How Marketing Tricks Can Stress Your Credit Score and Bank Account

TAC Blog Pixel Template 1024x681 How Marketing Tricks Can Stress Your Credit Score and Bank Account

The following is a guest post from Glenn Sosa, Author of  SOLD: Don’t Go Poor and Miserable Being Sold Happiness.  To find out how you can guest post, read my guest posting policy and contact me through the page.

ESPN recently aired a 30 for 30 documentary titled Broke. The documentary featured the stories of several formerly prominent athletes who went from millionaire status to bankruptcy. The stories poignantly showed how someone’s inability to control spending can destroy their net worth – not just  financially but also emotionally.

Since the original airing of Broke, I’ve had a few discussions with college counselors at prominent universities that produce a lot of professional sports talent. These counselors are responsible for teaching their student-athletes the life skills that can help them avoid the fate of the players featured in Broke. It was interesting to hear how those curricula, for the most part, focused on explaining financial products.

Marketing Tricks and Gimmicks

There was no indication that any of the curricula dealt with the root cause of spending problems and what leads consumers to feel that “wants” are “needs”, and that root cause is marketing.  Without an understanding of the marketing tricks and gimmicks that organizations and salespeople use and how those techniques tug at emotions, consumers will remain very vulnerable.  This is true  regardless of whether you are an average consumer or a superstar athlete.

Yes, it’s smart to understand how credit works and it’s wise to have a budget (there’s no questioning these two personal finance tools), but credit histories and family budgets of all sizes have been blown out of the water by a well structured sales pitch or marketing promotion that pushes the right buttons.  So how can you protect your credit score and your bank account? Here are three tips:

1. Understand the difference between “wants” and “needs”

All good personal finance authors, especially when dealing with budgeting and consumer credit, will help consumers understand that needs come before wants. But what is a “need?” You’d think that these would be easy to agree on; food, a place to live, and clothing are some commonly noted needs. And yes; consumers need to eat, live and sleep somewhere suitable, and clothe themselves adequately as well.

But what if you think you need a $500,000 McMansion versus a more modest $150,000 2-bedroom house? Or you argue with your spouse about needing a late model Lexus rather than a practical, attractive, and reasonably-priced Ford?

You are not going to find a one-size fits all definition for consumer “needs” and “wants”. The differences will vary from person to person. It’s up to you to figure out where “needs” end, and “wants” begin. A written budget will go a long way toward helping you figure this out. The sooner you do this, the easier it will be to manage your spending moving forward.

2. Learn about the marketing techniques that are used to sell to you

I gave a talk on the traps of wants versus needs and I asked everyone who attended whether they have ever had to sell something and whether they were trained to sell that something. Almost everyone raised their  hands – that is; everyone who had worked in sales, quite naturally had been trained to sell.

I then asked the same group whether they had ever purchase something. Of course, everyone raised their hand. The next question was the most interesting; “Who here has received buying training?”  No hands went up; not one.  You see, buyers are at a disadvantage. You need to equip yourselves with an understanding of how organizations and sales people sell to you.  That’s why I wrote SOLD: Don’t Go Poor and Miserable Being Sold Happiness; to be a consumer guide to help level the marketing playing field.

3. Have a buying process

Knowing how not to be sold is great. And knowing the difference between wants and needs is also important. But when you have a true need and go to the market place to buy it, how can you do that in the best way possible? You need a simple buying process.  Fortunately, my book covers this as well.  From step 1, “Realize a Need”, to step 7, “Purchase and Experience Ownership”, you’ll learn simple tools on how to avoid the most common pitfalls.

Don’t repeat the mistakes that so many superstar athletes have made!  Learn how to handle the root cause of credit and budgeting problems and by understanding how marketing tricks and gimmicks lead you to believe that wants are really needs, when they’re not!

Glenn Sosa is the Author of SOLD: Don’t Go Poor and Miserable Being Sold Happiness

For weekly tips, you can follow Glenn on Facebook or connect with him on Google+

Why You Should Wake Up Each Day With a Sense of Urgency

Sense Of Urgency 1024x681 Why You Should Wake Up Each Day With a Sense of Urgency

As a survivor of credit and financial hell, on the road to recovery you will find there is a sense of urgency you can’t help but to develop.  Maybe some of you reading this post can directly relate to that statement.  Once you have reached the point of, it is what it is, but will become what you make of it, and you have awakened from the malaise you were in, that sense of urgency should be there waiting for you with open arms.

Every day you don’t take action with a sense of urgency to right your financial ship, is a day you continue in decline!  And I’m not just talking about one or two things here; I’m talking about an “across-the-board” sense of urgency in everything you do – both personal and business!  For some of you, this may be easier to do than others.  Lucky for me, I’m a Type A personality and a sense of urgency is part of my DNA make up.

Positive Steps to Increasing a True Sense of Urgency

So that we’re clear, urgency is not just excess energy, anger, or frustration manifesting itself in what you are trying to accomplish.  For sure, those things are a part of it, but what you really need to learn is to behave with urgency every day.   As much as you can, you need to demonstrate your own sense of urgency in your daily interactions to as many people as possible and with your everyday tasks.

