By Loren Dunton, (1918-1997) Founder of the ICFE
CONGRATULATIONS on your willingness
to read these Credit Tips. We can all benefit from reminders about
our credit card spending and smart people are willing to use the
reminders.
Credit cards can be a wonderful convenience and having at least
one for identification has become almost a necessity in our daily
lives. But they can also be "plastic dynamite" to our
future if we carry too many and use them too casually. And no
wonder since even college students find them so easy to obtain.
What is costly of course is using them to make purchases we are
unable to pay for at the end of the month. Millions of people
are now paying twenty-five to thirty dollars-a-month in 15-20
percent credit card interest.
Talk about something "dangerous to our wealth!"
If thirty year-olds would invest that $25 a-month at 8 percent
they would see it grow to more than $57,279 by age 65. Imagine
what would be available for those individuals at age 65 who also
cut $75 off their unnecessary spending and invested hundred a-month
in a good mutual fund or even in a compound-interest savings account
at 8 percent they would have almost a quarter million dollars
in savings.
For some, these warning stickers on each credit card will be enough
to make them stop and think. Just this can help slow down on unnecessary
or too-self-indulgent spending. Or at least be motivated to put
off a purchase until one knows it can be paid for when the bill
comes.
As Paul Richard, RFC the Institute of Consumer Financial
Education's executive director, who created the "Credit/Debit
Card Warning Labels" says, "So many forces in our society
are trying to influence us to spend our money that we need all
the help we can get to spend less so as to save and invest more
for our future."
Two helpful ideas: One, create a Spending Plan* because "budgets"
don't work. Two, learn the technique of "Spending-by-Choice",
** not on impulse.
Remember, for all of us, but young people especially, acquiring
better spending habits can change a life ... for the better!
GOOD LUCK!
*A "Spending-Plan" is similar, but NOT the same, as
a budget, which nine out of ten people fail at. A " Spending-Plan"
gives people the psychological satisfaction of spending money.
A budget while admittedly it shouldn't, seems to often rob most
people of the spending satisfaction.
**The "Spending-by-Choice" technique means using
credit cards for purchases only after we have taken enough time
to visualize three other things that could be purchased with that
same money.
For Credit Card Warning Labels, visit our Online Store.