As the year draws to an end people often ask about our New Years resolutions, which of course always prompts me to think of some. I used to have ‘getting fit’ as one of mine, but I kicked that one some years ago (I’ll blog about that soon).

I’m not a numbers man. It isn’t my thing. But, getting on top of your finances is a very important piece of achieving a thoroughly happy and successful lifestyle. What I do recommend to everyone is to sit down every six months and review all your incomings and outgoings. You will be surprised as what you are spending and where.

How to stop being poor

The hidden killer is the credit card. This is the thing that is stopping 80% of western families from being successful. I’m sure you’ve heard this before, but I bet you’ve also heard that you should get fit? – So why don’t you? And why do you still carry credit card debt? (Hint: it is the same reason)

Banks and credit providers are killing you while the rich get richer. Have you ever noticed that everything is cheaper if you have the money? Not only can you negotiate a better deal with cash, but if you pay with credit, it will definitely stop you from becoming either wealthy or in many cases comfortable.

Get fit with money

If you spent $2,000 on Christmas Presents for your family and friends and paid cash, it would cost you $2,000 (or less if you negotiated less for cash!).

If you paid for this with your AMEX Line of Credit at 18.75% interest and you paid the minimum payment each month of $80 you would be paying $2,555.82 for the same thing that the person with the money paid $2000 for.

If you used a store card at 22% interest, the same $2,000 will cost you $2,699.

You know it doesn’t make sense to use credit, just as you know you need to get fit.

My advice for your 2008 New Year resolution is to get fit with money and stop giving it all away to the finance companies. It just doesn’t make sense. The rich get richer and the poor get poorer because the poor pay the most for everything they buy.

Never buy something that is on special with a credit card unless you can pay it all when the bill is due.