All your life you've been told by financial guru's, banks, friends and even parents to try and build your credit. They tell you that "Great credit is just so important," or "if you don't have good credit you won't qualify for this."
Here's what I have to say about credit scores... Forget about it. You wanna know why? It's because your Credit Score Doesn't Matter. Let me correct myself... It shouldn't matter. Now I know I'm treading into new territories here but I think it's important for you to hear this. Your credit score doesn't matter, unless:
A. Your buying a house soon
or
B. Your financially illiterate or what I like to say "Dumb with Money"
Think about this for a minute; what do you need a good credit score for? The only reason you need a good credit score is to get a loan and you should avoid that like the plague k. Before you even think about getting a loan ask yourself if you really need it or can you get by with a cheaper version of the same thing? You know, something you can actually afford? Say to yourself, self, do I really need this? Now keep in mind the only things you really need are God, food, water, shelter, clothing and a car... and some would argue that you really don't even need a car but I think you should have one because you still need a way to get to your job and having a job is a good thing.
If you have bad credit don't fall prey to those crazy commercials that try to lure you into buying something, avoid them. If you have bad credit the last thing you need is to borrow money. Instead save your money. Save it until you have enough money to buy whatever it is you think you need. Because if you don't have enough money for it, generally speaking... you don't need it. And if you're going to try an argue the fact that it's going to take you several months to save up enough money, don't. You need to learn this lesson. It's called financial discipline.
Financial discipline happens when you learn to be content with what you have and only spend on things you need until you become 100% debt free. Then you can buy your toys.. but until then pay off your debt!
Now if you're planning on buying a house, yes, your credit score does matter because it determines what kind of interest rate you can get on your mortgage. Always put at least 20% down and only buy a house that you can afford EVEN IF you lose your job and could only make minimum wage. Let's face it, the only thing you can count on in this life is death and taxes.. your job is not guaranteed so just make sure you can still afford your house if you lose it.
Sunday, February 27, 2011
Friday, February 25, 2011
Today's money horror scope (true story)
The other day a friend had asked me if he could borrow some money to help pay his mortgage (true story). First off he just lost his job, his wife was pregnant with their second child and they didn't have enough food. So we helped him out, we bought him a few groceries and helped him fix a couple things around the house.
He thanked me and invited me over to watch some UFC that same night, but that's when it started....
That's when he opened up and started showing me all the cool stuff he recently purchased like a $200 watch, a diamond necklace for his wife, a new couch and a $500 dollar stroller from Europe. Which he admitted that he debated purchasing, but after he took it for a spin he said, "I just had to have it".
My heart sunk.
I couldn't believe someone would actually ask me to help them out with their mortgage payment when they could have easily done it themselves had they not purchased a bunch of dumb stuff. The nerve!
My goal for you is to help you become smart with money. If you have debt you need to subscribe because together we can help you become a non entitled citizen (living with no government support).
Are you financially illiterate, in other words "dumb with money"? Here's a quick test to find out how you are with money, just answer these few questions below:
First off, what's important to you?
I never have enough ___________? Fill in the blank.
Is your house/apartment full of stuff (toys, clothes, gadgets etc..)?
Do you live paycheck to paycheck?
Do you go out to eat more than 1 time a week?
Do you owe more on your house than what it's worth?
If you answered yes to any of these questions or if you filled in the blank, you just may be dumb with money. Your priorities may be a little screwed up (don't get mad at me) it's true. You tend to spend money on your wants instead of your needs. Do your children really need a room full of toys that they never play with? Do you really need a bedroom full of clothes? Do you go out to eat a few times a week but still have a car payment?
Quit spending money on yourself and pay off the money you owe first. k
The toys can come later.
He thanked me and invited me over to watch some UFC that same night, but that's when it started....
That's when he opened up and started showing me all the cool stuff he recently purchased like a $200 watch, a diamond necklace for his wife, a new couch and a $500 dollar stroller from Europe. Which he admitted that he debated purchasing, but after he took it for a spin he said, "I just had to have it".
My heart sunk.
I couldn't believe someone would actually ask me to help them out with their mortgage payment when they could have easily done it themselves had they not purchased a bunch of dumb stuff. The nerve!
My goal for you is to help you become smart with money. If you have debt you need to subscribe because together we can help you become a non entitled citizen (living with no government support).
