For Financial Worries

Top financial worries for the self-employed revealed by Solution Loans

Money worries can affect every small business owner, whether it’s fretting over keeping clients on board or feeling uncertain about your cashflow.

If you find these things playing on your mind then you’re not alone. A new survey by Solution Loans has uncovered which financial responsibilities small business owners and the self-employed find most stressful.

From least to most stressful, here’s what’s keeping UK business owners awake at night.

12. Funding marketing efforts

When you’re thinking about all your other outgoing costs, marketing can often take a back seat, which may be why only 18 per cent of those polled said it was a financial stress for them.

Still, marketing can be crucial to business success. Check out our list of marketing mistakes to avoid – so long as you don’t have too much on your plate already.

11. Unexpected tax bills

And marketing isn’t the only concern when it comes to budgets. With Self Assessment only coming around once a year it can be easy to forget how big a sting tax bills can be.

Which is probably why over one in five of those polled said that an unexpectedly large tax bill was one of their biggest worries. And as the government have shelved their ‘making tax digital’ plans for now, we won’t be seeing quarterly tax returns for at least a few years.

10. Investing in new ideas

When you’re running a business, it’s tricky enough keeping things afloat – let alone stressing about bringing new ideas into the mix.

However, when you do decide to invest in research and development, it can be yet another financial worry. In fact, small business owners say they’re concerned about investment in new ideas equally as much as unexpected tax bills.

9. Finding funding

While there are a number of schemes out there, finding the right one for you, applying for it, and actually succeeding in securing the funding can be a long and difficult process.

Though whether or not you need funding depends on where your business is and what plans you have. Finding funding proved to be a worry for a quarter of small business owners.

8. Paying competitive salaries

When it comes to hiring your first employee – and every employee after that – their salary becomes another outgoing cost. And if you want to keep the best people working for you, you need to pay them a competitive salary.

This could be why 28 per cent of people who took the survey said retaining top talent was a major money worry. Interestingly, female business owners appear more worried about wage bills – 20 per cent more than men.

7. Managing overheards

Male business owners, on the other hand, were more ly to be concerned with managing overheads – paying bills, utilities, and rent on office space. Overall, nearly a third of respondents said this was their biggest financial concern.

6. Lack of knowledge about their company’s financial situation

Getting a handle on the financial matters of your company – whether it’s cashflow, managing overheads, or maintaining your profitability – is made all the more difficult if you feel your depth with monetary matters.

That’s the case for almost a third of small business owners, according to this study. 32 per cent of respondents said their lack of knowledge on their company’s financial situation was a major concern.

If you’re finding yourself struggling with this side of your business, you could consider hiring an accountant, or using accounting software designed particularly for small businesses.

Though marketing efforts and investing in R&D can often help with this, it appears fewer business owners take this into account.

4. Late client payments

Late payments takes one of the highest places, which won’t come as a huge surprise given that last year small businesses were owed £26 billion in late payments.

Over half of small business owners said that late payments were a significant financial worry for them – which is understandable, given they can cause a small business to close its doors.

3. Continuing to remain profitable

If your business isn’t profitable then you don’t have a business. Many entrepreneurs have struggled over the last decade as the whole world saw an economic downturn.

Though things look financially brighter than they did back in 2007, 58 per cent of small business owners still say that maintaining profitability is always on their mind.

2. Managing cashflow

Whether you’re buying stock, investing in office space or searching for funding, keeping yourself in the green is vital for your business to function.

And it’s not always easy – especially if, 32 per cent of small business owners, you find financial matters cause you confusion. Still, nearly double that amount worry about cashflow, with 60 per cent saying it’s a major concern.

1. Losing existing clients

Building your business is all very well, what do you do if it starts to fail?

According to the survey, the biggest monetary worry for British small business owners is keeping clients on board. 64 per cent of those who responded said that this is what causes them the most stress.

While it’s important to keep on top of financial matters, undue worry and stress won’t help make things better. If you find you’re fretting without actually taking positive steps to sort your finances out, take a moment to read our tips to help small business owners de-stress and then see if you can be more productive.

