On Wednesday I will be a guest on #CreditChat with @Experian on the subject of “Financial Tips I Would Give My Younger Self”. This is something that I think about a lot and a subject I am passionate about. As many of you know, 17 years ago I was a single mom, $200,000 in debt making $10,000 a year. It became so bad that I ultimately filed for bankruptcy.
On a daily basis, when it comes to my finances, I have two choices: to live in the past and all of the bad choices I made or live in the future and learn & teach what I have learned so that no one else has to make the same mistakes. Most days I have chosen to do the latter. This is why I love sharing what I like to call “What I Know for Certain”. There are so many things that I have learned about money and about life in the last 17 years that I always wish I could hop in a time machine and tell my younger self. But since that isn’t possible, I have chosen to learn and to pass on what I know for certain to anyone who will listen. I would like to share a few with you today as a preview of the chat on Wednesday.
Money is not infinite nor guaranteed – I never personally had to see my parents go through a down time with their finances. They did, but it was when they first married and were just getting started. They always had great steady jobs and always handled their money properly – by giving 10%, saving at least 10% (usually more) and living on what was left. They never went into debt for anything. Because of this awesome example that I had, I believed that life would be perfect as long as I did what I was supposed to. The problem was I didn’t know what to do.
What I know for certain is that money is not infinite (always there and available no matter how much you need) nor is it guaranteed. You never know what life will bring you. I believe that my parents always did well because of the choices they made and the preparations they made in case something didn’t go as planned. When something came up, it was just a slight inconvenience instead of a total melt down like it was for me. I wasn’t as prepared for those moments when there was a job loss or an emergency. Instead I had mortgaged my future by having debt; therefore, making it much harder for me when something happened. I actually had better opportunities than my parents did, but I didn’t handle them the same way. Therefore my results were much worse.
Debt isn’t a given – Today young people are being told that you must have a credit score in order to exist and the only way to get one is by going into debt. They are also told that student loans and car loans are “good” debt when the reality is no debt is good. Debt is a burden, makes you a prisoner to the people you owe the money to and mortgages your future earnings which, as mentioned above, are not guaranteed.
What I know for certain is that debt is not a given. You can live a perfectly good life without one ounce of debt. A great credit score is a great thing to have, but you can get one by never going one dollar into debt. You see, debt is owing more than you have; credit is a form of payment. You can use credit cards and pay them in full and have a stellar score. When I started my adult life, I tried to have everything my parents had worked 20 plus years to have. The only problem was the only way I could do it was with debt. This is why I ended up where I did. At first after I filed for bankruptcy, I didn’t use any form of credit for two reasons: one is my score was so bad I couldn’t get any and the other is I knew I needed to build my financial muscles before I tried again. Now I have 3 credit cards which I pay off every month. This along with cleaning up my past debts have taken my credit score from very poor to great. Debt is not a given.
Happiness can’t be bought – Everyone has that thing, maybe two things, that make them happier than anything else. I didn’t sit down in my early life and figure out what that was for me. I look back and see where I was just chasing happiness like a dog chasing his tail. And for me, it always came back to money. If I had taken the time to know what really made me smile, I could have focused my goals and finances in that direction.
Happiness can’t be bought but you can use money to reach your goals and dreams. This is what financial freedom is all about. On my computer’s wallpaper is a picture of my vision board (what financial freedom means to me) and on that board are grandchildren, children, travel and a lake house with boat. 2 of those items do not cost me a dime and two of those items are built into our financial goals. Happiness isn’t paid for with a credit card; it is brought on by reaching your goals and dreams whether personal or financial.
These are just a few of the many things that I would tell my younger self if I had that time machine I spoke about earlier. But since I don’t, all I can do is make it my passion to share with others so that they never have to go through what I went through and they can start on their goals and dreams 20 years before I did.
To purchase any of Debbi’s book visit Amazon.
To purchase The ABC’s of Personal Finance DIY Program, visit Debbi’s website.
Find Debbi on Facebook and Twitter to join in the conversation.