Are you financially illiterate, in other words "dumb with money"? Here's a quick test to find out how you are with money, just answer these few questions below:
First off, what's important to you?
I never have enough ___________? Fill in the blank.
Is your house/apartment full of stuff (toys, clothes, gadgets etc..)?
Do you live paycheck to paycheck?
Do you go out to eat more than 1 time a week?
Do you owe more on your house than what it's worth?
If you answered yes to any of these questions or if you filled in the blank, you just may be dumb with money. Your priorities may be a little screwed up (don't get mad at me) it's true. You tend to spend money on your wants instead of your needs. Do your children really need a room full of toys that they never play with? Do you really need a bedroom full of clothes? Do you go out to eat a few times a week but still have a car payment?
Quit spending money on yourself and pay off the money you owe first. k
The toys can come later.
Wednesday, February 23, 2011
Three simple ways to get us out of this recession
Step One: Stop trying to keep up with the Jones's! If you haven't figured it out already they're already way ahead of you. There's always going to be someone with more money, more toys, a nicer car and a bigger house. Stop chasing after these things. A few days or weeks down the road and that "something" that you really wanted and went out and bought, well..... it just doesn't have that luster and appeal it used to. So now that it's worn off, the next thing you know you're off trying to buy the next coolest thing... Guess what folks? It's only going to leave you broke in the end! Instead be content with what you have! (Exclamation point added for extra emphasis)
Step Two: If you don't have enough money for it, don't buy it. It's a little lesson in economics. Far too often when people get stuck in step one, they fall trap to step two. People are willing to make payments on cars, tv's, furniture, toys, vacations and the list goes on and on. It's dumb. Really, really dumb. Don't do it. Seriously... don't do it. If you don't have the cash for something you really want, don't buy it (A house may be an exception)*. Don't put stuff on credit cards and if you do... pay them off right away! Otherwise that sale item you just bought, well it's not going to be that great of a deal if you're paying 9% interest on it. You need to separate your needs from your wants. That 50" flat screen TV is not a need. In fact (And this may just BLOW your mind) Cable T.V. is not a need either.
Step Three: Work hard and Save. Now I know this is going to throw a lot of people for a loop so I'll break it down. Get a job, show up for work, get paid, give, buy and pay for what you need and save the rest. Not sure if you knew this or not but banks still do have savings accounts. That's the money you can use to buy stuff you want when you get enough money. Make sense right? I hope so!
Now if we all just follow these three simple steps (including the government), we should all be ok.
It's just plain ole common sense folks.
*Only buy a house that you can afford and think about the future. Say to yourself, "Self, can I afford this house if I or my wife lose our jobs? Or here's another question you can ask yourself. "Self, can I afford this monthly payment on top of all the other expenses I have (utilities, taxes, food, maintenance)? Think about these things before you buy a house. If you don't, you may just end up in foreclosure.
Step Two: If you don't have enough money for it, don't buy it. It's a little lesson in economics. Far too often when people get stuck in step one, they fall trap to step two. People are willing to make payments on cars, tv's, furniture, toys, vacations and the list goes on and on. It's dumb. Really, really dumb. Don't do it. Seriously... don't do it. If you don't have the cash for something you really want, don't buy it (A house may be an exception)*. Don't put stuff on credit cards and if you do... pay them off right away! Otherwise that sale item you just bought, well it's not going to be that great of a deal if you're paying 9% interest on it. You need to separate your needs from your wants. That 50" flat screen TV is not a need. In fact (And this may just BLOW your mind) Cable T.V. is not a need either.
Step Three: Work hard and Save. Now I know this is going to throw a lot of people for a loop so I'll break it down. Get a job, show up for work, get paid, give, buy and pay for what you need and save the rest. Not sure if you knew this or not but banks still do have savings accounts. That's the money you can use to buy stuff you want when you get enough money. Make sense right? I hope so!
Now if we all just follow these three simple steps (including the government), we should all be ok.
It's just plain ole common sense folks.
*Only buy a house that you can afford and think about the future. Say to yourself, "Self, can I afford this house if I or my wife lose our jobs? Or here's another question you can ask yourself. "Self, can I afford this monthly payment on top of all the other expenses I have (utilities, taxes, food, maintenance)? Think about these things before you buy a house. If you don't, you may just end up in foreclosure.
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