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Maintaining Motivation

Maintaining motivation can be difficult when sticking to a tight budget. You may feel the need to waiver and splurge. That small lapse in concentration can result in the loss of months and years of hard work. Temptation always finds a way to creep in whether we are trying to stick to a diet or simply a daily routine an exterior influence always tries to make us falter. The majority of the battle of financial stability is mental and therefore we have to determine ways we can mentally stop our appetite to spend. 

We have to be as specific as possible. Set out your goals and keep them visible to you at all times. You should wake up and see what you are working towards each and every day. 

If you are saving towards a big trip maybe it’s a vision board that you make with all the adventures you will do on your trip. Draw a picture of the brand new car you want and put the picture up in your room. You want to be obsessed with your financial goal. This obsession will drive you towards saving every spare dollar towards your goal and when you finally get there the satisfaction will be greater than you could have ever imagined because you EARNED IT. 

Surround yourself with people that support your goals. If you are trying to stick to a strict diet it doesn’t help when mom’s making her world-famous chocolate chip cookies. The same thing applies to money, let the people around you know that you are saving for a big goal. Stay away from the people that know your goal but still tempt you to go out every weekend or spend money that draws you further and further away from your goal. You should have a timeline for when you want to achieve your goal and do whatever you can to stick to that timeline. 

Celebrate your wins. Once you get to your goal do not hold back. Spend your entire budget (not any more than your budget) that you’ve worked so hard to accumulate. You have set a plan and stuck to it, there may have been a few falters and bumps along the journey but you have made it and deserve to treat yourself extravagantly. You deserve it!

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Giving

Giving is the single best thing you can do with your money. Once you have achieved your goal of financial stability or you are comfortable in your current position you should reach out to those in need. For many of us if we were given $100 it wouldn’t change our life. Maybe we would go out for dinner, buy a new shirt or put it towards debt but at the end of the day, it doesn’t change your quality of living. 

For many other people, $100 dramatically changes their quality of living. This can be the difference between a child having a birthday or not, getting the proper food, education, or health care. You cannot put a value on the effect of a child receiving a book or being able to go to school with the right tools. The value stretches much further than the investment to get those materials but so many families are unable to afford them. 

Giving doesn’t have to be monetary either. Maybe you have some old clothes lying around or books you haven’t read in years. People are always in need of something and I can guarantee you can help out in some way. Giving back helps people provide a purpose that can be lost when getting caught up in our day-to-day lives. We can begin to complain about our very small issues and lose the sense of the global picture and the problems that are much bigger than us. We can get back in touch with similar things within our lives by attempting to understand the struggles that other people are growing through and attempting to help them.

One project I have had to pleasure of being a part of is the JTM Foundation. The mission of the foundation is to provide support for and conduct charitable work in Guyana, South America that aids educational advancement and relief of poverty. I have always seen the importance in helping those in need and having the opportunity to provide not only educational help but also building a safe space for those in need to be comfortable. If you would like to be a part of the process of helping those in need you can check out the website https://jtmbusinesssolutions.ca/jtmfoundation/

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Increasing Your Capital

In society, we are given suggestions about how we can save and budget for our future. The popular consensus is that we should cut back on our current expenditure and relocate our money from one area to another. The issue is we can only cut back so much before our quality of life begins to deteriorate. The purpose of utilizing our money is to make life better today and in the future therefore at some point, we have to make more money. We have to increase the amount that’s coming in while still managing it according to our goals. In this way, we can achieve our goals faster and begin living the life we desire. 

We can increase the value of each hour we are working by increasing our capital. We will discuss a few different types of capital we can increase. 

  • Human capital 
  • Social capital 
  • Economic capital

Human Capital

Human capital is the accumulation of knowledge, experience, and skills that individuals possess. By increasing your human capital you become more attractive to employers and can better justify your worth in your job. It is important to continue to grow because even if you’re giving 100% in your field just as quickly as you entered you can be replaced by someone more qualified and knowledgeable.

“You can be the best player on the team and a couple bad performances can have you sitting on the bench” – Brandon Miranjie

The greater your human capital the more options that become available to you and you are less reliant on your current job. You can increase your human capital by receiving higher education or gaining more experience. The traditional route of receiving a four-year degree is only one way of achieving this. The four-year degree is becoming less of a guarantee for a job and it is more necessary than ever to differentiate ourselves. Taking online courses or gaining experience through internships can dramatically increase your human capital. Even courses not in your field can make you more well-rounded and attractive to future employers. Internships are a great way to explore the field you would like to go in. It is much better to figure out you hate accounting after a 4-month summer internship than after you get a four-year degree. 

The opposite is also true. If you become very knowledgeable in one specific area you are justified in charging a premium for your services and make more money. This is exactly why a neurosurgeon makes more than a nurse. The neurosurgeon has accumulated enough human capital in order to make their time more valuable than a nurse. The neurosurgeon’s pay is then justified for the time they have put in through the development of knowledge, experience, and skills. 

Social Capital 

Social capital is the relationship between people who live and work together in order to make sure a society functions effectively. Increasing your social capital can also be known as “networking”. You are developing professional relationships within your field and exchanging information. These relationships can better help you meet your aspirations and be a safety net if you were to lose your job. Your network can support you as long as your relationships are more than exchanging business cards and they are deep and meaningful. 

