In light of the new season of Rick and Morty, it’s only fitting to reminisce on a few words of wisdom from Rick Sanchez himself.
The pessimistic, yet realistic and surprisingly motivating scientist has an interesting world view. One that, if taken with a grain of salt, could potentially help you manage your finances in a more intelligent way.
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Here’s five lessons you can learn from the master of all science, to help you navigate the complex world that is finance:
#1 “Uncertainty is inherently unsustainable. Eventually, everything either is or isn’t.”
When it comes to your finances, something we can all learn from Rick Sanchez is that ambivalence has no place in making financial decisions.
Before you sign up for a credit card, get a personal loan or apply for in-store finance, you need to make sure that you are aware of all terms and conditions.
The best place to start is to make sure you read the following documents. They may seem boring, but they’re crucial to ensure you do not have any uncertainty as to what you’re signing up for.
- Product Disclosure Statement (PDS); a document, or group of documents, that a financial services provider must provide to you when they offer a financial product. The PDS includes fees, costs, some of the risks and benefits associated with the financial product, details about the company providing the product, and some tax information.
- Key Facts and Figures Sheet; a document that outlines repayment terms, interest rates, promotions, fees and charges associated with taking out a loan or a credit card. This document is often not advertised clearly on lender websites, so be sure to search specifically for this before you make your decision.
If you don’t read these documents you won’t end up in time prison, but you might end up in debt.
#2 “Don’t pay for cool stuff with your soul. Pay for it with money. You know, like how every other store in the world works?”
In the financial world, there really is no such thing as a free lunch. If you’re not paying for the product with money at the time, you may pay in another way later on.
A general rule to follow when comparing financial products is that if it sounds too good to be true, it probably is.
Interest-free credit for example, is not interest free forever. These financial products are often interest free for a short period of time, and at the end of this promotional period, often revert to a high interest rate. If you’re unable to clear the debt during this interest-free period, you can incur a much higher rate than other products with no interest-free period.
Similarly, refinancing your home loan can save you money if you switch to a lower rate, but not if you extend your loan term. Let’s say you’re already 15 years into your mortgage, switching to a different lender with a lower rate will only save you money if your loan term remains the same as originally agreed. If, however, you switch to a new loan term with a lower rate that contractually binds you to another 25-year loan term, you may end up paying thousands more in interest than you would by sticking to your current loan term with a slightly higher rate.
#3 What, so everyone’s supposed to sleep every single night now? You realise that nighttime makes up half of all time?”
This learning is less about ditching sleep in favour of nighttime adventures, and more about how you can manage your finances from anywhere at any time.
According to Roy Morgan’s latest customer satisfaction research, nearly half of Australians use mobile banking in an average four-week period, whilst only one in five of Australians use bank branches to conduct their banking.
Banking apps and online banking mean you can manage your finances on the go, and smart ATMs from major banks allow you to make a deposit at any time of the day or night.
A godsend for shift workers, full time workers and anyone who doesn’t want to spend their day lining up for a teller, innovative fintech is now offered by most financial institutions in Australia.
If you’re not on the digital banking bandwagon, it might be time to reconsider how you’re spending the 24 hours you get each day, and whether you can increase your productivity by managing your finances at night.
#4 “Well, scientifically traditions are an idiot thing”
Australia’s first neobank has launched, open banking is on the horizon, and online-only banks are popping up left right and centre. The digitalisation of banking is disrupting the traditional ways of managing your finances, and as competition increases, so does your ability to get the best deal.
Currently, according to APRA, the big four banks are dominating the loans market, with the Commonwealth Bank leading the way.
However, if you take a look at the lowest rates for November across all financial product sectors, the big four do not feature once.
If you’re looking for the lowest interest rate on a loan, or the highest interest rate on a savings account, could now be the time to stop the Australian tradition of opting for a big four bank in favour of a smaller, more innovative lender?
#5 “I know that new situations can be intimidating. You’re looking around and it’s all scary and different, but, you know, m-meeting them head-on, charging right into them like a bull… that’s how we grow as people.”
The fifth and final lesson we can learn from the alcoholic genius that is Rick Sanchez, is that even if you don’t understand finance, the only way you’re going to grow as a person is to address your financial problems by facing up to them.
This is particularly relevant to those of us who may be a little apathetic about our financial situation. This “she’ll be right” mentality can be dangerous, especially if you’re in debt.
Ignoring your credit card statement, making the minimum repayment every month, or paying off debt by borrowing more money can end up trapping you in a debt cycle that is hard to escape.
If you feel like you’re in a pickle with your finances, and not the Pickle Rick kind, the best thing to do is to speak to a broker or get professional advice from a financial advisor.