Posts Tagged ‘Money’

Bills, Loans, and Credit

Apr 22nd, 09 / 0 Comments

Now, I’m no credit expert, and if you’re looking for the really good (and more accurate) advice, you should talk to someone who is. However, I’ve been noticing something rather alarming lately: there are a lot of adults out there who seem to have no idea how not paying bills on time, in full, effects their credit, and they don’t know why they should care anyway. My hope in writing this is to get people to think more about credit, and willing to learn enough to make informed choices on their credit.

I’ve been told by a few people now not to worry about making loan payments in full, and to just pay enough to keep the lender off my back. Now, I don’t know if making less than minimum payments would actually do that, but I do know it would hurt my credit. When you don’t make the payments you say you’ll make, it hurts your credit, which is basically a measure of how much a  business can trust you to pay a bill or make a loan payment on time, and at the amount you agreed. If they can’t trust you to make the payments you say you will, they won’t do business with you.

This applies to other payments as well, such as rent, utility bills, and most similar types of bills. And when it comes to obtaining these services, the person you want to enter into an agreement with will check your credit to be sure they can trust you. Personally, I think this system is a little bit on the invasive side, and can harm people who have made one or two mistakes but on the whole did pretty well, but it’s what we have to work with unless it changes.

Now, another question is whether or not we really need credit. And the simple answer is that, unless you have a boatload of money, yes, you will most likely need credit, even if you never take out a loan to make a purchase outside of what you can afford in one lump sum. If you want a place to live, you’ll need credit to prove your willingness and ability to pay rent on time to your landlord, or to obtain the loan you need from a bank or credit union. You’ll also need it for utility companies, your cell phone bill, and possibly insurance companies (I’m not sure on this one). Assuming you do need good credit for insurance, this means you’ll need good credit to be able to drive in most states, even if you can afford a car outright with cash.

Certainly, there are other considerations as well. Some people get conned into making really bad agreements. Unfortunately, they do make the choice to enter into those agreements, and should honor them, while at the same time learning not to do so again. Naturally, an agreement that is illegal would be an exception to this, but I’m not sure if any poor agreements fall into illegal territory or not. Anyone who is in a poor agreement can attempt to renegotiate, or make a lot of noise about it to warn others, and both of these strategies may help, or they may not. I’d strongly suggest renegotiating first, as it’s nice to give people the benefit of the doubt and a chance to change, besides which, making some noise will possibly ruin chances of renegotiating. It can also help, but there’s no reason not to be civil first.

There’s also the possibility that a con artist has stolen someone’s identity, and ruined their credit for a quick buck. In this case, it’s not your fault, though you’ll want to learn some good security practices in the future. In the meantime, search out all legal recourse, and do the best you can. Unfortunately, I’m not sure if you can recover credit that’s been ruined by someone else any better than if you ruined it yourself. I believe it is easier, but still a long road, but I could be wrong. If I’m right, and it can’t be restored quickly, then this is one more reason I think the credit system would need reform or replacement.

Now, if you have bad or no credit, that doesn’t mean you absolutely won’t be able to do any of these things. It will put you at a disadvantage though, and you’ll likely have to search around for people willing to take a risk on you. You’ll also be in a bad position to try to haggle your way to a better deal, since you won’t have as many options. Still, I do know of some people who’ve overcome bad credit by finding alternative means to get what they need, and slowly built it back up to a point where they could use it to get what they want and need. Still, I’m hoping some people may read this so they can make an informed choice about how they handle their credit, rather than being surprised when they can’t get the things they want or need in building their life. However, when you consider that credit is a measure of how well you keep your agreements, it seems as though living honestly would lead to good credit. I certainly understand that bad things can happen, and cause people to have to make difficult financial choices though. Still, if you talk with all the companies involved, I think it’s fairly common to be able to make a deal in difficult times, which will hurt your credit considerably less than completely ignoring what you owe.

Related Posts:

Sponsored Link
Credit, Money

The Importance of Money

Apr 7th, 09 / 0 Comments

Lots of self-help people like to say that money isn’t everything, or money isn’t important. I can certainly see the point they’re making, and I’ll certainly agree that money isn’t everything. However, I will argue that money is important, and while it won’t guarantee anything, it will help a lot when it comes to happiness too.

The thing to remember is that, like many things, money is a tool, and how you use it will determine a lot. While money itself won’t make you happy, here are some things it will help provide that may help on the way to being happy: personal freedom, comfortable living, independence, and the ability to go out and do fun activities. Certainly, you don’t need money for any of these things, but it will make them all a lot easier to come by, as well as give you more options.

Of course, your goals will determine a lot, and you still need to have the right mindset. Sacrificing your life to earning money won’t make you any happier than you would be without the money, and might even make you worse off. But with the right balance between earning and enjoying yourself, it can be beneficial to getting the most out of life, and I think it’s positively silly when self-help people admonish us not to worry about the money.

Definitely think about other things, and certainly think about what you would do if you didn’t need to worry about money. Certainly even go ahead and do whatever you can of those things you would do without worrying about money. I completely agree with this part of the message. But saying it’s not important at all is ignoring the society we live in. Unless you can independently provide yourself with food, shelter, and the kind of entertainment you enjoy, you will need money at some point, and thinking about how to get it isn’t a bad thing. Obsessing over it might be harmful, such as looking to amass more and more money without understanding why you want it.

I’m currently in a low money situation, but I’m happy because I have enough to meet my needs, I have my friends, and I have my hobbies.

I also know I still want to earn more money, because it will be a way for me to improve my situation and that of those around me. I’m working on that part. Here are some reasons why having more money would be helpful:

-I could live on my own.
-I could help out friends who are having difficulty meeting their needs more often.
-I could afford some luxuries that I would enjoy, most specifically a Wii and a few games. This would also let me practice Super Smash Bros. Brawl more often and give me a chance to compete in any local tournament that comes up with a chance of winning.
-I wouldn’t have to watch my money when I want to go out with friends, and could just enjoy the night without thinking about every dollar I spend.

Now, none of these are necessary for my happiness. As I said, I’m quite happy as things are now. However, being able to do those things I listed would improve the quality of my life. In particular, living on my own would allow me to have guests whenever I wished, which makes it easier to have social gatherings, something I particularly enjoy. Once I’ve figured out a good way to earn money for myself, I can also help my friends do the same as well, and help get them to the point where they can meet all their needs.

The point is, I know what the money will actually do for me. It would provide me with more independence, a few luxuries I would like, the ability to help out more often, and fewer things to worry about. So I’m not just mindlessly seeking it, and I think that’s the trick. You need to know what money can do for you, and what you need to do for yourself in other ways. Money won’t give you confidence or self-esteem, at least not beyond a certain level. It won’t provide you with true friends, though it might give you the time and freedom to pursue more friendships.

Now, obviously, having money doesn’t ensure happiness, and lack of money doesn’t insure a lack of happiness. But I’m willing to bet that meeting your needs and living comfortably and independently is a good first step for anyone.

Related Posts:

Sponsored Link
Independence and Freedom