Money Matters

 Read more Oily Rag articles by Frank and Muriel Newman 

Interest rates and unemployment are on the rise so it is no surprise to us that more than ever people are turning to a living off the smell of an oily rag lifestyle. If there is any silver lining to hard economic times, it is to remind us about the virtues of thrift and hard work.

Some people say that money is not important, but then some people say all sorts of silly things. Money is very important, especially if you don’t have much!

And the way to having more money is to make it, save, and store it away in a safe place (like a bank, not under the bed or in a Hanover type finance company!). This is where living off the smell of an oily rag comes in.

Here are a few down-to-earth oily rag money tips.

• Look out for ways to make a few extra dollars, even if it means taking on additional work or a paid hobby and watching less TV while you work a few hours at night.

• Repay debt as quickly as possible.  Debt is a thief that steels from you in the future.

• Don’t buy consumer goods (like cars, electronic goods, furniture, holidays) on credit. In a few years time what you have bought will be worthless so you would have not only lost the money but also lost what you could have bought with the interest cost. If you can’t pay cash, you can’t afford it!

• A reader offers some advice when making big-ticket spending decisions: “One method is to question yourself as husband and wife several times before buying anything. Do we both agree that we really need this? Can we borrow it? Hire it? Get it on special? Is there an alternative? Give it the ten-day waiting test – if the need remains go ahead, get it and enjoy it. We’ve been needing more furniture but it’s amazing what has turned up from family members in the meantime.”

• If you are finding it impossible to keep your head above an ever-rising tide of debt there are really only two things you can do: sell assets to repay the debt, or spend less. Selling assets or downsizing the home will be a hard decision to make, but it’s what you may need to do if you are caught in a debt vice. Those in a less desperate situation will simply need to be more creative about how they save money (without making life miserable). If all else fails and your spending falls into the “addiction” instead of “bad habit” category, then seek professional help and spend some time on a budget adviser’s couch until your financial situation is once again in balance and under your control.

• Don’t guarantee other peoples debts. Being a guarantor means the lender has every right to claim repayment of the debt from you as though you were the borrower, which may be really unfair, but that’s what you are signing up to if you act as a guarantor.

• Beware of buy now pay later deals. You may be better off negotiating a cash discount and forgetting about all of the paperwork and extra charges involved in buy now pay later schemes.

If you have some favourite money-saving or money-making tips, share them with others by visiting the oily rag website (www.oilyrag.co.nz) or write to Living off the Smell of an Oily Rag, PO Box 984, Whangarei.

* Frank and Muriel Newman are the authors of Living Off the Smell of an Oily Rag in NZ. Readers can submit their oily rag tips on-line at www.oilyrag.co.nz. The book is available from bookstores and online at www.oilyrag.co.nz.