About two and a half years ago, I did a post about the basic differences between banks and credit unions. THIS POST, one of my earlier ones, is also a frequent search string for people who find this blog. At the time, my post was strictly about young people who are working in some of their earlier jobs. But the question has taken on a much larger importance since the beginning of the Depression.
Originally, my post sparked a series of emails from people who thought that my advice was simplistic and left out many “genuine” methods of creating wealth through passive income streams and the like.
Just a few points of clarification for those who don’t remember the original post:
- I never gave any advice as to which institution anybody should use. Everybody’s circumstances are different from everybody else. Credit unions are great things that are the right product for many people. Banks are great things that have advantages for other people.
- I’m talking about saving money, not “INVESTING” like many of my critics have suggested.
- While I’m curious as to how many readers have banks exclusively or credit unions exclusively, my advice is the same: Find an institution that can grow with you as your financial needs grow, one that you feel comfortable dealing with, and one you can access as needed.
Given all that has happened since I originally posted, I feel really bad for those critics who believed that they had the perfect system to get a high yield without acknowledging the risks they were taking.
This post is a little different: I’ve said before that money is only useful when it is being used (spent for things that you believe are worth it). Not only that, but one cannot help but to spend money, no matter how much they may try to avoid it. By the way, stop trying to avoid it. Spend money when you have the money and you feel that you need whatever “thing” more than you need the paper (money).
With less money floating around, waiting to be spent, many people, myself included, have decided to review their priorities as to when and where they should spend money. People rightfully aren’t willing to throw money away like they used to.
I can’t begin to pretend to tell you how to spend your money. I’m not even going to try. I have come up with a few suggestions, and I’d like your help to think of some more. Feel free to comment as to any other thoughts on where you should put your money when you want to use it.
- Know who you are and what is important to you before you spend money.
- For example, don’t spend your money in a place that you are morally against. If you are against tobacco, and many people are, you probably don’t want to spend money in places that allow, advocate, or facilitate the usage of tobacco. Same with alcohol. Alternately, if you are a big fan of animal decency, find places that don’t promote animal testing in their products.
- Look for the best deal, but don’t sacrifice on quality.
- I’m going to use the example of toilet paper. I have a brand that I prefer. It isn’t the cheapest, but it is comfortable. One time, the store was out of our brand. We bought a cheaper brand, and hated it. Without getting into too much detail, I almost found it easier not to go to the bathroom than to have to use that brand.
- Conversely, don’t get stuck on brand names unless the quality is markedly better.
- My dad has a favorite brand of shoe. He swears that this brand is the most comfortable brand made. These shoes are expensive. My parents bought me a pair when I became a teacher. I’ve worn the shoes, and while they are undeniably well-made, I personally don’t find them to be very comfortable. I also have a favorite brand. I haven’t bought my favorite brand in a few years. I find that other brands are almost as comfortable at a better price.
- Don’t spend money to prove a point.
- If you need something, buy it if you can. If you want something, and you can afford it, there is no harm in buying then either. I’ve seen people who spend money to prove that they can. I’ve fallen into this trap myself, and the good feeling I got from spending the money didn’t always last as long as it took to make up that money again.
- This one is common sense but, don’t spend money you don’t have.
- Credit is a good tool. If used wisely, it can get you through temporary emergencies, help you to own property (like a house), or start a business. If used incorrectly, it can affect you for years, like THIS guy. Like any other tool, its effectiveness depends entirely on the person wielding it.
So, where do you put your money when you want to use it? Let me know.