You can increase your social capital by keeping in touch with people in your field, alumni, etc. Now more than ever people are available on social media on various platforms. Dedicate a certain amount of time in the week to reach out to someone you know and connect with them. It is very difficult to see the value in connecting with someone in the present-day but it can be a massive benefit in the future if you ever look to change professions or lose a job. 

Economic Capital 

Economic Capital is the ownership of land, stock, cash, etc. The more economic capital you have the more opportunity you have to improve your health, skills and overall improve your quality of life. While the benefits of increasing your economical capital are very good actually doing so can be a struggle. The easiest way to increase your economic capital is to get another source of income. This could be a second job or maybe a side hustle/passion you would like to pursue. This can be difficult as we are constantly faced with scarcity in our lives and it always seems like we never have enough time to do the things we want to do. We can also increase our income in our current positions, the cost of hiring an employee and going through the training and onboarding process is very expensive. If you simply ask your supervisor/boss for a plan in order to get a raise or simply asking for a raise while presenting what you have done for the company it is very likely they will offer you an increase in salary. While this should be done with caution. Done appropriately it can yield massive benefits. 

We can see how important your capital is to improve your quality of life and your economic position. Take the steps to set yourself down the right path and plan for your future. 

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The Pros and Cons of Credit Cards

Credit cards can either be a good decision or the WORST decision you have ever made in your life. If you were to search “Things to do when you turn 18” credit cards rank highly amongst the top 10 but the dangers and benefits of a credit card are severely overlooked. They can have you wishing you never got a credit card in the first place. 

Most people are expecting to go into debt in order to fund a large purchase such as a car or home at some point in their life. For this reason, a credit card can be beneficial in order to build your credit score. 

On the other hand, if you are already bad with controlling your spending you should stay clear of credit cards as they will drag you into years and years of debt. 

  • What are credit cards?
  • Should I get one?
  • Why you shouldn’t get one

What are credit cards?

A credit card is a card issued from a bank that allows you to make purchases on credit. Credit cards differ from debit cards because you are using borrowed money (money that is not yours) that you are required to repay. 

CREDIT CARDS ARE NOT MONEY.

There are a number of different cards that you are able to apply for but the main ones issued to students are cashback cards and reward cards. These cards will likely have zero annual fees and be a good starting point for the majority of people. 

Cashback cards will pay you back a percentage of what you spend on eligible purchases. This amount is usually around 1%.

Reward cars will give you points on eligible purchases that you can utilize at a later date. 

There may also be options for travel rewards cards and other high percentage cashback cards that come at an annual fee. It is likely that the rewards that you will receive will not be greater than the annual fee given your expenditure at this point in your life although it is definitely something to consider on a case by case basis. A $500 credit limit, $0 annual fee card with definitely get the job done.

It is important to go in knowing what you want because banks are constantly willing to issue more credit to you than you can afford. Credit card fees are a major source of a bank’s income so they are always looking to capitalize on the ill-informed. 

It should become a part of your routine to pay off your credit card every two weeks and not carry a balance over a month. Doing this will make sure you do not incur any interest charges on the money you owe. 

Should I get one?

Unless you have a significant amount of wealth you will be applying for a mortgage or car loan at some point in your life. Developing a good credit score is essential for reducing the amount of interest you have to pay on the money you borrow and save you thousands of dollars. A credit card is a great way of building your credit score. I will be using the TransUnion credit score in my discussion. 

Your credit can range anywhere from 300 to 850.

Your credit score is broken down into a few categories: Utilization, payment history, balances, depth of credit, new credit, and available credit. We can go more in-depth on these in a later blog. 

Your credit card should replace your debit card for small everyday purchases in order to capitalize on the benefits of the card. As long as you can pay off your card and not carry a balance you can build your credit score and avoid fees. The benefits are pretty good as you increase your chance of qualifying for lower percentage loans and saving you tons of money in the future. 

But, there are two sides to every story. 

Why you shouldn’t get one

If you already have trouble spending money a credit card can ruin your credit score and put you into virtually irreversible debt. The credit that becomes available for you from credit cards will act as a catalyst for your financial actions. If you were already good with money you’ll be fine, if you are bad with money you’ll only be worse off. 

If you carry a balance on your credit card you will be paying around 20% extra on the money you owe. If you carry $100 to the next month you now owe $120. I think you can see how bad this can get on a larger scale. Along the way, you will also be ruining your credit score and borrowing money will cost you more in the future. 

If you don’t have the money in your debit account do not spend the money on your credit card. You won’t be able to pay it off and you will hate yourself in the future. A rule of thumb is if you cant buy 10 of them you can’t afford to buy one of them. 

People also justify their purchases all the time by saying I get 1% back on my card. Do not get stuck in the trap of spending to get money back. If you don’t buy a $100 item you didn’t lose out on 1% you saved 100%. As humans we are very good at convincing ourselves that we need to purchase something, avoid this urge as much as possible. I would recommend reading my previous blogs on saving and budgeting for more about allocating your money and using your money wisely. 

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