We’ve probably all made decisions in the past that we look back at and think “What the hell was I thinking?” Right? We’ve all been there. Maybe it was a stupid decision you made back in high school or maybe it was a bad purchase you made at some point in your life that is still eating you up. It happens.
But here’s the thing…When it comes to money and financial decisions, you absolutely have to remember that every decision you make should be one that will put you in a better position in the future.
Check out this video to learn why but here’s a quick example:
At the age of 24, Joe was fresh out of college and didn’t have a lot to his name. He was drowning in student loans, working at a job that didn’t pay well and living paycheck to paycheck. To get his head above water and get some extra spending money to live, Joe decides to get a credit card. Now, he spends the balance on that credit card pretty quickly and of course, he had no money to begin with so he can’t pay it off. So, what does he do? He goes and gets another credit card. Same thing happens. Then, somehow, someway, he ends up getting a personal loan to help him out.
Now, let’s flash forward a few years. Joe is now in his early 30’s and he’s grown up a bit and he’s making a bit more money, but he’s still in debt. His credit is shot because he can’t pay the balances on his cards, he can’t make his monthly student loan payments and the list goes on.
Joe wants a fresh start. He’s watching TV one night and just happens to see a commercial on TV for a credit counseling company that will take away all of his debt. He’s ecstatic. He thinks that’s exactly what he needs. So, the next day, he calls up the company and they tell him they’ll consolidate all of his credit card payments, his loan payments, etc. into one so that all he has to do is focus on paying one single payment to them. Sounds good right?
Wrong. What Joe doesn’t realize is that this credit counseling company isn’t really helping him get out of debt. Why? Well, they’re taking his debt away, sure. But in turn, they’re telling him that on top of the payment he’s making to them, he is also going to pay a management fee, maybe 10-15% on top of the payment. Wait…did you get what I just said? Joe is going to be paying MORE than he already was. This guy is already in debt and this company is charging him an extra fee!
Do you see what I’m saying here? Credit counseling companies are NOT who you should turn to when you’re in debt. Not to mention, in order for them to actually work with you, you have to be in default on your credit which completely ruins your credit score.
So, what should Joe do? He should seek a company that offers credit consulting or in other words, a company that will actually repair and restore his credit. These types of companies will actually work one on one with him to repair items on his credit report. They’re not just putting a bandaid over the problem. They’re fixing it for him, and in turn, leaving him with better credit.
Look, I have plenty more tips and tricks in my book 3 Paths of Lending. You can get your copy here – Drop an emoji in the comments if you already have it.
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