Before I was doing all this financial coaching stuff, I was never really concerned with what my credit score was. I didn't care what was on it, good or bad. If I tried to get a loan of some kind and was denied, it was no big deal. I'd just figure out another way of doing what I wanted to do.
But I have borrowed money plenty of times in my early years. I've had a mortgage, I've had a couple of credit cards, and a couple of car loans. I even financed a 50 foot section of chain link fence, a gate, and gutters on my house from Sears once. So don't think I'm that guy who has never had debt or loans and keeps telling you that credit is bad, never borrow money, because I've been there, and done that.
Credit vs Cash
So it was towards the end of last month I was thinking, what can credit buy you that cash can't? Now you would think that this would be an easy thought process, but it really wasn't. I mean, if you really think about it, when you are talking about material things (cars, homes, toys, etc...) and possibly trips, like vacations. Cash can buy all that, just as well as credit can. Can we always get what you want, when we want it with cash? No, not always. Depending on what we want and how much it cost, it may take awhile to save for it.
So what can Credit Buy that Cash Can't?
After thinking about it for awhile, I came up with four things that credit can buy you that cash can't, and its probably not what you'd ever think of.
1) Credit buys you a FICO score: There is no way to get a FICO (credit) score unless you use credit to get it. When we use cash, that doesn't get reported to the credit bureaus.
2) Credit buys you Instant Gratification: As mentioned above, we can't always get what we want, when we want it when we use cash. Sometimes we have to be patient when using cash. But if you look up the meaning of the root word 'gratify', it means, to afford pleasure to. And it is my belief that if you can afford it, you have no need for credit, but I'll give this one to credit anyway.
3) Credit buys you Risk: When we buy something on credit, we open the door to risk. We the chance of something greater happening to us that normally wouldn't when we use credit. Example: when you lose your job, how are you going to make the car payments, etc... When you use cash to buy things and you lose your job, you don't have worry about creditors coming to get your stuff.
4) Credit buys you Stress: Or should I say, more stress. As mentioned above, we have added stress when we are worried about someone coming to take away our stuff when life came along and smacked us. When we use cash, that stress never comes around. Yes, there is some stress when there is a job loss or something like that, but not as much when you know for a fact that your stuff is yours and not someone else's.
Well, those are the things that I came up with that credit can buy you that cash can't. If you can think of some other things, I'd sure love to read them. So let me know what you came up with.
Why I Do This
The reason I do this is to inspire and give hope to people. To make them think about their finances, whether they are young or old, so they can win financially.
If you find any of this information useful, please share it with others. You can also find more money news, facts and ideas, on myFacebook pages. I'd be grateful if you followed me. Thank you!
We've all heard it before that the rich people tend to rule over the poor people. That has been said for centuries. It was even said more strongly during our last recession and even as recent as our last presidential election. And in most respect, that is a true statement. Now, don't get me wrong. This blog post isn't going to be about bashing the rich. In fact, I think that most wealthy families and/or individuals are good people who are judged too harshly solely based on that they have some money. And before someone judges me and my family, for the record, we're not wealthy at all. I just happen to know some wealthy people. I know their character and their heart. And for them, and others like them, to be judged as a whole the way that they are these days... well, it's not really fair.
The Book of Proverbs
Where I'm coming from with all of this, is a piece of scripture from the book of Proverbs. Now before those of you who are not religious start rolling your eyes, get mad and stop reading, I ask that you continue to read and hear me out with an open mind. The scripture goes... "The rich rules over the poor, and the borrower is slave (or servant) to the lender"Proverbs 22:7. Now let's unpack and break this down for a bit. Let's take the first part, "The rich rules over the poor..." As we already said above, this is mostly a true statement. The wealthy are the ones who make just about all our rules, laws, and regulations we have to live by. And I'm sure you would all agree that no matter what government agency is made up to close the gaps between the classes in our culture, we will always have the poor among us. Now for the second half. And it's this half that I really want you to think about. "...and the borrower is slave (or servant) to the lender". Obviously this part is talking about borrowing money from something or someone. One of the definitions to the word "slave" in the Merriam-Webster dictionary is a person who is strongly influenced and controlled by something. I think we can all agree that this is a true definition. Because when we borrow money, especially from a financial institution, we are "strongly influenced and controlled by" the contract we sign before we're given the money. This is also true when we borrow money from family and friends. Our emotions are all wrapped in the process of paying them back, sometime even more so because they are family and/or friends. That is why those relationships are stressed or destroyed when the borrower can't pay what is owed.
The Take Away from this Scripture
What gets me about this scripture is that it doesn't matter who you are, how old you are, what business it is, what church it is, what school it is, what government it is, etc... this scripture is 100% true. When you borrow money, you are being ruled by someone, and in all reality, you are a slave to that debt until it is paid off in full. What do you think? Do you think this interpretation of Proverbs 22:7 is actuate?
Why I Do This
The reason I do this is to inspire and give hope to people. To make them think about their finances, whether they are young or old, so they can win financially. If you find any of this information useful, please share it with others. You can also find more money news, facts and ideas, on my Facebook pages. I'd be grateful if you followed me. Thank you!