With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it’s public liability insurance, professional indemnity or whatever else you need, we’ll run you a quick quote online, and let you decide if we’re a good fit.

Источник: //www.simplybusiness.co.uk/knowledge/articles/2017/06/top-financial-worries-for-small-business-owners-and-self-employed-revealed-by-solution-loans-research/

These 8 Everyday Financial Worries Have One Common Solution

Recent data from a Money Magazine financial survey of American households sheds light on a shocking reality: 60 percent of respondents expressed anxiety about their family’s long-term financial stability.

There are myriad experiences and ly a few horror stories behind these figures, with which most of us can identify — the housing market collapse, 401(k) balances, job layoffs, rising healthcare costs, etc.

But with the economic rebound and 2014’s all-time stock market highs, you would think American households would have a brighter outlook on the future.

To that point, one especially interesting section of the survey indicated short-term optimism is exceptionally high for these very same folks. Ninety percent of respondents felt their financial circumstances would be the same or better in 2015. Yet their long-term sentiments were sharply different.

This survey is just a small window into the lives of everyday Americans ranging from recent college graduates and young professionals to high net worth business owners and retirees.

Let’s examine the root cause for household financial anxieties and focus on eight of the most frequent financial concerns.

Along the way, we’ll highlight one very simple, frequently overlooked answer, to calm each and every worry.

1. What happens if my income disappears?

Whether you’re working for an unstable company or in an altogether shaky industry, everyone loses some measure of sleep worrying about income loss.

The question is: what have you done about it? Many fortunate employees have disability insurance as part of their company benefits.

While this serves a very important function, most could not survive such a sharp drop in income. The solution: disability and life insurance protection. A few dollars each month will provide exponential benefit in the event of temporary or permanent loss of wages.

2. How will I ever erase my debts?

We all take on debt in some form or fashion throughout life — a mortgage on our first home, a loan for a new car, student loans for higher education, or credit card debt necessity. Plenty of financial pundits will tell you to erase all debt, but as I’ve mentioned before, not all debt is bad. Uncontrolled debt, however, can ruin your life and the lives of those around you.

A 2012 study of middle-income American households found that those age 50 and older carry an average of nearly 33 percent more credit card debt than those below age 50.

Economic hardships, declining real estate values and a host of other problems are to blame, but the data raises an important question.

Assuming those over age 50 aren’t working forever and assuming their savings aren’t rebounding, what happens to that debt when they die?

The short answer is their estate typically inherits the debt and offsets any assets. Translation: the debt comes the heirs’ inheritance. Plan for this in your younger years and secure enough life insurance to cover any business or personal debts you might leave to your heirs in the event of your untimely death.

3. Can I afford to raise children?

For couples planning for families in the near future or those who are “in the thick of it” already, the expenses of child rearing are nothing short of staggering.

There are plenty savings vehicles and investment options for parents or grandparents looking to give Little Junior a boost.

Some options offer more features than others but one especially flexible option involves life insurance.

In addition to growing your cash value for school tuition, room and board, or unexpected medical expenses, you also have life insurance attached to provide a lasting benefit at death.

Best of all, if Little Junior lands a full-ride scholarship, the cash value is not required for education expenses as with a number of other savings options. The money is yours to do whatever you want.

4. How do I plan for a tax-favored retirement?

Take a poll of your five closest pals and ask them who looks forward to paying taxes in April. Chances are you won’t get a very warm response.

Ever since the Revenue Act of 1978 laid the foundation for the 401(k) plan as we now know it, the burden of a successful retirement has shifted to you and me.

Thankfully, we have investment advisors to help guide us along the way, but my point is your parents’ and grandparents’ company pensions are largely a thing of the past.

So how can we take control of our own retirement and help ensure we not only diversify our mix of investments but also diversify the tax treatment of our retirement assets? 401(k) balances were nearly $4.

3 trillion at the end of March, 2014, which represents almost 20 percent of the total retirement savings for American households. Each and every dollar of retirement income taken from traditional 401(k) accounts is generally taxable.

What if you could supplement these core retirement investments with an account that builds cash value and allows you to turn on a tax-free income stream? You guessed it — a cash value life insurance policy may be a good fit.

