Beating Broke

Personal Finance from the Broke Perspective

The Biggest Reason to Always Pay with a Credit Card

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Reason to Always Pay with a Credit Card

Some financial advisors and gurus urge all of their audience to use cash only. They argue if you use cash, you can’t overspend. Further, they say you’re also more conscious of your spending when you use cash. While these arguments may be true for some credit card users, they’re not for all. Many people can use credit cards and stay within their budgets. In addition, paying with credit cards offers several advantages, one of which is particularly important.

The Biggest Reason to Always Pay with Credit Card

The biggest reason to always pay with a credit card is the purchase protection. I saw this in effect recently with my mom and a $450 treadmill she purchased last fall.

The Credit Card Purchase

My mom is trying to improve her fitness level, so last September, she bought a treadmill on Amazon. The treadmill was never perfect—she complained about how hard it was to walk on it. When I visited her recently, I tried the treadmill, and it felt heavy and slow. A few days into my visit, the treadmill would turn on and off, but you couldn’t get the tread to move.

Customer Service Was a Bust

We discovered the treadmill company is in China, and the only phone number for support was a Chinese number. I emailed support and told them what the problem was. The company took two days to get back to me and then asked for a video demonstrating the problem. I sent that and then waited another two days for a reply. Next, they told me how to disassemble part of the treadmill and send them more videos showing the problem. I did, and then I didn’t get a reply for several days.

Contacting Amazon Didn’t Help

Meanwhile, I contacted Amazon to ask for a refund. Amazon said they couldn’t help me because the return window closed in December. When I mentioned that the treadmill had a one-year warranty, Amazon said I had to work with the manufacturer.

Customer Service Still Refused to Help

Reasons to Always Pay with a Credit Card

By now, I had been going back and forth with the treadmill company’s customer service for approximately 10 days. Finally, I said I wanted a refund as the treadmill was under warranty and shouldn’t break after five months of ownership. The company told me to contact Amazon to activate the warranty, which I had already done, to no avail.

Contacting the Credit Card Company Made the Difference

I then contacted the credit card company and explained what had happened. After taking down all the details, the credit card company issued my mom a full refund. Having the ability to go straight to the credit card company to get a refund when all else fails is the biggest reason to always pay with a credit card.

Final Thoughts

My opinion to always pay with a credit card, especially with large purchases, was reaffirmed with this situation. Further, I learned that when purchasing something on Amazon, checking out reviews is not enough. I must also verify where the company is based. A company based in China may be challenging to work with and receive assistance.

We used my mom’s credit card refund to purchase a new treadmill from a company based in Arkansas. If she has trouble in the future, I’m confident communicating with the company will be easier.

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3 Questions to Answer Before you Start a Business

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The idea of starting your own business can be very exciting. It’s an opportunity to be your own boss, pursue things you’re genuinely interested in, and even make a positive impact on the world. However, it’s important to remember that even if you’re perfectly suited to be a successful entrepreneur, you might not be in the right moment of your life to launch your company. Starting a business isn’t something you should do lightly, or without extensive planning. It’s important to sit down and consider all of the potential challenges you’re going to face on the road to success, and how you’re going to overcome them. There are so many things that need to be considered, from whether you will need to hire a virtual assistant for healthcare businesses if you’re going down that route, to what sort of products you will make if you are thinking of entering the manufacturing sector. To help with this, here are some questions you can ask yourself to determine if you’re ready to start a business.

Is My Idea Bulletproof?

A good idea is an important part of launching any successful business. Although you might think your concept for a company is the best thing you’ve ever heard of, it’s best to do some extra research to ensure the idea is feasible. Look at the competition in your area, and how many potential customers you’re likely to have for your company. It’s also worth writing a comprehensive business plan, where you can outline exactly how much money you need to earn each day, week, and month to break even on your company’s concept. Once you know your idea is bulletproof, you’ll be more ready to invest.

Do I Have the Cash?

Obviously, most people thinking of launching a small business won’t have the money for an entire company just sitting in their back pocket. However, you should at least have an idea of where you’re going to find the crucial funding you need. For instance, you might consider a business loan, if you have the credit to do so.

Another option is to look into the assets you can leverage in your own life. For instance, you can significantly reduce your monthly expenses with some budget balancing, and use the money you save towards your business. Look at your current budget and try to find opportunities for savings. You can refinance student loans to save money on extra expensive fees and interest rates. Consolidating existing loans into a new loan with a private lender can save some serious cash.

Do I Have the Mindset?

