If you are paying by cash…straight up…than you may not necessarily need good credit.
Cash is KING!
If you can live a life of “cash only” and not be dependent upon credit cards and avoid purchasing everything on credit and have the discipline to save up for things you want to buy… use cash only…then might not need good credit. If you can pay for your car outright, pay for your home outright or at least have a large down payment, you may be one of few in our recent generation that doesn’t need good credit because you don’t need it. You pay for things by cash.
My grandparent’s generation never had credit cards. They saved their money when they wanted to buy something. If they could not afford it…they didn’t buy it. It was that simple. Maybe this is why they were called the greatest generation. They lived in their means, planned things out, and didn’t go overboard.
Unfortunately…from the boomers and beyond we have successfully brainwashed ourselves to thinking we must buy everything on a credit card. We cannot wait and save for something we want. “I want it and I want it now daddy!” the girl cried in Charlie in the Chocolate Factory. Are we this kid? Is this our generation?
Have we been taught not to budget, not to save, not to appreciate what we truly have? We can no longer wait and save up for something. We need it now. The problem with this is it leads us down the rabbit hole. Our lives grow desperate for wanting the next must have item. We are consumed with debt and the hole gets deeper with each passing purchase. Is it really worth it? Can we strive to live like our grandparents did?
I encourage all of us…including myself…to pay by cash and get off this addiction of using credit cards.
The author David Bach from the #1 bestselling author of The Automatic Millionaire has some awesome suggestions on how to save. Also, I would recommend his other book… Start Late, Finish Rich….for anyone who is looking for ways to invest, save money, and enjoy life, even if you are starting late…or starting over. I highly recommend his books.
***If you must use a credit card or some form of credit...Than absolutely you should have good credit because otherwise you will get hit with heavy interest rates and pay much more compared with someone who has an excellent credit rating.
Someone with bad credit will pay A LOT more than someone who has a high credit score.
See posting for details on How Much does a Low FICO Score Cost You? http://gettingbackmycredit.blogspot.com/2010/09/how-much-does-low-fico-score-cost-you.html
In addition to reading David Bach's books I would also highly recommend reading Robert Kiyosaki's books. You have to read Rich Dad Poor Dad if you haven't already. But then you really should read his other books. He makes such excellent points on increasing our financial IQ. He is such an inspiration! Seriously, read his books! We all need to keep learning, especially since our schools never really covered money. Keep reading, keep learning ways to increase your financial IQ and your business skill sets. Learn to solve life's situations and become empowered.
ReplyDeleteIf you are looking to pay down debt and get back on track with things you might also check out...
ReplyDelete(Gail Vaz-Oxlade)
Debt-Free Forever – by Gail Vaz-Oxlade
One of my recent books that I am reading. If you have not seen her show on CNBC “Until Death Do Us Part” you should check out her TV show. Great stuff. Any couple out there that “thinks they are on the same page” or thinks their debt is not an issue… *****Please read Gail Vaz-Oxlade’s book (see below) and watch her show. I am so concerned that we are all headed not only to double dipping into the recession but I think we might be ready to lick the bowl clean. I really don’t want to see that! Let's get smarter and make it happen!