This April and May are big months for Star Wars fans like myself. Not only is May 4th the official day that we Jedi-wannabes will celebrate the initial 1977 premiere of George Lucas’ revolutionary Star Wars: Episode IV – A New Hope, but a few weeks ago came the release of the teaser trailer for Episode VIII – The Last Jedi, which I “forced” myself not to watch, for fear of dreaded spoilers. However, there’s no reason I can’t sit down, binge on the other movies in the franchise and study them for work and geeking-out purposes. Poor me, right?
Actually, there are a surprising amount of things that can be learned about personal finance by watching Star Wars. While I’m sure we’d all love to know just how much money would’ve gone into building both Death Stars and how much subsequent debt the Empire would be in after their destruction, there are some basic, more subtle money tips plotted throughout the franchise. So, (and I’m picturing Darth Vader’s theme song in my head now) here are 6 things that Star Wars taught me about money.
Be Careful Who You’re Dealing With
We’ll begin our study appropriately, with the original movie, A New Hope. Luke and Obi-Wan, with C-3PO and R2-D2 in tow, arrive at Mos Eisley Spaceport, seeking a transport to Princess Leia’s home planet of Alderaan. Some notable money talk plays out in this scene, such as the bartering between Obi-Wan, Luke, Han Solo, and Chewbacca about the price of their ticket to Alderaan, and Han’s encounter with Greedo the bounty hunter. However, there’s another principle within the quote above withstands the test of financial time. Be careful who you do business with. Not just because Jabba the Hut will be coming after you when you don’t pay your debts, but because there are a lot of villains out there posing as lenders and identity thieves trying to scam you out of your money.
Be wary when choosing a lender or creditor for a loan or credit product. Always do research to make sure your lender is legitimate before signing any contracts or providing them any information about you or your finances. Learning about identity theft is also a good method of preventing it from happening to you. Using your personal information, an identity thief can cause all kinds of damage to your finances, even take out loans in your name, stealing your money and ruining your credit in the process. If a lender asks for a deposit in advance, it’s a sure sign that they are a scam artist. In fact, demanding any amount of money before a loan or credit product is given to you is illegal. So, you must be cautious.
For more information on Loan Insurance Scams, read this.
Limit Your Careless Spending
Often considered the darkest film in the series, The Empire Strikes Back is all about learning lessons and evolving. While this line, said by Yoda during the beginnings of Luke’s Jedi training is obviously not about money, it brings to mind a rule that can be applied to it. Control your spending, or face the consequences of too much revolving debt. At first, Luke is the embodiment of any young, angsty, somewhat careless being, which is probably one of the reasons why so many people can relate to his character. Before his learning of the Jedi ways, he’s reckless and quick to jump to decisions.
What does this have to do with money, you might ask? Well, how many young apprentices out there, have had a parent or guardian tell them that buying something expensive and ultimately useless was a bad idea at some point in their lives? Then, how many of them, myself included, turned right around and said “you want the impossible” and bought it anyways? Many people, whether someone is trying to stop them or not, are frivolous with their money, wasting it on things they don’t really need. While it’s perfectly fine to spend money here and there on a fun trip or a gift for a loved one, spending it unwisely is something that we all need to watch out for if we want to have a nest egg for the future.
Owing Money All Over Town is a Bad Idea
As much as I like his character, Han Solo is the epitome of someone who doesn’t pay their debts and ends up suffering the consequences of his actions. He owes a large sum of money to one gangster, in particular, Jabba the Hutt, the plot-point of which is first mentioned in A New Hope and comes to a conclusion in Return of the Jedi. Needless to say, Solo, loveable as he is, never really learns from his mistakes, which get him into further shenanigans at the halfway point of Episode VII – The Force Awakens.
While in real life, a record of debt problems might not get you frozen in carbonite, it’s a strong possibility that your assets could end up frozen or repossessed after a defaulted loan, should your lender feel it necessary to take action against you. Even if you don’t have any loans to pay off, a sizeable credit card bill that you can’t afford might also turn into a big problem. Not only will you continue to accumulate debt because of interest charges, but if you don’t make your payments, you might start to get a few unwanted calls from a collection agency. Enter Boba Fett and Greedo, who come to collect their bounty from your bank account-y. From that point on, you could be subject to wage garnishment, meaning any money you’re making from that point on will go towards paying your debt, rather than into your own pocket.
Want to know what happens when you’re in Loan Default? Click here.