Finally, consider whether you have the right mindset and attitude to become a successful business owner. Although most people assume they’re prepared for a life as an entrepreneur, it can be more challenging than you’d think. You’ll need to deal with a lot of stress, some serious ups and downs which can leave you worrying about your company, relationships and cash. If you’re not prepared to deal with the complexity of having your own business, and the headaches which come with it, it might not be the right time for you to take this route. You will need to juggle a lot, like how to improve the employee experience, how to optimize your website for growth, and how to handle potential outsourcing, just to name a few things. Remember, it always helps to have some support from loved ones around you to make the experience a little less painful.

How to Deal with a Person Who Keeps on Asking for Money

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Most of us know a family member or friend who is always asking for money. They may start their request with a typical line, “I hate to ask, but I have a financial situation and wondered if you could help?” If they’ve asked you many times before, they may also add, “I promise, this will be the last time I ask.” Sound familiar? If you have experienced this, here’s how to deal with this type of person in your life.

Recognize Your Role in the Problem

If you have a person like this in your life, recognize that you’ve enabled this person to feel dependent on you. You do this by lending the person money over and over again even though the person repeatedly shows that she is financially irresponsible.

I don’t point this out to make you feel bad but rather to help you recognize your role in this cycle. However, you can take steps now to end the dependency and become part of the solution rather than the problem.

How to Deal with a Person Who Keeps on Asking for Money

The first step is to decide that you won’t allow the person to take advantage of you anymore. Instead, try one of these tactics.

Firmly Say No

The next time a friend or family member asks for money, firmly but nicely tell him that you can’t lend him money anymore. Be confident in your delivery. If you say, “I’m sorry, I just can’t lend you money right now,” or “This week my money is tight, so I can’t give you anything,” you leave open the prospect of giving him money in the future, and the person will ask again next week.

You must instead clearly say that you will no longer be able to help him out financially. Then, he has no choice but to receive and understand your message. He may ask you again at a later time, but perhaps he won’t be as persistent in his request.

As you continue to firmly say no to his every request, he will stop asking. However, don’t be surprised if he becomes angry with you and perhaps even stops speaking to you for a time.

Manage Her Finances

If you’re close to the person, perhaps offer to manage her finances and teach her good financial habits. My roommate in college, Jenny, was terrible with money and regularly asked her friends for handouts. One of our friends, Simone, was studying to be an accountant. She offered to manage Jenny’s finances. Jenny happily agreed.

For six months, Simone managed Jenny’s finances. She set up a budget for her and gave her money for spending, gas, groceries, etc. Simone paid the rest of Jenny’s bills with Jenny’s money. Once Jenny got used to the system and having a limit, Simone taught her to budget her money and pay her bills herself. By senior year, Jenny was a budgeting pro and even sometimes offered to pay the tab when she was out with friends.

Person Keeps Asking for Money
Photo by Jarritos Mexican Soda on Unsplash

For this arrangement to work, you must be close to the person, and you must both trust one another. In addition, the person has to want to improve their financial situation. If the person doesn’t have any interest in managing her money, you’ll just waste your time.

Offer Him a Financial Course

If you don’t want to manage his money (which is understandable), you could offer to pay for him to take a financial course. Financial Peace University is a Dave Ramsey course that has helped many people turn their financial lives around. However, it’s not the only course available. Find one that will best resonate with the person and that you can afford to pay for.

When you make this gesture, you’re not refusing the person outright. You’re refusing to enable the person, but you’re offering to pay for a class and invest in him and his education. This shows that you want to keep the relationship strong.

Why You Should Stop Lending Money

Saying no to someone who repeatedly asks for money can feel awkward and embarrassing. However, you should say no for several reasons.

You Work Hard and Should Keep Your Money

You likely work hard for your income. Giving a portion of that money to someone who mismanages her own money isn’t fair to you. If you choose to donate the money, that’s your decision. However, if you give this person money out of guilt or because you feel bad saying no, do yourself a favor and value yourself, your time, and your money more. You’ll feel better when you do.

Avoid Spousal Disputes

The number one cause of divorce is money disputes. If you continually give money to someone in your life, chances are your spouse is not happy about this. Your spouse will likely be much happier if you learn to say no to the person. Then, you can use your money for your own family—for vacations, retirement savings, college savings, etc.

Let the Person Become Independent

You may feel bad when you say no. You may wonder how she’ll survive without the money she needs for whatever pressing emergency she has now. She’ll probably be angry with you and lash out.

However, take the time to look in the future. Imagine how much happier and stronger this person will be in a year when she is no longer looking for handouts and knows how to manage her own money. She’ll be more confident and feel better about herself. By saying no, you’re helping her grow as a person.

Final Thoughts

Saying no when a person keeps on asking for money isn’t easy. However, remember that you’re doing the right thing for yourself, your spouse, and the person who keeps on asking. When you set clear boundaries, you strengthen your relationships. If the person doesn’t understand this, you may, unfortunately, lose the relationship. If she does understand and makes changes, she’ll thank you later.

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