5. What will happen to my business and employees?

Most business owners, especially small business owners, are laser focused on growing their companies, building a loyal customer base and ultimately increasing net income.

As a small business owner myself, I can tell you my focus is often tested by worries — especially financial worries.

A 2011 survey of more than 900 small business owners found that, while more than 40 percent of respondents said dealing with the death or disability of an owner or key employee was a major concern, fewer than 25 percent had formalized any planning to address the concerns. Disability and life insurance are critical components of any business plan, large or small. The coverage provides the cash flow and capital infusion to continue business operations, hire replacement leadership or buy out partnership interests from a deceased’s family.

6. I’m only getting older. What happens if I get sick?

You’ll never be younger or healthier than you are today. From a financial perspective, it’s imperative to take advantage of opportunities to capitalize on this gift. Start saving as early as possible and save in different ways. Cash in a bank account is good, but so are properly allocated investment accounts, quality real estate or even a life insurance policy that builds cash value.

Many life insurance policies can be tapped before death in the event of chronic or terminal illness and some carriers even offer a long-term care insurance rider to help cover the cost of care for skilled nursing and home care among other qualifying expenses. Utilizing multiple avenues of savings, including a portion in life insurance, will put you in a stronger position to manage the rising costs of medical care due to illness.

7. Will I be able to continue charitable giving?

Giving to charity may have fallen along with the stock market a few years back, but as account balances have rebounded, so too has charitable giving.

In 2013, Americans gave more than $335 billion to a mix of charities, just shy of the 2007 high of $349 billion.

Giving has grown each of the past four years and the trend is expected to continue — as was evident with this summer’s wildly successful ALS Ice Bucket Challenge, which topped $100 million in donations from more than three million unique donors.

However, what happens if you die prematurely and your donations are lost? Chances are, the good works, community impact and critical services these charities provide will suffer greatly.

Many donors choose to name their favorite charities as beneficiaries of life insurance policies to ensure their funding commitment continues.

There may also be favorable tax benefits available to you as donor — a bonus over and above the lasting impact your gift is sure to have.

8. What will my financial legacy be?

Nobody sets out with a plan to leave survivors with a financial mess, but through life’s twists and turns some unfortunately end up with utter chaos. With simple planning in advance, you can chart the best course for your own financial legacy to carry on your values, give a boost to your heirs or simply safeguard treasured family heirlooms.

The term ‘estate planning’ may connote images of blue blood aristocrats with many millions in trust funds, but while few are fortunate to experience that level of success, each and every one of us needs some measure of estate planning. In it’s simplest form, estate planning is merely a directive for your heirs on how you’d things handled when you’re no longer able to make the decisions and how you’d things divvied up when you die.

Studies show that more than 50 percent of American households don’t even have wills, let alone more detailed estate planning documents.

Ensure your wishes are carried out while protecting the assets and providing for the people you value most.

Winston Churchill famously declared,

“Let our advanced worrying become advanced thinking and planning.”

Worry, especially financial worry, is frequent, so it’s important to expect it, anticipate it and plan for it. While life insurance is not particularly sexy, it remains a versatile financial tool worth a closer look as you plan and prepare for the ups and downs of life.

Featured photo credit: Screaming via freeimages.com

Источник: //www.lifehack.org/articles/money/these-8-everyday-financial-worries-have-one-common-solution.html

Americans Have Financial Worries – But Debt Is Not High On The List

We all have our respective financial worries. Even if, according to the data published on Conference-Board.org, the consumer confidence index is up last March, you can expect that people will still be worried about their finances.

Money is something that we constantly stress about. It comes in many forms and is usually influenced by your lifestyle and priorities. If you have children, you would be worrying about providing for their needs.

If you are taking care of your elderly parents, you are probably thinking about medical bills and any future health-related costs that you might need to pay off.

If you are fresh college, your worries are probably be centered around earning a living so you can pay off your student loans.

Regardless of the state of our country’s economy, the stress that we feel about our money will always be present. It comes in varying degrees but it does not really go away. The moment you think about where you will get the money to pay for something – that is already a form of money stress.

