It’s been raining here for most of two days now and in a world where, we are told, there is a shortage of water around the world nearly all of this water is going down the drain and eventually out to sea. It’s all wasted and it started me thinking about money and how so much of the money we get can be wasted. If you imagine your income as rain and the money you waste as going down the drain. How much of your money ends up down the drain?

It’s all a question of priorities and values. What is really important to you and what do you value in life? Your money should be working towards giving you and your family what you need and want in life but for so many people it just gets spent and pours ‘down the drain’.

We are all inundated with advertising telling us that the latest thing is a ‘must have’. The handbag with the designer logo is a ‘must have’ even your Jeans should have a ‘must have’ label. It’s ridiculous and we all know it is but there’s something in our subconscious that this appeals too and some of us become convinced that the ‘must have’ really is important.

If you look at designer brands such as for handbags what do you see? It may be made to a slightly better standard than the unknown brand though that isn’t always the case. It may be more stylish than an unknown brand but again, that isn’t always the case and when it comes to value for money? There is no value for money. Designer brands cost an arm and a leg. Far more than the cost of materials labour and manufacture. You are buying the designer label and the product almost comes free. Do they do anything that the unbranded products do? No. Do they do a better job than the unbranded products? No. What do they do then? They appeal to your image conscious desires which have been inflated by tv and magazine advertising.

We all want to be better people. We want to feel proud of ourselves and our family. We want other people to think highly of us. It’s human nature. Whatever field you work in and whatever hobbies you may have you would like other people to be impressed with your abilities wouldn’t you? The advertisers are relying on the fact that most people are not happy being themselves. They want to be somebody else. A film star, a sports personality or somebody else that people think are special in some way. Do you think it is their designer handbag or tee shirt that makes them special or the car that they drive or the jeans they wear? Of course it isn’t.

These stars and personalities impress us because they are good at something so how about you impress people with your abilities for being clever with your money? Impress people with your skill and intelligence in avoiding buying things because some advertiser is saying you should buy it. See through the hype and look at what you really need and do the right thing for yourself and your family.

What could that extra money spent on designer brands do for you and for your family? If you were to invest the money saved each time you resisted temptation then over the years that money would grow to be a worthwhile addition to your pension or help your kids get through college.

What do you lose by not having designer brands? Very little. It’s all a state of mind. If you allow yourself to be brainwashed into thinking that buying products that advertisers tell you are the best then you have lost your independence. Freedom of choice is supposed to mean YOU choose what you want. Who are these advertisers to tell you what you should own? Who cares what a film star is wearing or using. Do you really consider they are good examples for you and your family?

Being proud of who you are and what you are is a far better way to be than to spend your life rather wishing you were somebody else. You can be very proud of yourself for being sensible with your money and you will be financially better off than you ever would if you spent lots of money on branded products that are charging you an arm and a leg for the label.

Money down the drain is wasted money. It doesn’t help give you or your family find a better life and it will never make you rich. It does the opposite. If you spend you life trying to live like a film star then you will probably always be poor. Designer brands hit you in your pocket and they hit you very hard. Do they really make you feel a better person or do they demonstrate how gullible you are? If you feel they are the most important thing in life then that’s fine but don’t go crying about it when you look back a few years and see how much money you have been pouring down the drain.

A wise man will store some of the water when it’s the rainy season for the times when there’s a shortage. You should do the same with your money. If you have extra sometimes don’t go blowing it all on careless purchases. Store some for the days, weeks or even months when there might be a shortage.

It’s your money so you choose how you use it. Just don’t let it all pour down the drain.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

The Banks seem to have been encouraged by the recent court result in Birmingham in which a district court found in their favour over a bank charges refund claim. The BBC is reporting several cases of customers receiving letters or phone calls from banks who are suggesting that their claims are likely to fail following this result.

It would seem that this new tactic is intended to try and scare people off from claiming refunds for their penalty bank charges even though the case cannot, apparently, be used as a precedent in other courts. The case referred to was found in the Bank’s favour after the judge considered their terms and conditions. It would seem that he ruled on the basis that they had followed their own terms and conditions rather than ruling on the case as to whether they were legally allowed to make these charges.

The Banks with their heavy handed approach are once again are clearly demonstrating that customers are not what they care about and customer service is considered a joke to them. No company that wants to maintain good relations with it’s customers is going to penalise them and charge them ridiculous fees is it? Rather than explaining and listing the work they have carried out in dealing with a defaulting account the banks simply deduct money from the defaulting customer’s account with no regard to the effect that might have on the customer.

Perhaps they are concerned that if people saw an invoice something like the following, it would make them look like rip-off merchants?..  ‘Computer printout of standard letter, including postage using one piece of paper, one envelope, less than a penny’s worth of electricity & ink and one postage stamp…. £35  Not forgetting that they then proceed to bounce any further transactions and charge you again for a similar letter plus excess overdraft fees and any other charges they can think up.

