Rule of 78

Rule of 78

The Rule of 78 is likely to appear in a couple of our posts, so we decided to do a separate post to explain it. There is a little math involved, but it’s very straightforward. The Rule of 78  (also known as the “sum of the digits”) is often used as the the basis for companies to earn interest on loans, calculate interest rebates, or even calculate car insurance refunds. Understanding how it works and

Understanding Hire Purchase – Part 2

Understanding Hire Purchase – Part 2

Hire Purchase (HP) is likely the most common way household items are purchased and financed and is sometimes regarded as an easy way for persons of lesser means to afford certain necessities (or luxuries). But HP transactions are not straightforward. For clarity, we are not suggesting this is a reason to avoid them. On the contrary, our objective is to identify the points you should be aware of, so you have no cause for later

Buying a Car – Your Budget

Buying a Car – Your Budget

In Part 1 of this post we identified several points that you should consider when buying a car. In this Part 2, we’ll consider the costs involved and the impact on your budget. Creeping cost base increase Before starting, we should make a general point about your targeted level of savings. One of our Cari$ Rules for Financial Freedom is to live on approximately 70% of your means, or put another way, live on 70% of your

The Debt Decision

The Debt Decision

A financial lifestyle choice that CariDollarsAndSense recommends is for everyone to always Be Uncomfortable With Debt. We also believe that true Financial Freedom is only achieved when we are debt free, which is one of our Cari$ Rules for Financial Freedom. Being in debt impacts our lives in so many important ways that we have dedicated several articles to the topic covering: Affordability: How Much is Enough Debt Part 1 and Part 2 Understanding interest rates: APR

Be Uncomfortable With Debt

Be Uncomfortable With Debt

One of our Cari$ Rules for Financial Freedom is to “Be debt free” because we believe real Financial Freedom is only achieved when you are debt free. Put another way, we recommend individuals treat debt with a healthy amount of respect (if not fear), eliminating it quickly, or avoiding it whenever possible. But if we look around, many people use debt freely, almost as if there were no consequences. In this, and a few related posts, we

Understanding Hire Purchase – Part 1

Understanding Hire Purchase – Part 1

Hire Purchase (HP) transactions take place everyday for various consumer goods such as furniture, appliances, televisions, and even cars. Several retailers offer these items for sale and tempt you by offering you to “buy on terms”, or put another way, pay for the item with instalments over an agreed period of time (usually up to three years). It sounds pretty straightforward: bring a job letter, payslip, utility bill (or some variation of these requirements); sign

APR – The True Cost of a Loan

APR – The True Cost of a Loan

We all know the interest rate on a loan is the cost to borrow money. Although at CariDollarsAndSense we believe Financial Freedom is achieved more rapidly if you avoid most debt, if you must borrow, then try to get the lowest interest rate possible. Unfortunately, determining the lowest rate is often not straightforward. The purpose of this post is to help you understand the problems involved, so you can keep more of your money (pay less interest).

Couples Finances: Joint or Separate Bank Accounts?

Couples Finances: Joint or Separate Bank Accounts?

In the previous article, Couples Finances: Long-term Relationships, we explained the importance of having a pre-marriage financial conversation in order for both persons to understand each other’s financial health, philosophies, and goals, as well to obtain agreement on certain key decisions. As a reminder, we view a long-term relationship as a commitment to share your life with someone, whether formally or informally. But to keep the description simple, we just refer to both these arrangements broadly as “marriage”.

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