When you think about the financial worries of the Americans, the first thing that will come to mind is probably debt problems. While it is a part of what we constantly think about, it is surprisingly not the number one cause of our money stress.

What worries Americans about their finances

Gallup recently published a study that revealed the various money worries of Americans. It is actually a two-part series that says a lot about the financial behavior and priorities of the average American consumer.

In the first series, the article published on Gallup.com titled “The Consequences of Debt in America” revealed that financial worries are, admittedly, higher among those with debt. However, it is only true for some financial areas.

For instance, people who have debt are more ly to worry about their retirement than those who are debt-free. In this same article, it is also revealed that debt itself is not really the main reason why they worry.

They worry about their food, their expenses, their lifestyle – in general.

There are two important truths that are evident from this study.

People with debt are more ly to worry about their future and ability to pay off debt.

The study done by Gallup revealed that people with debt tend to be more anxious about their finances simply because they have a credit obligation to fulfill. It has to be taken cared of on top of everything else that they have to pay for each month.

Does that mean they have more financial worries than those who do not have debt? In some areas, retirement, it seems that they have more reason to worry. They are also worried about how they can meet their debt payments – which is natural for borrowers.

People worry about basic necessities, regardless of their debt situation.

When you look into the stress that people feel in keeping up with their standard of living or being able to pay the rent – the anxiety is practically the same for those who are in debt and those who are not.

Apparently, debt brings a lot of consequences but it does not really influence the financial worries that the average consumer goes through – at least when the basic necessities are concerned.

The same study also proved that indebted or debt-free people both worry about their ability to meet medical costs – both normal and serious illnesses.

These revelations allowed Gallup to arrive at the conclusion that being debt free does not make you worry less about your ability to survive financially.

In fact, the main reason for financial worries seems to be rooted in the financial confidence of the average consumer. When they feel that have enough money to live comfortably, they worry less about their finances.

But if they are not confident about their financial position, that is what fuels the anxiety that they feel towards their finances.

One thing is for certain, those who carry debt are more ly to cut back on a lot of expenses just to make ends meet. Those who are debt-free do not have to make this sacrifice but that does not make them any less worried about their ability to finance their day to day expenses.

How to build financial security to avoid money stress

The key to removing your financial worries is simple – you have to secure your finances.

Whether it is the effects of debt stress or the usual anxieties over basic necessities, only financial security can really give you peace of mind.

It is not the income that you earn or the standard of living. When you have achieved financial security, that is how you can really tame all your worries about money.

Here are some tips to help you build financial security to reduce money stress.

Know and use financial plans.

Whether that is to lower your expenses or boost your income – it will all be what you know of your financial capabilities. Now the best way to get to know your personal finances is to use financial plans. There are so many out there that you can use. Start with a budget plan and follow through with a spending plan.

You can also create a savings plan that will help meet your financial goals.

Build up your emergency fund.

The financial worries, according to the study from Gallup, is more evident on people who are not confident about their money. To build that confidence, you need to focus on your emergency fund. Being prepared for the unexpected is the best way to battle the uncertainties in your financial life.

According to an article published on Forbes.com, 6 10 Americans cannot afford to pay for an emergency expense that is higher than $500. If this is you, then you need to get serious about saving enough money for your reserve fund.

Otherwise, you will always be worried about the unexpected events that you might face.

Invest in your future.

Just the emergency fund, knowing that your future is financially taken cared of is another way for you to battle your financial worries. If you do not have a retirement fund, now is the right time to build it up. You can invest in stocks and bonds too. This is a great way to diversify your income – in case something happens to your primary source of cash.

Use credit cards wisely.

Financial security does not mean you have to completely debt. You can still use credit – but you should know how to manage it so it never becomes a threat to your finances.

You can be a high-volume credit card user and still be debt free. Do not be afraid of these cards – instead, maintain your power and control over it.

One of the ways to lessen financial worries is by creating multiple streams of income. Here is a video that will explain what it is and the different options that you have to open other sources of income.

Источник: //www.nationaldebtrelief.com/americans-financial-worries-debt-not-high-list/

Are Financial Worries On the Horizon For 2006?

