I just finished reading an article on the Huffington Post by Kevin Yu, one of the founders of SpringCoin and a certified credit counselor with the NACCC – The National Association of Certified Credit Counselors. In the NACCC website, it says that their mission is to increase professionalism, standards, ethics, and positive recognition in the financial counseling industry. It says they believe that financial counseling represents an important consumer service and that education is the key for enhanced on-the-job effectiveness, employment satisfaction, and client retention. OK
I’m all for credit counselors having professionalism, standards, and ethics in the same way I’m all for collection agents to have professionalism, standards, and ethics. Consider this post an endorsement of both the NACCC and ACA – The Association of Credit and Collections Professionals.
The Other Half Of The Battle?
Mr. Yu just penned an article titled, “Life After Debt: The Other Half Of The Battle. In it, he opens up well by pointing out that there’s a reason why consumers fresh out of bankruptcy begin to receive credit card offers in the mail after they’re discharged; credit card companies have a deep understanding of consumer spending behavior and they realize it takes a drastic lifestyle change to reduce your spending habits. In other words; they know you probably won’t!
Here’s where I think the article goes off the “real life” script. He states, “It’s a surreal feeling once you’ve paid off your last credit card. You feel a thousand pounds lighter and finally feel liberated.” You know what’s a surreal feeling? Waking up on the other side of a $1.6 million dollar Bankruptcy and still having your family intact. The release from stress of getting the IRS off your back after getting $164,000 dollars in federal tax liens released without losing your home. Owning your family van outright after not having one, but two cars repossessed; happy in the thought that no one’s coming for it in the middle of the night. That’s surreal! A thousand pounds lighter? I felt a thousand lifetimes lighter!
He continued by saying, “if you haven’t already figured out how you got into debt in the first place; take a long hard look at your past. Stare debt in the face and be honest with yourself. You shouldn’t be ashamed of once being in debt, it happens to the best of us.” Can’t argue with that and I’m talking from experience. But here’s where the post turned simplistic. He asked; why do people fall into debt? His answer? “Simply put, it really just comes down to spending more than you earn and not creating a rainy day fund.” Is that it?
He then went on to say, “Technology is growing faster than we can keep up with. We’re always being pressured to buy the latest gadgets: TVs, iPhones, tablets, or cars. Our friends and neighbors are buying it, so we succumb to it.” Say what? And then what; as pressured consumers we go bankrupt or seek out his services? He goes on to say that there’s a line between spending carelessly and shopping frugally. A line? What the hell is that? Did he mean to write a ‘fine line’? Because if he did, I’d tell him he’s wrong! There’s a world of difference between spending carelessly and shopping frugally. I would refer him to Katy Wolk-Stanley’s blog – The Non-Consumer Advocate, to learn the difference. Spending carelessly can ruin your financial life; shopping frugally will never ruin your financial life! Like I said; worlds apart.
He goes on to say that easy access to credit is part of the problem and, “When we think about having a $10,000 credit line, some of us might tend to think of it as “free cash.” It’s easy to get sucked into paying small monthly minimum payments with the idea that you’ll eventually get out of debt.” This is 100% on the money. But, again he goes off the “real life” script. He says the other half of the battle is staying out of debt and to start saving for “your rainy day and retirement fund.” I disagree.
The other half of the battle is not the challenge to stay out of debt and start saving for your rainy day and retirement fund because there isn’t another half; there are first steps to take after recovering from debt and credit issues. Notice the plural use of the word ‘steps’ and there are many stages involved with those steps which he couldn’t possibly cover in an article as simplistic as his! I can tell you that one of those steps is learning how to change your mindset. If you haven’t already done so, read my post titled “It Is What It Is…But Will Become What You Make It.” You can’t fix a problem with the same ‘mindset’ that helped get you into it.
I’ll leave it at this; the best points to take from his post are that it’s absolutely necessary to budget. If you don’t have a plan, then you’re planning to fail; it’s just that simple. The second one is to learn from your mistakes; which goes to my point of creating a new mindset!
If you’re recovering from debt and credit issues, what steps did you take, or are taking, to ensure that you don’t go down that path again. For me it was living Katy Wolk-Stanley’s motto: “Use it up, wear it out, make it do or do without” Are there any motto’s you’re living by? I’d love to hear it!