A good or excellent credit history and/or score will give great stability with your business and personal endeavors. Much of what we purchase is built on credit.
The rich ruleth over the poor, and the borrower is servant to the lender. Proverbs 22:7
This post comes from Maryalene LaPonsie at partner site Money Talks News.
OK, readers: I’d like to have a heart to heart here.
Christmas is fast approaching, and that means money is going to start flying out of your pocket at breakneck speed. It doesn’t matter how much we talk about the spirit of the season being what really counts. The reality is the holidays mean paying for presents, parties and extra food. If you are already struggling under a mountain of debt, it only gets worse. It may be tempting to think you’ll charge one last holiday and buckle down in January, but that is the mindset that keeps you in debt. Trust me. I may be debt free and have an emergency fund now, but I could tell you about the Christmas we searched for a tree farm that took checks because there was no money in the bank and the credit cards were maxed out. What changed? It wasn’t our income, that’s for sure. It was our mindset. Unless you change yours, here are five reasons you’ll never get out of debt.
1. You don’t have a budget or track your spending
Some people are number geeks and could spend all day slicing and dicing their budget numbers. You know who you are. For everyone else, budgets can be boring, restricting, dumb…pick your favorite adjective. However, if you don’t know where your money is going or even how much you make monthly (believe it or not, some people don’t), you’ll never get out of debt. You won’t know if you are able to pay off the groceries you are charging or if you can put money into savings. Every time you open your bank account, it will be a crapshoot whether there is money there. Tracking your expenses used to entail pencils, spreadsheets and agony. Now you can simply use a service like that provided by our partner, Power Wallet, to do everything for you effortlessly and free. No more excuses.
2. You shop for fun
Once spending money becomes a form of recreation, you can probably kiss your savings goodbye. Unless you have a large amount of disposable income, chances are you can’t afford to be spending indiscriminately. And that’s what people do when they shop for fun; they spend on a whim. They see something they want, and they buy it with no thought to whether they need it or can afford it. If you pass your time wandering aimlessly at the mall or surfing retailers online, don’t be surprised if your savings account balance hovers around the single digits while your credit card balance climbs to its ceiling.
3. You surround yourself with the wrong people
Likewise, you will never get ahead if you are running with a crowd that is constantly trying to one up one another. Keeping up with the Joneses is not good for your pocketbook. I don’t want you to ditch your good friends, but I do think it’s smart to consider whether you need to be spending time with casual acquaintances who are more interested in keeping up appearances than in keeping up your friendship. Instead, look for likeminded people who appreciate you for who you are even if you can’t afford to be dining at that swanky new restaurant every week.
4. You have an “as soon as…” mentality
- As soon as the holidays are done, I’ll write out a budget.
- As soon as I get a better paying job, I’ll start paying down our debt.
- As soon as I finish buying the last of the Disney movies for the kids, I’ll stop spending.
The timing will never be perfect. Smart money management is like dieting and exercise. You will always find a reason to put it off. Waiting for the stars to align is a surefire way to remain in debt indefinitely.
5. You have a character flaw
Let’s get right down to it; you may be in debt and you may stay in debt because you are simply too lazy, too weak or too self-indulgent.
Ouch.
Remember, I’ve been there. I’m not judging; I’m looking in the mirror. We want to think our debt is the result of forces outside ourselves – the hospital stay, the lousy economy, the housing market. However, at the end of the day, we need to take responsibility for our own actions. I am talking about us middleclass families who live like we are upperclass families even though our paychecks can’t support the lifestyle. We need to acknowledge our part in our debt. The fact is maybe, just maybe, if we lived below our means and saved for a rainy day, we would be able to weather life’s storms a little better.
For me, my character flaws were selfindulgence and weakness. I had a hard time saying no to myself when I could so easily justify purchases with the idea that “everyone uses credit cards.” By the time I hit that fateful year in which I had no money and no tree a week before Christmas, I had dug myself a deep hole, one that would take nearly 10 years to climb out of.
But today, I have money in the bank and don’t freak out when the van makes a strange noise because I know I can pay for a repair. It’s a wonderful feeling. I love living this way, and I know you will too.