Personal Finances 101 Textbook: None. Course will be based on online essays and materials. Instructor: Mba Mbulu

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Class #2

Steps Toward Personal Financial Triumph

(1) In addition to your budget, maintain a separate spending record. This record will include a note of every penny you spend, what you spent it for and on what date. Establish this spending record in your pad and maintain it for at least three months. Once you realize how valuable it is, you will probably keep it going every day of each year, year after year after year.

What does this spending record do? Number one, it gives you a day to day means of evaluating how effectively you are adhering to your budget. This, of course, means that you should compare it to your budget on a regular basis. But, most importantly, a spending record makes it possible for you to determine the small spending habits you have developed that you have not consciously paid attention to. The "nickels and dimes" you casually dispense could be a source of waste or a key to impulse spending. If either exists, you need to know how it impacts on your financial condition and whether such spending can be eliminated or not.

(2) Develop the ability to resist unplanned buying. Drill the concept of zero unplanned buying into your head. If you did not plan to buy it when you left home, you should not buy it, period. Put that into your mind and work hard to keep it there. After a while, it will become part of your spending approach and function on its own.

(3) Be smart. Recognize that businesses are not in operation to help you save money, and do everything you can to keep them from getting yours when they do not deserve it. Promotions that do anything but give you the savings up front are sophisticated con games. You should not have an interest in earning an unreal dollar or accumulating spending points, for example. Every legitimate savings is an up front savings; that is, you actually pay less for the item you want. Anything else will encourage you to spend more than you would under normal circumstances (thereby being of benefit to the business, not you), and spending more is what you want to avoid doing.

(4) Learn to recognize when you are not getting sufficient value for your money. You are entitled to receive a penny's worth of value for every penny you spend. When you don't get the value you deserve, complain until the imbalance is corrected. This is one area where being a pest will reward you in the long run. If you "bug" your creditors about nickels and dimes early, they will be less likely to take you for granted later.

(5) Review the notes from the January class, combine them with this class, put some practices into motion and come back for some more next month.

NOTE: Read the following and learn what you can from it.

CAPITAL ONE

Recently, I received an invitation form Capital One of Richmond to apply for a no annual fee, 9.9% APR (Annual Percentage Rate) credit card. After about 5 or 6 weeks, the card arrived in the mail. As I always do, I immediately called the Customer Service Office, read out my credit card number and asked the representative to read me the terms of the agreement. He informed me that the card's APR was 19.9%, not 9.9%, and that the card I had received was not the card I had applied for. I canceled the card on the spot.

I could say Capital One made an honest mistake, but THEY DID NOT! They deliberately tried to sucker me (and who knows how many other individuals) into using that card because, once a dispute arose, the law would favor their business against any individual. When I applied for the card, I specifically and categorically stated that the 9.9% APR card was the only one I was to be considered for. And, curiously, when they sent me the unapplied for card, the usual "terms of agreement" that accompany the initial card was not included. If I had used the card based on the assumption that it was the one I had applied for, the law would have forced me to pay the bill. Why? Because the law functions in favor of big businesses against individual citizens. Whether the law intends to favor businesses or not doesn't mean a thing! In actuality, businesses are favored whether they are right or not.

Two weeks after canceling the card, Capital One sent me a bill for $29.00, the annual card fee. I called them and tore the bill up. Why do I mention this? To tell you the following: NEVER PAY AN ANNUAL FEE FOR A CREDIT CARD! The banks make enough profit from APRs and purchase fees: annual fees just prove how greedy they are and how much they will rip you off if you allow them to.

TAKE NOTE: (1) Never use a credit card until after you call the customer service office and get the terms of the card clarified and (2) Never pay an annual fee for a credit card.

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