Watch Out For High-Interest Credit Cards
The Phantom Menace lays the groundwork for some interesting notions about personal finance, being that a portion of the movie takes place on the planet Tatooine, where we first met Luke Skywalker in A New Hope. Tatooine revolves around a bartering system. Its residents must trade, buy, and sell to get by in the desolate, desert wasteland. While bargaining for a better price with local vendors is in itself a good money issue, the quote itself made me think of another. When Qui-Gon Jinn is negotiating with Watto, Anakin Skywalker’s slave owner, he brings up the idea of paying in “republic dataries”. Republic credits, while not totally explained throughout the movies, seem to work much like a prepaid credit card. You have a certain amount of non-physical money that the Republic will give you in credit to buy things. This idea then made me think of credit cards and another basic rule of financial know-how, use your credit cards responsibly, especially rewards cards that come with enticing incentive to spend more.
Depending on what you’re buying, using a credit card for every purchase can often lead to consumer debt problems. Being that credit card bills don’t have to be paid in full or immediately, it can be tempting to just pay the minimum balance from month to month. However, credit cards come with an interest rate known as “retail interest,” which gets tacked onto the bill whenever a user fails to pay the full balance. The rates involved with rewards cards can be particularly high, 19.99% and up for the more expensive ones. So, if you’re using a credit card of any kind, it’s important, though your bank account might suffer for it, to pay your bills on time and in full, because the consequences of carrying around too much debt are definitely worse than a depleted bank account. Then, for smaller purchases, paying with cash or your debit card will probably work out in your favor.
Save Every Penny and Sell Anything You Don’t Use
There’s a scene in The Force Awakens that came to mind when I was searching the series for money matters. Our new protagonist, Rey has just come from scavenging parts of crashed Star Destroyer on the planet Jakku. She does this not for money, but out of pure necessity. No parts = no food. While the cheapskate salesman, Unkar Plutt only gives her one-quarter portion of what appears to be green bread, this kind of bartering boils down to one of the most simple principles of personal finance, save every penny and sell anything that you don’t use.
Especially when you’re living on your own, budgeting and saving become essential tools in learning to get by. While setting aside your spare change on a regular basis might not seem like an efficient way to save money at first, you’ll feel better when the jar is full and you can deposit it into your bank account for the future. Same thing goes for selling items you no longer use. Like with Rey’s predicament, you’ll likely never get back the money or time that you spent on the item in the first place, but when being away from home straightens out your priorities, you’ll probably be happy getting anything you can. Check out some used goods websites, sell some of the things that you don’t need, then store the earnings in a savings account with your spare change. You won’t regret selling those items when you see your balance rise.
Moving out? Take a look at this other article for a bit of advice on the budget you need.
Keep All Your Financial Information Updated
The latest film in the franchise, Rogue One shows us the Death Star in the final stages of its building. Little do the urchins of the Empire know, one of their supposed subordinates, Galen Urso, father of the protagonist, Jyn Urso, has added a fatal flaw within the battle station’s inner workings. Much to the Empire’s demise, the Rebel fleet discovers it and uses it to blast the Death Star into oblivion at the end of A New Hope. While not many serious Star Wars fans would try to give the Empire any advice, you have to admit, a little careful inspection and updating of their systems might have saved them a lot of lives, time, and money. OK, so the station’s building planner, Orson Krennic probably didn’t need to take out an astronomical loan to finance the construction of the Death Star. However, when you apply the context of the situation to that of borrowing and spending money, some interesting thoughts come to mind.
When you’re applying for loans, one of the best things you can do to make the application process run smoothly is to have all your financial and personal information in order, updated, and ready for your lender’s inspection. While a bank will already have most of your info on-hand, other kinds of lenders won’t. Actually, a show of financial disorganization on your part could make them think you’re an irresponsible consumer and lead to your application being rejected. The same goes for spending a large sum of money on something that could only lead to problems in the months to come. For example, financing a new car without considering all the other expenses it will incur, such as the cost of gas, insurance, and interest charges. With a used car, it’s extremely important to check the vehicle’s history, just in case, anything should end up going wrong. You should always make sure to get the car inspected for any repairs that might need to be done. The same goes for your home. When you’re buying a new house, it’s important to hire a licensed home inspector, ask them about everything that might go wrong with the house in the event of a flood, fire, or another home emergency. Once you’re moved in, update and fix anything that needs fixing before any serious issues fall on your shoulders.
Always seek the counselling of a professional before making any rash financial decisions. If you’re unsure of the issues and problems that come with anything related to loans, credit, or money in general, it’s best not to try and tackle them alone. There are professional financial advisors in the galaxy that will give you the advice that you need. “Trust your instincts,” and “may the force be with you… always.”
