Encouraging Debt
By Suzie Shannon
Most of us don't talk about money, finances, credit, debt....Young people
especially go into the real world blind about these issues. They have had it
easy or difficult growing up financially. Some kids use their parents credit
cards or are even issued one. Some don't have anything above the necessities.
Then some "EARN" an allowance and are taught to spend conservatively.
I think all of us have a responsibility to steer them in the right direction.
It is necessary to establish credit. Choose, for example a reputable credit
card company. Often this can be obtained through the credit union or bank where
an account has been active. Carefully read all of the disclosure. Pay close
attention to the interest, grace periods and penalties. Most importantly, spend
the way you always have and absolutely no more. Charge one or two of the usual
expenses and be sure to pay the bill on time. This creates the needed credit
and good score to buy bigger things.
Credit is a good thing in some ways. But as we all know it is more often a
problem. One problem is people lose control of spending. I think there's something
psychological that makes it easier to sign a piece of paper than to write a
check or whip out the cash. One is your money, the other doesn't seem to be.
The worst part of being up to your eyeballs in debt is that it snowballs quickly
and usually hopelessly. There are debt reduction programs and free consultation
services and unfortunately bancruptcy. But it's easier not to get there. Another
problem is bad credit on the report that's incorrect. Amazingly this happens
very often and consumers aren't usually aware of it until they apply for something.
It pays to check about once a year. If something is in error it's usually not
difficult to get it corrected.
I had a young man (19) come to see me yesterday. He said he wanted to buy
a house and no one would pay attention to him. What a sad statement. He has
belonged to his credit union for years. He has rented a house for a year and
paid the utilities. He's a certified mechanic who took first place in the state.
He has worked in the same field for several years. That's more stability than
I've seen in some forty year old people. John went to the credit union and
spoke to someone in the mortgage department. I'm fairly confident it went well
and I will find him a good property and a good deal because I know him and
I'm proud of him. I think he was hesitant to talk to me because his mom and
I are best friends. I wish the other people had treated him with the respect
this young man deserves.
Suzie is a certified residential appraiser, licensed real estate broker and
an expert author with twenty years experience in the business. Other professionals
in the field have contributed as well. http://www.freewebs.com/realestatenews
