Posted by: Kate | November 25, 2010

Money Talks: Know Yourself

Wow, thanks for all the great conversation on the Money Talks post the other day! It seems people are quite interested in the topic, so I think I will be posting more about it from time to time, under the Money Talks post title. I don’t claim to be an expert by any stretch of the imagination, but I do like to talk and open conversations, so that is what I will do. I’ll also occasionally provide links to some of the websites I like to read (not financial sites,but personal sites with a focus on money).

I think one of the best things you can do to help yourself in the area of money is to understand how you think about, spend and save money. It’s not as easy as it sounds. We are constantly bombarded by bank and credit card commercials that try to tell us who we are and how we should deal with our money. For those of us who have accepted the advice of bankers, investors, advisors, etc, there can still be a nagging worry that we aren’t doing it right, we’ve left something undone. I think that comes from not knowing your comfort level about money.

A couple of years ago, before the big financial upheavals, our mortgage was up for renewal. It had been a five-year term at favourable rates. Mr. Kate and I looked at a lot of mortgage rates, companies, talked to people whose opinion we valued, etc. But in the end, we did something that not everyone advised us was smart – we signed a 10 year mortgage term. We felt it was true to us. Our banker said something that has stuck with me when we told her our decision. She said, “Really, it’s what you can sleep with that matters.” We are getting a very good mortgage interest rate, our mortgage will be more than half over when the term is up, and we don’t have to worry about interest rates, inflation, or fluctuating payments for 10 years. For us low-risk people, that was a really good thing and worth the potential loss in savings by choosing a shorter, more aggressive term. We knew both sides, and made our decision based on who we were.

Know yourself. If you are no good at money management, you probably don’t want to have more than one credit card. If you love to do research and are super-organized, you can probably do your own investing. If not, it’s ok to let someone else do it for you, after you make sure they are the right person for you and your money.

I often go back to what the banker said. Can we sleep at night with this decision? It’s a helpful thing, to know yourself.

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Responses

  1. that’s good advice kate, not only in the financial world, but i all aspects of life.

  2. Yes, being true to yourself solves many issues. What I’ve found is that what is true for me (financially or otherwise) may not be mainstream, usually it’s not. I’ve learned to be okay with this fact.

  3. Excellent advice. It’s funny because my husband and I handle money a bit differently. And alone, neither approach may be the best approach, but combined (he handles the investments and I handle the bills, small accounts etc), I’m pleased with our decisions and yes can sleep at night without worrying about them. We’ve made some non-traditional decisions in the past as well because they felt true to us and in the end, they were the right decisions.


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