I mean, if your tone or actions lack urgency, then that’s what others will feel.  But you and I, we’re on the road to financial recovery and that means we are out to accomplish our tasks and goals that will lead us to success with the maximum amount of efficiency – in the shortest amount of time, right?

Move and Win Now

Look, this is about you!  You have to develop a habit and determination to move and win now.  We are not in take prisoner’s mode.  We are aiming straight for the heart, not just the mind.  You need to compel yourself to action in order to feel empowered to buy into your own sense of urgency.  This is what I am doing, and have committed to do, in my every day tasks.  You should too!

If you look close enough and you have taken the first step I outlined in my post “3 Steps You Must Take To Recover From Credit and Financial Hell” which is to change your mindset, you will see that there is actually opportunity in crisis!  In fact, having gone through credit and financial hell, you should have learned to think of any crises as a potential opportunity to better yourself and improve your situation!

Do They Share Your Sense of Urgency?

This is an important question to ask yourself, you see: not everyone will share in your sense of urgency.  There are many people who for one reason or another, could give “two shits” about your sense of urgency and here’s what you should do if you run into that person; run the other way!  You have to remove or neutralize all the relentless urgency-killers in your life; people who by their actions or lack thereof, keep you complacent or worse yet, create destructive urgency!

In a recent blog post titled “10 Things Winners Do Differently” from the Marc and Angel Hack Life Blog, number 5 on that list spoke directly to my point:

#5 Keep good company.It’s not always where you are in life, but who you have by your side that matters most.  Some people drain you and others provide soul food.  Be sure to get in the company of those who feed your spirit, and give the gift of your absence to those who do not appreciate your presence.

And by ‘give the gift of your absence’ they mean – run the other way!  If there’s one thing you are in control of, it’s who you choose to associate with! Do it wisely.

Get Out of Your Comfort Zone

Another blogger I follow is Craig Ballantyne from the Early To Rise blog.  In a recent post titled “Break Out of This Today” he wrote about being in the comfort zone, “Unless we get out of our comfort zone, the reality is that we won’t make breakthroughs in our lives, our businesses, our relationships, or our health.  You simply can’t coast through life if you want to get better.  However, getting out of the old comfort zone is something everyone deals with and struggles to overcome. When you have bad days, you’ll be tempted to return to your comfort zone habits, but it’s also the time when you need to fight against that the most.”

Keeping bad company and associating with people whom, for one reason or another don’t share your sense of urgency to succeed, will chase you right back into your comfort zone! That means if you’re looking for a new job, partner, or company to associate with, interview them too!  That’s right; make sure they fit into your current mindset and they are fully aware of your sense of urgency and commitment to succeed!  If they say, like was recently said to me, “I realize your urgency but we are not staffed to do things at the drop of a pencil”, run as fast and as far as you can from them.  They will not help you get to where you want to go so why waste your time; make sense?

Wake Up Each Day With A Sense Of Urgency

Let me close this blog post out with item number 10 of the Marc and Angel Hack Life Blog post titled “10 Things Winners Do Differently” :

#10 Keep going.No matter what you do, no matter how many times you screw up and think to yourself that there’s no point to carry on, and no matter how many people tell you that you can’t do it – keep going.  Pick yourself back up.  Don’t quit.  Don’t quit, because a few months from now you will be so much closer to your goal than you are now.  Focus on the road ahead.

So my challenge to each of you is that you wake up each and every day with a sense of urgency, both with your career and in your personal life, and remember these points moving forward;

  • The magic happens outside your comfort zone!
  • Look inward, not outward.
  • Success requires change, so embrace it!
  • Bullet proof your mindset
  • And, go to work on you!

Do you have a sense of urgency?  If yes; is it helping you reach your goals?  If no, why not, and do you think by adding a sense of urgency to your daily tasks, it could help you “win the day” and achieve your goals quicker?


Are You Part of the 47% Mitt Romney Doesn’t Care About? I Am!

The Mittster1 Are You Part of the 47% Mitt Romney Doesn’t Care About?  I Am!

Let me begin this post by giving you a little context in case you’ve been living under a rock over the last month.  In a private high dollar fundraiser event held just down the road from me here in sunny South Florida (no, I wasn’t invited but I can almost see Boca Raton outside my window), Mitt Romney, caught on hidden video said “There are 47% of the people who will vote for the president no matter what.  Alright, there are 47% who are with him, who are dependent upon government, who believe that they are victims; who believe government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it! That that’s an entitlement, and the government should give it to them.”

I don’t know how you felt when you first heard, watched, or read those statements; but me?  Incredulous is the word that comes to mind!  If incredulous is defined as being skeptical or disbelieving – then I was both skeptical as in “does he really believe what he just said” and disbelieving as in “did he just say that about half the population?”

How Did He Arrive At That Number?

