Why is it very important that we take care of our personal money?

Having no money is a very serious problem

Many families trying to survive in the 21st Century are faced with one of the worst financial meltdowns the world has seen since the great depression more than 70-years ago.  Unemployment is rising and with the amount of currency every country is borrowing to keep up with everything needed by its people.

Why is it very important that we take care of our personal finances?

One of the biggest problems is that all over the world families in rich countries are not having as many children as before. This means that there are less young people growing up to work and to earn money. On top of all this, our modern health systems are making us healthier and people are living longer. Simply, this means we are losing workers and we have more older people than ever before.

How is this a problem?

Every government that has an aging population and a lower birth rate does not get enough money to pay for everything it has to do.

  • A government isn’t a factory that sells things. The only way it has income is to borrow it, or obtain taxation from workers and companies.  Borrowing is good if it is used to provide more infrastructure because this provides work but the problem is there isn’t enough workers and if it is borrowed for the wrong reason then it is hard to pay back. Many countries have enormous debts that have become impossible to pay back. Governments have to pay interest and the only way they can do that is to get more tax
  • Governments needs to pay for its bills just like we do. In their case they have big bills to pay wages to the politicians, and the people who work for the government like police, and those who work in departments handling money (taxation and treasuries), welfare, military, health and education etc.

What has been happening so far?

  1. The first problem is that the population becomes smaller. The first country to recognise this change is Japan. Already some factories/businesses are already unable to obtain enough Japanese workers and this has meant more foreign workers and their families are living in Japan. This increases problems for government because although they obtain taxation they have to cope with an emerging multicultural/multilingual society.
  2. The second problem is when big companies decide to move to another country, that has workers, who are less expensive. This means that when they leave their governments loses them as corporate taxpayers.
  3. The third problem is that when any government doesn’t have enough money it has to stop spending. As welfare costs are high most governments adjust the levels of pension payments. This can be increasing the age before aged people can qualify for assistance, introduce a means test that those with large assets obtain less benefit. Basically reduce the payments in line with the reduced income tax. This is difficult because families know that they need to budget very carefully and cut back costs. When a government does this people are very unhappy. We then see people change their vote to support a person that promises them what they want. This populism has seen many changes recently in governments
  4. Some countries just borrow money to avoid upsetting the people who vote for them. This only makes the future worse as the future tax-payers will have to pay more. Governments change from time to time but it is the people that have to pay one day.

TEAM JANE–   We tell it as it is and if you want to survive in this 21st Century it is important to make sure that family finances are in order. It is not a good time to waste money.

NOTE: Gold becomes more expensive when there isn't enough money and the government is in trouble. People find that bank interest is very small and inflation is high.  Some decide to use their savings to buy Gold because it is safer than being in the bank. However, it is important to keep the gold in a safe place.

POVERTY TEST

We do know that many people are already poor and there will be more to come “Poverty” means living in conditions well below those expected and enjoyed by the majority of people living in the same Country and is not confined to a complete lack of finances

How do you know if you are poor?

One test of poverty is the following list: If you answer to one or more of these questions you are possibly poor however lack of money is not the only measure of poverty. Some people own their home but other people have to pay rent. Home owners may be asset rich but cash poor.

Governments around the world are asking older people living in large houses to sell them and to live in a smaller house. This is terrible because it upsets old people who have lived in their home for many years, raised their children and suddenly they are in a small apartment and away from all their familiar surroundings. Also, they do not get much money from the changeover. If they do obtain extra cash then they might not need the government to provide welfare to them. This makes them depressed and very unhappy.

 

CASH TEST

  • Cannot afford a week’s holiday from home each year
  • Cannot afford a night out once a fortnight
  • Cannot afford to have friends/family over for a meal once per month
  • Cannot afford a special meal once a week
  • Cannot afford brand new clothes [that is new not used or second-hand]
  • Cannot afford leisure or hobby activities
  • In the last year due to shortage of cash, could not pay gas or electricity or telephone on time
  • In the last year due to shortage of cash, could not pay car registration or insurance on time
  • In the last year due to shortage of cash, pawned or sold something
  • In the last year due to shortage of  cash, went without meals
  • In the last year due to shortage of cash, was unable to heat or cool the home. [With an electric fan or heater]
  • In the last year due to shortage of cash,  sought assistance from a welfare or community agency
  • In the last year due to shortage of cash, sought help from a friend or family
  • Could not raise $2000 in a week if I had to.

TEAM JANE Note: This test doesn’t mention rents or mortgages or the cost of transport. Given that so many people are under financial housing stress this list is only part of the story.

Define Homelessness

“Homeless” means that a person is homeless if he or she does not have access to safe, secure and stable housing. Hence even if a person has a physical home, they would be considered homeless if: - They were not safe at home (domestic violence); or - They had no legal right to continue occupation of their home (security of tenure); or - The home lacked the amenities or resources necessary for living.

Governments are facing a growing number of homeless people. Team Jane explains all about how to define and measure homelessness

More details on types of homelessness

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