Rainy Day Savings Fund For Unemployment In Bad Economic Times
People who spend most of their payday money within a few days risk uncertainty and having to borrow money from friends and family if they suddenly need to pay medical fees, need urgent repairs to their car or lose their job and a few weeks later don’t have enough money for the next rent or mortgage payment.
One of the topics I’m keenly interested in is financial literacy and how people behave when dealing with money. Recent research by the Australian Federal Government into changing behaviour (PDF) revealed that:
“Most people heavily discount future costs or benefits compared to immediate costs or benefits. The further into the future the costs and benefits are likely to occur the more they are discounted. This is a key tendency in helping to explain the difficulties people experience in making lifestyle changes where benefits are longer-term”.
photo credit: Images_of_Money“Temporal discounting is our tendency to want things now rather than later. In order to encourage us to save money, banks have to offer us a reward in the form of an interest rate. In order to delay gratification, we have to be convinced that the reward in the future is going to be sufficiently large to compensate us for going without right now.” – I Want it Now!Temporal Discounting in the Primate Brain
Setting Up an Emergency “Rainy Day” FundA good place to start would be to setup an emergency fund of at least $1000.
Call it a slush fund, self insurance or a rainy day fund, having one can mean the difference between the comfort of knowing you can pay an unexpected cost or the constant nagging fear that you’re one bill shock away from disaster.
photo “Rainy Day makes me Blue” credit: Neerav Bhatt
Mortgage Offset Account For Emergencies?The chair of the Federal Government’s Financial Literacy Board Paul Clitheroe is a frequent guest on the ABC Local Radio Nightlife program and he often discusses how a home loan mortgage is a great form of forced savings, which compels people otherwise reluctant to save money, to do so by having to make regular mortgage repayments.
payday lending bad habit - News
One of the main reasons why many Brits resort to punishingly expensive payday loans is to ensure they don't 'miss out on a bargain', I learned today. Yes, according to payday loan firm Ferratum more and
Illinois People's Action and Occupy BloNo hold a candlelight vigil outside Bloomington City Hall on Monday night in support of payday lending restrictions. (Photo by Ryan Denham/WJBC) The Bloomington and Normal city councils may or may not be able to
It is not in the national interest to force the impoverished to become wage slaves to pay off insurmountable debts owned to payday lenders and hugely profitable bankers. Every other rich nation on earth heavily subsidizes higher education.
by Neerav Bhatt on October 18, 2011 · 1 comment in Topic: Finance & Money People who spend most of their payday money within a few days risk uncertainty and having to borrow money from friends and family if they suddenly need to pay medical fees,
This is the same argument used by exploitative payday lenders — loan sharks in ghettos — to justify predatory lending habits targeted at impoverished and vulnerable communities. Only it's coming from one of the most respectable members of Washington
Emergency cash - VPSLink Wiki
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