The nations of the West possess more developed resources and national wealth than at any other time in history. Ironically, most have experienced at least one difficult time making ends meet.

Financial pressures seem to bear down upon us, robbing us of peace of mind. But should this be?

Though not every detail and cause of every financial burden can be addressed in just one article, we can focus on two major concerns. One is a financial trend that has been around for decades. The other is looming on the immediate horizon—a national concern that all homeowners and families will need to address in 2006.

A Modern-Day Financial Pitfall

There is reason to believe that millions may be forced to “tighten their belts” financially. Millions are living far beyond their means! Most do not save anything from their earnings. Is it possible that your personal debt bubble will burst?

Two generations ago, it was common practice to spend only what one had left over after all obligations were met, including a weekly savings deposit. Most people practiced the habit of using cash instead of any form of credit.

But today, millions of consumers in the Western world have no doubt spent above and beyond their means this past Christmas and New Years’ season. The temptation to use one’s credit card is highest then. Many put off the thought of how they will pay off the debt.

The Christmas shopping season is, of course, an economic boom time for the retail, restaurant and hotel industries. During the months of September through January, consumer spending escalates.

Prior to these months, many consumers live beyond their means.

When heading into the holiday season, these same people cannot bear the thought of missing out or appearing to be broke, as they feel that buying gifts is more important than having their finances in order.

The common solution? Most of this spending is done on credit—pull out the credit card or home equity checkbook, and let out a big sigh of relief. It is estimated that nearly half of U.S. households carry an average of two to three credit cards, with a combined balance of approximately $10,000. Often, credit card debt incurred during this time can take months—sometimes years!—to pay off.

With all this debt, many make New Year’s resolutions to stop spending so much money.

Credit Overflow!

It can be exciting to receive a letter or greeting card from someone special, or to receive the proverbial “check in the mail.” However, a trip to the mailbox usually results in being bombarded by many forms of junk mail.

But beware. Within this massive amount of junk mail lies a subtle assault, one that can bring you and your family financial instability.

This incursion comes in the form of credit card offers from banking institutions, on average three to four times per week. They are packaged as though free money is being given away.

Others target those who have already fallen victim to the pitfalls that undisciplined credit card use can bring. They sometimes arrive with pre-printed promotional offers of 0% to 5% balance transfers, reward programs, etc.

These offers can be used wisely by the disciplined card user; but for the undisciplined, it can lead to a short-lived feeling of financial freedom—only to be trapped in a vicious cycle of debt accumulation.

Is all credit card use wrong?

No. Credit cards can be a good tool for the individual who understands how to live within his means. But where does one start?

The first step is to be honest with yourself and determine why and how you would use a credit card.

In the 21st century, it seems natural for everyone to own a credit card. For many, there is a real need to use credit cards. For instance, some people travel often. Having a credit card on hand is almost a necessity for hotel stays and car rentals. Also, many use their credit cards for the convenience of Internet shopping, online auctions, etc.

But for those who lack financial discipline, having credit cards can be the beginning of being enslaved to that same convenience—leading to high interest rates and mounting debt.

Many use their credit cards to purchase lunch at McDonalds! Is it wise to pay interest on a quick lunch? Remember this principle: All debt incurred on credit cards can turn into a mortgage on your future paychecks. Wise King Solomon was inspired to write, “…the borrower is servant to the lender” (Prov. 22:7). How true!

If you cannot find a solid reason for needing one, then why not make all business transactions by cash, debit card or personal check? This will leave you with the best opportunity to stay financial enslavement and will give you personal power over your financial future. Getting into the habit of using cash more often is wise.

If you find yourself already in credit card debt, stop charging! You may need to find a source of additional income. Working hard (Ecc. 9:10) and applying the “cash only” principle is a sure way debt.

The next step is to find the right card and apply wisdom in your transactions. Here are some important basic points:

• Look for a credit card with a fixed interest rate rather than a variable rate. A fixed rate is secure, while a variable rate will rise as short term interest rates rise.

• Seek out low interest rates with minimal fees.

• Look for offers with the longest grace periods and cards that have no annual fees.

