Money Learning Checklist 3 – Credit

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Everyone knows what credit is, right?  It’s a happy word.  Credit, in its contextual sense, has a positive connotation.  Credit connotes having credibility, right?  That’s right, I’m credible – just ask me.  Everyone is credible in their own mind.

Americans love credit and credit cards.  I think some people believe that a credit card is a magic bridge to avarice.  Isn’t it fun to go into a store and not have to look at prices, fill up your cart, and walk out with all that stuff?  Everyone wants to look great and be surrounded with nice things.  But, the big façade associated with credit cards is that once that card is swiped, you have traded your soul.  Your soul is traded for the debt that you just created.

To me, debt is a four-letter word.  Oh, wait it is a four-letter word, but I mean the bad kind.  As I took a break from writing this piece, I saw a political cartoon in the newspaper that expressed my sentiments about credit.  It’s a large image of It, staring down at a person with a caption of “A national horror: DEBT”.  “It” is the star of that gruesome clown movie that continues to break ticket sale records.  I burst into laughter when I saw the trailer.  This is what constitutes entertainment?

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Money Learning Checklist 2 – Spending

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What a time to be writing about spending.  As I watched Hurricane Irma wind its way toward Florida, I can’t wrap my mind around the amount of emotional and financial devastation.  This would be a good time to think about an emergency fund that is funded slightly or not at all.  Yes, I know insurance covers some costs and FEMA comes through, I lived through Hurricane Sandy.  But I saw a Facebook post the other day from a Florida resident explaining that she wasn’t evacuating because she had no funds to leave.  I remember the same from New Orleans residents when Hurricane Katrina blew through Louisiana.  I can’t imagine not having an emergency fund to escape a dire situation, but, according to the stats, it’s a common position.

Let’s get this straight: Less spending = more emergency fund.

I request your fixation on the next two suggestions.

Entertain the “Enough” mentality in your life

If you reach the Enough mentality, mark the day on the calendar.  It’s a worthy milestone of your financial maturity.  Too many people don’t know what ‘enough’ means.  Marketers love these people and are happy to indulge your lack of ‘enough’.  ‘Enough’ means that you have reached a saturation point with your personal merchandise, take-out dependence, or whatever it is your bank account is hemorrhaging from.  It means that you’re happy with what you have and don’t need to cure boredom by spending endlessly.  Start feeling OK with what you have.  You don’t need any more clothes, furniture, shoes, wall hangings, candles, tablets, monthly subscriptions, sunglasses, makeup, cologne, curtains, or car accessories.  Live with what you have and realize that you can live without, too.

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Check out my Facebook page

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If you haven’t visited my Facebook page, you are missing out on some great money information.  I pull a variety of interesting money articles from all over the World Wide Web.

Check it out and Follow or Like!

Thoughts on the money Facebook page

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financial control

Exercise Your Financial Control

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In Stumbling Upon Happiness, author Daniel Gilbert explains a few fundamental characteristics of how the human brain works. He completes the sentence The human being is the only animal that ______, by filling in “thinks about the future.” He indicates that the brain is an anticipation machine and its ability to “make” the future is the most important thing it does. The skill of expecting something next is a uniquely human tool.
In tandem with the faculty of expectation, our minds are built to exercise control.
This was a revealing point for me, and certainly explains a lot. My brain is wired to be in control, and that’s that. I don’t even like riding in the passenger seat. Not controlling the speed of the car and the braking gets my stress juices flowing. Even worse, if it’s not my car, I don’t decide when I can leave. There’s the anticipation factor working its way in. Not only do I struggle with not driving, I am thinking about when the drive home will occur.
I also excel as a project manager. I like to call the shots and make decisions, directing adjustments along the way, and finding solutions.

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Meet Your Life Partner – Your Credit Score

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When you reach adulthood, you automatically get a new life partner.  Tall, dark, and handsome? Or, tall, blonde, and beautiful?  Keep dreaming, you won’t meet this one on Tinder.  This alter ego determines where you work, your standard of living, and what you can buy.  Basically, it runs your life. It hides behind your couch, if it allows you to have one, and can edge you out of your bed.  This friend shows up uninvited to cramp your style in countless ways.

Meet your credit score, your ethereal mate.  Just about every area of your life is impacted by this relationship.  And talk about being pushed around.  You can get much more flexibility out of a human.

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FINANCIAL HAPPINESS

financial satisfaction

I like reading the latest financial tips as much as the next person, but sometimes it’s redundant.  I know how to budget, save, and spend responsibly.  I don’t need a daily article telling me to do all those things, I can write a book on that.  (Oh wait, I did.)  Anyways, instead of dwelling on the next money crisis or offering another seven-point list on how to side-hustle, let’s celebrate some financial success.

 

Yes, things are tough when you’re young because, like most, you may have started with zero, or negative zero, if you had student loans. After some time goes by, the small actions count.  Little by little, the emergency fund gets funded, the necessities are bought, then the pleasures can follow.  One day, going to work may not feel so bad and your life won’t depend on your next paycheck.  It’s when you realize that you have money left over from your last paycheck.  You get a few raises and promotions and there’s finally more money than month with a small checking account buildup.  The money gods have smiled on you and you can start moving on to bigger and better.  This is what’s known as financial satisfaction.

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Your Financial Neighborhood

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What zip code is your financial neighborhood?  90210, the world of glamour and wealth, or 05501*, where the lowest reported taxable income is earned?

You live in a physical neighborhood with houses, driveways, and landscape.  It’s the backdrop of your life, where you sleep, keep your belongings, and invite your friends to.  But you also have a financial neighborhood.  This is also the backdrop of your life and how you design your standard of living.  Is your scenery opulent or sparse, or somewhere in the middle?

Figuratively speaking, your financial neighborhood is where you live in monetary terms.  There is a range of wealth within your financial neighborhood where some are on the high end and some are on the low end.  You are most likely aware of the level or lack of wealth in your financial neighborhood and identify your space within the spectrum.  As expected, the essence of your financial familiarity is learned from family.  On a subliminal level, the comfort level associated with those surroundings is deeply embedded in your mind. There’s no doubt it’s safe and predictable.

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Self-Evaluating Your Financial Behavior, Part II

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THIS POST MAY CONTAIN AFFILIATE LINKS.  SEE MY FULL DISCLOSURE FOR DETAILS.

 

This is a continuation on evaluating your financial behavior.  See Part I for identifying your goals, gathering your financial records, and getting real with money attitudes.

The backdrop for each step describes what a financial planner would direct you to do; the self-study action is included.

These last three points put the plan in motion.

4)Develop and Present a Recommendation

Financial Planner Action: Communicate a plan, make recommendations, and identify alternative options.  At this phase, the financial professional may sense resistance and ambivalence from their client.  Financial psychology* suggests engaging the client in dialogue that fosters the client’s positive changes.  This method of conversing provokes the client to recap their goals and why the goals are important.  Instead of being directed by an outsider, which is typically not well-received, the client feels a sense of empowerment and autonomy.

Self-Evaluation:  This is where you decide what changes you’re going to make and is most likely the part where your well-intentioned launch could lie like an unhatched egg.  You’ve reached this segment, but your avoidance may kick on.  Vacuuming dust bunnies and pulling weeds might look exciting compared to figuring out how to manage your wallet.  If you sense hesitancy, acknowledge it, but don’t judge yourself.  Identify your resistance and figure out ways around it.  You should be sitting on that egg like a stubborn hen, not avoiding it.

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