Bad Attitudes That Can Lead To Financial Ruin
 
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Bad Attitudes That Can Lead To Financial Ruin

San Diego, CA.  "When it comes to saving money, most people will simply stop at nothing." For married couples, the new vow that replaces"until death do us part" is "until DEBT do us part". For the credit card spenders with huge balancesthe way out is either bankruptcy or trading out their home equity to pay off their credit card debts. These three examples reflect the attitudes held by many American consumers, and especially the younger generations.

The baby boomers are slowly learning that it is their everyday spending decisions, especially the credit based ones, that are negatively affecting their finances as they approach retirement, more so than any investment decision they ever made, if they even invested for retirement.

Jim Garnett, a member of the ICFE's Board of Educational Advisors and the Education Coordinator for Consumer Credit of America, a/k/a Consumer Credit of Des Moines has put together some attitudes that lead to financial ruin.

"There are four attitudes that are very common today. When they merge in one person, financial ruin is not far behind! Here are the four attitudes," says Jim

1. " I WILL TAKE ALL I CAN GET." The average consumer today has access to four times the amount of credit he did just ten short years ago. At the same time, he has less ability to repay it!. This "take all I can get" attitude coupled with this easy access to credit, leads us to borrow more than we need and have higher credit limits than we should. The result is that we always seem to find a way to spend up to our credit limit.

2. "IF I CAN GET IT, I CAN AFFORD IT." This attitude confuses ability and access. We perceive that we can afford whatever we have access to buy. But stop and think, ability implies wealth while access implies debt. Credit affords access to buy, far beyond our ability to buy. I recall the client who was spending 40% of her take home pay on her car payment. When asked how she determined she could afford this car, she replied that the dealer let her stretch the
payments over seven years. She then had access to buy the car, but she still could not AFFORD the car! Because access does not determine ability. Her $24,000 Blazer cost her nearly $48,000!

3. 'IF I CAN GET IT, IT IS A NEED NOT A WANT." To illustrate how this thinking works, just imagine your boss gave you a $1000 bonus tomorrow. You would immediately begin to construct a list of things you need to buy with this $1000. Funny, isn't it, that five minutes before you were told about the bonus money, those needs were just wants. Bewared of this attitude! Once we have access to get something, we usually conclude it is a need, not a want.

4. 'WHOEVER OFFERS ME CREDIT MUST KNOW I CAN REPAY IT." We put our confidence in the person we are borrowing from because we think they are knowledgeable in the world of finance. We trust them to tell us what we can afford. But if their expertise were accurate, we would not see the bankruptcy courts filled with applicants. We must begin to assume responsibility for deciding what we can afford; not leave it to someone else to tell us. We are the ones who will be repaying it, not the person who lends it to us.

If you have a question for Ask Mr. G, please email it to: askmrg@yahoo.com


For more info contac:

Paul S. Richard
Executive Director
Institute of Consumer Financial Education
PO Box 34070
San Diego, CA 92163

619-239-1401

Email Reply: info@icfe.org 
 

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

About the ICFE:

The Institute of Consumer Financial Education (ICFE), founded in 1982 by the late Loren Dunton (creator of the 'certified financial planner' (CFP) designation) and it is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. The ICFE trains and certifies Personal Finance Instructors for its own curriculum. It also trains and certifies Credit Report Reviewers and Identity Theft Prevention Specialists.

The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, now in its 16th printing and has distributed over one million 'Credit/Debit Card Warning Labels' and 'Credit/Debit Card Sleeves' world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.

The ICFE is also a partner in the national Jump$tart Coalition for Financial Literacy and the California Jump$tart chapter. The ICFE staff is also active with San Diego Saves, an offshoot of America Saves, and the California Student Debt Resource Awareness Project (CASDRAP) (studentdebthelp.org).

The ICFE's on-line help for consumers who spend too much was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from 'The Money Instruction Book,' a course in personal finance, positioned to become among the premier programs in the new bankruptcy and debtor education initiatives.

The ICFE Web site at: www.financial-education-icfe.org helps consumers with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and videos and how to teach children about money. Other ICFE services include a free eNews, and an online resource center of financial education learning tools, including videos, books, software and personal finance courses.

 
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