Let’s go ahead and review the Governors math, shall we?  First, according to the United States Census Bureau’s population clock, as of October 7, 2012, the U.S. population is 314,532,884 million.  Now I’m not Nate Silver performing Political Calculus here or anything, but 47% of 314,532,884 is 147,830,455 million people voting for Obama because they are victims and who are dependent on government; right Mr. Romney?  (And no, there isn’t an empty chair next to me as I type this blog post).  Let’s look at the numbers of that “entitlement” crowd.

According to the Social Security Administrations website, 56 million Americans will receive some form of Social Security Benefits in 2012.  Now Before you blow a gasket, I know; Social Security is called an “entitlement”. But is it?

Social Security Is an Entitlement

The mistake many of you make when you hear the word entitlement is to think like Mr. Romney does which is to think that those receiving social security benefits believe government has a responsibility to care for them and that’s just nonsense.  Here’s why; last time I checked, you have to pay into the system and the program is funded by workers’ payroll taxes so if the word entitlement is defined as “having a right to something”, then sufficed to say, you have a right to collect those benefits!

Let’s get back to the math.  56 million collecting social security benefits subtracted from 147,830,455 leaves 91,830,455 million more “Obama Voters” to account for.  Let’s move on to another entitlement; Medicare.  According to the 2012 Annual Medicare Report, in 2011, Medicare covered 48.7 million people.  Again, let’s go to the math; 91,830,455 million subtract 48,700,000 leaves 43,130,455 million more dependent on government, Obama voters still to account for.

Did Romney Actually Mean To Say 49%?

As of June 2011, 49% of Americans received some sort of financial support from the government according to the U.S. Census Bureau.  However, that number includes more than just people receiving anti-poverty assistance. It also includes Social Security and Medicare, the federal pension and health care programs for seniors, which as I mentioned earlier, are programs funded by workers’ payroll taxes and aren’t typically associated with concerns about dependency (AKA Obama voters to Romney). It also includes other benefits, such as worker’s compensation or educational assistance for veterans.  Surely Romney wasn’t including veterans in his accounting, was he?

The number of people who qualify for “means-tested” benefits, which require applicants to have incomes below a certain level, was actually 35.1%, according to the Census Bureau.  By comparison, when the already-slumping U.S. economy began its free-fall in September 2008 of which I happened to be a casualty of, 24% of U.S. households received means-tested benefits such as welfare or food stamps.  An April report from the nonpartisan Congressional Budget Office found that roughly one in seven Americans received food stamps, compared with about one out of 11 in 2007.

Holy Crap! He Really Did Do the Math

So let’s go ahead and add roughly another 44 million to represent the number of Americans on food stamps and now our math is up to 148,700,000 free-loading Obama voting Americans dependent upon government, who believe that they are victims and believe government has a responsibility to care for them who will never vote for you, right Governor Romney?  Wait a minute.  Holy Crap; he really did do the math.  That’s exactly 47%!  Take that Fact Checkers!

Only…there are some serious flaws with these numbers. But why let those get in the way of nailing a statistic like Romney did at his high dollar fundraising event?  Do you know anyone on welfare, collecting social security, or on Medicare who have voted Republican – EVER?  Do you know of anyone right now collecting those aforementioned government benefits that have proclaimed they are voting for Mitt Romney?  Of course you do… and so do I!

Ryan Also Part of the 47%

I’m only 47 years old so I don’t collect any social security or Medicare Benefits…yet.  But my Parents do and I expect my children and I will as well.  But not if Romney and Ryan have anything to say about it.  Funny thing about the Governors running mate:  Ryan and his family would have been part of the 47% Romney referred to as well because at the age of 16, Ryan’s father passed and he collected Social Security benefits until he was 18.  I would like to ask him what having that social program step in and help meant to him, his family, and to his future.  Unless of course, he really didn’t need it.  You’ll have to ask him.

That only leaves one qualifying item; when my business failed, I was not entitled to any unemployment benefits.  I was also paying almost $2000 dollars a month for my Blue Cross–Blue Shield health insurance policy to cover me, my two children, and Kelly who had a pre-existing condition, that I could no longer afford and at the end of a long and torturous road through financial hell, I had to accept both Medicaid and Food Stamps.  Judge me if you must, but as a person who was averaging paying $40,000 dollars plus a year to the Federal Government in taxes (Yes, I was formerly a 1 percenter) and has been paying into the system since I was 15 years old, I never felt entitled to these benefits as much as I was grateful they were available for me and my family in our time of need.  I never felt like a victim Mr. Romney, rather a casualty of the economic realities that befell me and millions more across these United States.

Mitt Was Right

So you see; I am truly part of that 47% Mitt Romney referenced at his fundraiser and far be it for me to make a liar out of him since he’s so good at doing it for himself.  Yes Mitt; you were right!  I am not voting for you but not for any of the reasons you laid out on video to your high-level fundraising contributors, and everything to do with Mitt Romney the candidate!

What did you think when you first read or heard about Governor Romney’s statements referencing the 47 percent and do you agree, or disagree with them?  Please lend your voice to the conversation and if you liked this post, please share it with your friends