• Be careful with 0% to 2.9% offers that hook you in, and then kick in a high interest rate after the 6- to 12-month offer. Interest rates of 18% to 24% are common under such offers. The average interest rate is currently around 13% according to www.bankrate.com.

• Avoid paying off credit cards with more credit cards.

• Read the fine print before signing up.

(To compare credit card offers, you may find it helpful to visit certain non-profit websites.)

You might ask, “What about reward programs such as airline miles, free gasoline and cash back offers?” These can be a good deal only if the card user disciplines himself to pay off the full balance monthly. Paying off your monthly balance is the only way to use a credit card wisely, especially with cards that offer rewards. Try to pay off your card before the interest rate kicks in.

For example, those who use a 1% cash back offer and systematically pay off their monthly balance can be 1% ahead financially on every transaction, as long as the above mentioned principles are adhered to.

The simplest way to arrive at financial strength is to develop a disciplined habit of living within your means. Simple, common-sense spending habits, over time, can put you on the right track.

Another Reason to Tighten Our Belts

The long-term effects of the recent hurricane season will have an economic impact on millions. And with ever-increasing personal debt, many are beginning to sense some “bumps in the road” in their financial future.

Patricia Clark, spokesperson for the Citizens Utility Board, a consumer watchdog group, said, “It’s going to be a horrible winter for consumers.” She added, “We are advising people who call us to get on the budget plan and minimize the impact” (Chicago Sun-Times).

Peoples Energy has forecasted that natural gas bills will increase anywhere from 39% to 69% for 2006! According to the utility company, this will occur because last summer was hotter than normal throughout the nation, creating greater demand for electricity produced from natural gas, and production is struggling to keep up. This—combined with the unknown long-term effects of Hurricane Katrina on natural gas production in the Gulf of Mexico—creates concern in the market and leads to increased prices.

Recent headlines and reports indicate that 2006 may be the year that many American households will be forced to revise their budgets.

One way to combat the problem of skyrocketing natural gas prices is to weatherize your home. This can be done in a variety of ways. Many utility companies recommend the following:

• Caulk and seal around plumbing pipes, frames of windows and doors.

• Consider getting a tune-up for your furnace.

• Close fireplace flues when not in use.

• Lower your thermostat temperature—each degree can save up to 3% on heating costs!

• If you can afford it, purchase thermal pane replacement windows. This can save you up to 30% of your energy bills.

Rid Yourself of Financial Worry

Most are unaware of a great financial law that has to do with one’s income. Many think to themselves, “What I earn is my personal business. I have the freedom to do whatever I want with it—after all, it’s mine!”

But is the money you earn really yours? Don’t be too sure.

The fact is, everything that is produced and all that money can buy comes from this planet. We had nothing to do with creating the earth.

God created that! All we provide is our physical energy and thoughts to work and extract the resources from a planet that God created. Even the energy and thought processes that we utilize come from the Creator.

Not only did He create all physical matter, force and energy, but He also created the human mind. God supplies the energy used in thinking, planning, designing, etc.

God claims ownership over all! Notice: “The earth is the Lord’s, and the fullness thereof; the world, and they that dwell therein” (Psa. 24:1)—“Whatsoever is under the whole heaven is Mine” (Job 41:11)—“The silver…and gold is Mine, says the Lord of hosts” (Hag. 2:8).

Your income belongs to God—it is His to do with as He pleases. But God does not need our money. He wants to share the great resources He has created, and teach us His way of give.

Although God holds claim to everything, He has provided for us a system that yields abundant blessings. All that He requires is that we put aside 10% of our income and invest it with Him. By doing this, God becomes our financial partner. God allows us to use the 90%, blessing it so that it will go even farther than the 100%.

But God offers us an opportunity to receive great blessings: “Bring you all the tithes into the store house, that there may be meat in My house, and prove Me now herewith, says the Lord of hosts, if I will not open up for you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it” (vs. 10).

This is God’s promise—and it is the way to ultimately prosper and get debt.  

In Matthew 6, Christ explained that human beings need not be overburdened with life’s ever-increasing pressures and worries (vs. 25-32) as long as they focus their lives on this: “But seek you first the kingdom of God and His righteousness; and all these things [food, clothing, shelter and other necessities] shall be added unto you” (vs. 33). 

