Finance and financial products have become far more complex and confusing and as we have seen over the last year or so, even the banks themselves don’t fully understand what they are doing.

So, it is hardly surprising that the average man or woman in the street may not fully understand what financial products are available or which are most suitable for them. This makes us all potentially very easy customers to sell these things to.

When we are confused a financial salesperson will attempt to shine some light on the problem but if they are working for a particular finance company or bank they are likely to only show you their own company products. They may advise you on what is the best of the range they have on offer but there may be others on the market that would be a better deal for you.

Independent financial advisers are able to offer a whole range of financial products from many different companies so they might well suggest products that are a more suitable for you and your situation.

We often spend a lot of time sifting through different deals and offers for holidays, cars and TVs but we will often be happy to accept the first deal offered when it comes to financial products. This could be a mistake that costs us a lot of money and we should reduce that risk by getting advice from several different sources and making a considered judgement once we have a better grasp of the facts and what offers are available.

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

The news of a rise in bankruptcies is disappointing but hardly surprising given the current financial climate. It must be devastating for those involved but individuals and businesses are struggling for various reasons right now. In some cases that may be that we have two conflicting ideas about the value of money.

Most of us feel we work hard for our money and we don’t want to waste it. So, when we are spending real money using real notes and real coins we are reasonably careful with our cash. Somehow spending the same amount on a credit card is a very different experience and it is so much easier to be careless and carefree and not worry at all about the debt.

There is something about using a credit card that is almost unreal. We agree to a purchase, hand over the card and the deal is done. No stress, no worries and no doubts. No money changed hands and it almost feels like we are getting the goods or service for free.

This seems to be a similar sensation to the one experienced with money that comes more easily. Gambling is a good example whereby a person might play roulette and lose nearly all of their money and then their luck seems to change and they have a small winning streak. They may even be showing a small profit. Do they stop and walk away thinking they were fortunate to survive with their money intact? Do they heck. Apparently very few are able to do that and most will now start gambling in a reckless manner because they have just won all this ‘free’ money so it doesn’t have the same value as if they have had to work for it.

We all share this weakness when we get a windfall of extra cash. In most cases if we get a bonus, a lottery win or an inheritance we see the value of money differently than we would with our normal income and we might enjoy spending it. We may treat ourselves to a holiday, a new car or on home improvements.

What we should probably do might be to clear some debts or invest it for the future in some way but invariably we treat it as free money and feel we should enjoy it. There is certainly nothing wrong with enjoying life but it might well be that you would enjoy it a lot longer if you had less debt or the reassurance of savings to protect you in old age.

This is not entirely dissimilar to the position a lot of people found themselves in when they were encouraged to take out credit cards. They suddenly found themselves with easy access to credit and were able to buy things they previously considered unaffordable. There was no pain and it felt like they were using free money. At, least, it did until the bills started to become unmanageable.

They say there is no such thing as a free lunch and that is generally true. If there is one thing we can all gain from our experiences with the credit crunch it must surely be that there is a price to pay for borrowing money. If you take on too much debt, or if your circumstances change, the price of that money can be very high indeed.

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