This complete lack of customer care and the way that all the banks appear to act together and speak with one voice and behave in similar ways proves that competition isn’t working. There is no competition when all of the banks behave in such similar ways. If, as it appears, competition isn’t working then the government must step in and take action. Government has a responsibility not just because they are supposed to represent, protect and defend the public from those who would unfairly abuse them but also because more and more, the government is encouraging people to have bank accounts to receive payments of pensions, benefits and grants.

It is becoming essential in the modern world to have a bank account so banking has moved to a level beyond just a private service for those who want it. We now have a situation where banking has become an essential public service so it must be properly supervised to prevent abuses.

There is currently an OFT investigation into banking but that is for the longer term. It is not expected to report until the end of the year

In the meantime banks continue to make a mockery of the legal system by claiming they will defend cases in court but they don’t turn up and they have been paying out the claims in full. The case referred to at the beginning of this piece was a case like this except it would appear the bank forgot about it. They had no representative in court when the case was heard. They either had forgotten about it or they just couldn’t be bothered to turn up. Either way it demonstrates a lack of regard and respect for the legal system.

The banks give every reasonable person the impression that they consider themselves above the law.

The law states that default fees should only reflect the cost of administering the default. In an age of computer generated letters and account management it is hard to see how the costs can be higher than a couple of pounds at most. The banks, as yet, have made no attempt to demonstrate they are justified in making the charges they currently apply.

They are being less than honest in claiming they will defend cases when experience has shown they do not do so. A court in Leeds recently had 77 claims listed for trial on one particular day but as the day wore on all claims were settled in favour of the claimants with not one actually reaching the court. Thousands of people have successfully reclaimed their bank charges often with additional interest charges but not once have the banks appeared in court to challenge the claim. Yet they continue to argue that these charges are fair and reasonable.

The OFT decided last year that it was prepared to challenge credit card fees in excess of £12 and the whole credit card industry dropped their charges to £12 or less. Up until that change they had maintained that their charges were legal and fair. Just as the banks now claim in regard to bank charges. So why weren’t the credit card companies prepared to justify those higher charges in court?

It is time something was done. I fear we shall have to await the outcome of the OFT review but this has been going on for far too long already. Far too many people have been punished with charges mounted upon charges for quite small mistakes in their account management. Few people would argue that any charge is unfair but very very few would even try to argue that these charges applied by the banks are fair.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

I have a question for you… Why do you work?

You may think it a stupid question because the answer is obvious but go with me on this and just ask yourself that simple question.. Why do I work? I am sure the answer for the vast majority of readers will be that it’s to pay the bills, to put food on the table and to keep a roof over your heads.

So now I’ll ask a slightly different question. Why are you doing the job you do? The answers will vary a bit more this time but will mostly be along the lines of, ‘Because the pay is better than doing other jobs’

So we have established that for most people they work to feed their families and they do the job they do for the money.

Now, if you had all the choice in the world, would you do the same job? Not many would say yes to that. We work because we don’t have a choice. We work because we need the money and working is the only (legal) way to get the money.

If you are working just for the money then you should examine what you spend that money on because this is what you are getting because you work. If you are working to pay the bills then what bills are they? If you are working to pay your credit card bill for 200 pairs of shoes or the 5 MP3 players you have bought and upgraded in the last year then you are really working for shoes or MP3 players.

Will you be buying more shoes or more MP3 players?

If you are at work and wishing you were at home then maybe you should stop and think about the fact that your work enables you to buy shoes but also that the shoes are a big part of the reason you have to be at work. Are new shoes that important? You may think so and that’s OK but if you don’t think they are worth the daily grind then perhaps you should reconsider your lifestyle and your purchases.

I’m not saying you should spend the rest of your life walking barefoot and wearing an old blanket but you would be sensible to consider where your earnings go. Sit down and decide what really matters to you and your family. Being in debt restricts your options. If you could live with fewer new pairs of shoes then your options for other things suddenly open up.

“Being rich is having money; being wealthy is having time.” – Margaret Bonnano

You could work fewer hours and spend more time with your family. You could have more vacations. You might even be able to give up on your job and develop that little business idea you have dreamed of doing, for years. It might even be that you want to spend your days running a blog like this. Whatever your hopes and dreams they will be a little nearer if your spending is appropriate for your income.

Your neighbours might be impressed with your new car the first day it arrives but if paying for it is going to leave you struggling to make ends meet and possibly getting the car repossessed is it worth it? Manage your life to match your money. You’ll be happier, probably healthier with so much less stress and you’ll certainly be wealthier.

“The real measure of your wealth is how much you’d be worth if you lost all your money.” – Author Unknown

Money and financing are tools and like all tools they can be used properly and sensibly or they can be used badly and foolishly. It isn’t the knife that kills someone, it’s the person holding the knife. Used sensibly money and credit can help you enjoy a good life. Used unwisely they can drag you down until you are drowning in debt. Balance your budget and appreciate what you have now.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)