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Debt Management and Family Crisis American Version of Debt Management
The American version of debt management seems to be; buy now, pay later, or worry about it later. “Instant gratification” has replaced “save for a rainy day” as the watch-word for Americans regarding their money.
Most American households do not have savings. They simply live paycheck to paycheck. They pay what has to be paid THIS WEEK, balance the checkbook, and decide how to blow what's left....and those ARE the responsible ones.
The irresponsible ones get a paycheck, do what they want to do, buy what they want to buy, and if there's anything left, they use it to pay the bill that is most pressing at the moment. Neither method could be called responsible debt management or sound financial planning by any stretch of the imagination.
Saving money is rapidly becoming a lost art form in America. In a recent study, only 41% of all American households actually had savings accounts, but 75% of all American households are carrying substantial debt.
This is certainly not the kind of money management that our grandparents would have approved of. There was a time when being in debt was a shameful thing but that idea went the way of the Model A, apparently.
Declaring bankruptcy became so easy, and so many people were taking advantage of it, that Congress finally had to make it more difficult. Debt management businesses are thriving, and you can't turn on the TV without seeing an advertisement for debt consolidation loans.
Americans need to return to the sound financial practices of the past, like save first. American mothers and fathers need to instill the basics of debt management into their young ones. American high schools need to require that a course in financial planning and debt management be successfully completed before a diploma is awarded.
See Also:
Getting Control of Debt Management
| Free vs Paid Debt Management Services Debt Management and Credit Scores
There is so much information (and misinformation) out on the net about credit scores.
Some people are under the impression that a credit score and a credit report are one and the same thing. That is wrong. They are two entirely different things.
The credit SCORE is based upon the credit REPORT. Credit scoring is just a simplified method of identifying good credit risks from poor credit risks. You can bet that lenders will get a credit SCORE before they proceed with the loan process but before a loan process goes very far, the lender will get full credit reports and from all three of the credit reporting agencies.
The credit score is based only upon credit history. The things that determine a credit score are whether payments were made on time and in full as well as on other things that are contained in a full credit report like employment history and income level. Points are awarded for each of these things as well as many others.
You might say that the credit score is a snapshot of a credit report -- a summation, if you will, that gives lenders a good idea of whether an applicant is a good or bad credit risk.
Some people believe that if they stay out of debt and pay in cash as they go, they will have a good credit score and a good credit report, but that is just wrong. They will have no credit history, no credit score, and no credit report. All of these things are based upon credit -- payments of loans and debts. You must have been granted loans by banks, or you must have a credit card payment history, in order to have a credit score or a credit report.
The fastest (and least expensive way) of building credit history is to get a credit card, make charges, and then pay them off before any interest is added. |
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Debt Management - Getting the Priorities Straight
Debt Management and Collecting Your Debts
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| Online Debt Consolidation and Debt Management Services Easy Credit and Debt Management
Before credit cards came into existence (and, yes, there was a world without credit cards at one time) it was a lot more difficult for people to get in over their heads financially. It happened, of course, but not with nearly the frequency that it happens in the credit card laden world of today.
People really didn't have the ability in the form of a credit card to get so deeply in debt that they couldnt get out. Loans had to be approved by other living people. Credit histories were checked and employment was verified before credit was extended.
Credit cards have made getting credit very, very easy, and that easy credit is getting a lot of people into serious financial difficulty. If a person has a social security number, they can get a credit card. In fact, I'm not certain that even a social security number is necessary -- maybe just a mailing address works. A man in California got a credit card for his dog and used nine zeros as a social security number.
Having a credit card is not a badge of honor. It doesn't assure the world that a person is financially responsible and that they pay their debts on time and in full each month.
Managing debt means being financially responsible. We live in a world where instant gratification is the expected norm. See it, want it, buy it...with a credit card. The problem is that it wasn't bought; it was charged, and the bill will come due. Buy it now, worry about paying for it later seems to be the mantra of the nation today.
Credit cards are the vehicle that is used to drive into deep and unrelenting debt. That easy credit is the root cause of second, third, and final notices filling mailboxes, and it provides jobs for debt collectors who will be calling day and night. |
Related Topics: Easy Credit and Debt Management,
Debt Consolidation Loans-Yes or No, Responsible Debt Management
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