is a load of crap. There, I said it.
What’s in the envelope labeled “CCs”, you ask? Credit cards, of course! Back in March when Josh turned me on to Dave Ramsey and his common sense teachings, I emptied my wallet of all of my credit cards, put them in this envelope and sealed it up.
That’s right, I haven’t used a lick of credit in over six months. In fact, I’ve actually paid off all but one of the cards in full, following the guidelines of the Total Money Makeover.
But… you can’t “NOT” use credit, right? After all, just today, President George Bush had this to say during his speech at Guernsey Office Products:
See, when credit runs dry in one part of our economy, there’s a chain reaction. So you want to sell a desk to somebody. That person needs to borrow the money in the short term to buy the desk. And yet, because the credit has tightened, because some banks are lending, a potential customer doesn’t have the money to buy your desk, and that affects you. So a lot of the talk that you’re hearing about credit crunches applies directly to your business here at Guernsey. It hurts your suppliers. It affects the entire economy.
Am I the only one that thinks this sounds absolutely absurd? How about you friggin’ pay cash for the desk - problem solved.
I want to take a few minutes and mention some of the things I keep hearing about on the evening news, which BTW, is getting very old.
Banks are to blame for giving home loans to people who couldn’t afford to buy a house. Why / how did they do this? They simply looked at an individual’s credit score and granted the loan based on that single number. Moral of the story for banks: credit scores are retarded. Credit is built by borrowing and paying back money over and over. Any yahoo can do that. Do real work, a process known as manual underwriting, like they did in the “old days” to determine if someone can afford a home. Verify if someone has a job, a steady income and a nice down payment. Problem solved.
But, the media keeps saying that people can actually get home / car loans if they have good credit. So, there isn’t a “credit freeze” for people in good standing? Meaning, people with lousy credit can’t get home / car loans? … what is the problem there? If those people can’t afford to pay a loan, they shouldn’t be given one. But yet, the government is passing bills to pump a ton of money into the “market” to free up the “credit crunch”… for people who can’t afford to repay loans? Brilliant!
I saw a story on the news the other day where businesses, in this case, a car dealership, was unable to make payroll for the week because they couldn’t borrow the money from their bank. Are you serious? You run a business… yet, you don’t even have enough money to pay your employees without taking out a loan each week? Really? How about you revise your business model or shut down shop, because your current plan doesn’t work. Problem solved.
Credit is absolutely out of control in this day and age and really, everyone is to blame. As “crazy” as it sounds, imagine if credit didn’t exist. Imagine if people acted like adults and saved money to buy things they needed, instead of acting like a spoiled 5-year-old who wants everything now now now. Imagine if people lived on less than they made. Imagine if people actually saved money for retirement. What if you had a cash emergency fund for when something unexpected happens - it would only be a minor annoyance instead of a financial disaster.
All of these “myths” are a reality for millions of smart Americans. Americans who are intelligent enough to realize that life is much better without the hassle of credit. These people aren’t up to their eyes in credit card debt. These people realize that their income is their biggest wealth building tool. You can’t build wealth if all of your money is spent before you even get home! Open your eyes America.
In closing, life has been just fine for me without credit. I don’t need credit or credit cards. Yes, I am still paying off my stupid tax, but luckily, I got a clue before I was deeply in debt like many Americans are at this very moment.
Unfortunately, it’s too late and that silly bailout bill has already been passed. Too bad our leaders didn’t consider Dave’s Common Sense Fix.
