a flip phone could be used for far less money. Even on a low-cost Walmart plan of $46 a month, a Tracfone would be $10 a month and a satnav would be a one time cost of about $150. That's an annual saving of $282 in the first year after buying the satnav and $432 in subsequent years.
  • air-conditioning is a luxury also. There's nothing wrong with using ordinary fans and removing excess clothing. As an example, the electricity bill here is rarely above $29 a month in the summer.
  • Don't replace anything until it's actually broken. Many fools replace things just because they changed their mind about the style then wonder why they're always broke.
  • If applying for a job and the requirement is that the applicant must pay an application fee or agree to pay for equipment out of their first paychecks or must pay to provide criminal background checks etc, pass on that "wonderful" opportunity. None of those are any of the applicant's responsibility. This kind of requirement just screams how cheap the company is. With a company that cheap, it's probably going to be hard to get wages paid.
  • Always pay taxes on time and in full.
  • Don't fall for the sucker tactics of "but it's tax deductible". Not everything is actually tax deductible and many business items are only 20% deductible.
  • Setting up a fake business to avoid taxes. Many people do this. It is 100% unethical and 100% immoral. Don't do this.
  • Going into arrears with taxes means interest payments. This is foolish.
  • Balance the budget. If there's more going out than coming in then reduce outgoings until outgoings are less than income. If it's not possible to survive on income then start sharing accommodation. 
  • New camera because there are more megapixels, it does something slightly different etc. Just don't - it's not sufficiently different from an existing camera to make it worth the expense.
The whole aim of earning money is not to pay for accommodation, taxes, food, expenses and blow the rest on toys. The whole aim is in order to set aside sufficient money to enable a comfortable retirement. Money blown now jeopardises that comfortable retirement when working will not be an option. Similarly, it is also set aside for hard times - it can take six months and more to find a new job after the loss of a job.

Unexpected expenses can crop up at any time. Too many people reap the consequences of not preparing for the unexpected and lose everything. The time to prepare is now, not when a disaster happens.

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