The way to truly eliminate financial worries is to make God our personal financial partner and advisor for 2006—and for the rest of our lives!

Источник: //rcg.org/realtruth/articles/417-afwothf.html

3 Financial Worries That Didn’t Exist For Your Parents • Part-Time Money®

Between taking on way too much student debt, doing sensitive banking on smart phones, and forgoing home ownership, it may seem all of us are ignoring the money lessons our parents and grandparents tried to teach us.

Being careful with money is looking more and more a skill from a previous century.

But the real issue isn’t loss of money skills. It’s the fact that the financial world has seriously changed in the past few years—and how it will continue to change. Millennials (and the generations that come after them) are dealing with new and difficult financial problems that never would have occurred to earlier generations.

Here are three common financial problems that will make a huge difference in Millennials’ finances—that didn’t exist just a couple of decades ago:

1. Data mining

Privacy as a concept is changing in the new Millennium. It’s now perfectly acceptable (and even expected) to share every facet of your life online, which often leaves older generations scratching their heads.

But our changing expectations of privacy are not just about embarrassing photos and the confessional nature of blogging. The fact that we live much of our lives online means that companies now have incredible insights into our spending habits. And that means that we are much more vulnerable to marketing, since it can be tailored to us.

For instance, you may have noticed that whenever you do a search for a product that you do not buy, that product will then show up on completely unrelated sites’ advertising. That’s because Google is selling your search information to advertisers.

This gets even more worrisome when you consider just how specific the targeting is. According to Consumer Watchdog, this kind of data mining allows advertisers to pinpoint “pain points”—the maximum prices that consumers are willing to pay. Since marketers recognize that pain points are different for different people, data mining allows them to sell the same product at varying prices.

Of course, marketers have always attempted to find these pain points. But data mining—which allows marketers to know whether you frequent savings websites or make reservations at high-end restaurants—can pinpoint your pain point much more accurately.

While it’s unly that you stay up nights worrying about what is being marketed to you, it’s ly you will see a difference in your finances because of this targeting.

And of course, data mining will only become more sophisticated and more accurate, meaning marketing will be more and more difficult to resist.

2. Ease of purchase

Of course, the influence of marketing would not be nearly as big an issue if people still paid for goods and services the way they used to: with cash or checks in a physical store.

Nowadays, even very frugal individuals tend to have their credit card information saved on various websites, making it ridiculously easy to spend money without feeling it. And considering the fact that you can make in-app and in-game purchases on your phone without even pausing your game-play means that spending money can be done almost entirely without thought.

If you are not spending your money mindfully, 99 cents here and $5.99 there can add up to big financial worries.

3. Grey charges

Grey charges are little charges on your credit card or cell phone bill that you haven’t necessarily agreed to and don’t know about. They come in several flavors, but there are three that you will see most commonly:

• Free-to-paid charges—These occur when you sign up for a free trial that requires you to enter your credit card, and then forget about it. Once the trial period ends, your credit card is charged.
• Phantom charges—These charges occur when you are charged for a product or service ( a ring tone or a reoccurring credit protection service) that you didn’t know you were signing up for and didn’t agree to buy.
• Zombie charges— the name implies, these are charges that will not die even after you have tried to cancel them. For instance, you might not realize for a few months that your gym membership is still being debited from your account after you finally quit the gym.

Grey charges are especially pernicious because many times you have agreed to them in the terms of service (that you didn’t read) and you don’t realize you’ve paid them until you several months have gone by—at which point you might decide that it’s not worth the fight to reverse them.

And at a staggering cost of $14 billion per year, paying for things you don’t know about, don’t want, and don’t use is a major financial headache for the new millennium.

The Bottom Line

The technology that is the backbone of our modern society is also changing the financial playing field. In the new millennium, we are all going to have to be savvier, more mindful, and more attentive to our money than our parents and grandparents were—just to keep up.

Photo Credit: heinekendark via Compfight cc

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Источник: //ptmoney.com/financial-worries-for-millenials/