Monday, May 05, 2008
The Lessons We Learn
These days, more and more people are facing the reality of “living beyond their means”. If you cannot afford something, if it’s beyond what you can keep making payments on, then you should consider something smaller, less or wait a little bit.
Most people understand the basic concept of “living beyond your means” but I think a lot of people don’t understand it fully. I learned this lesson the hard way a decade ago. I was in a pretty bad car accident and my credit was destroyed. Was I living beyond my means? I didn’t think I was. The money I was making absolutely covered my bills each month.
However, “living beyond your means” also means that if you don’t have something saved up, just in case something dreadful happens, then you are still living beyond your means. While I had the money to pay my debts and creditors each month, I did not have the savings to continue to pay in case I had no income or loss of income for a period of time.
I, too, lived beyond my means although I didn’t understand it. The car accident was not my fault. The arbitration and settlement took three years. My living came from driving my car. How do I continue to bring income, pay all bills including rent if I don’t have a car for over a month while it’s being repaired? These are questions I did not ask myself. For a long time I suffered the ramifications of not thinking of those possibilities.
Once your credit has been tarnished, it’s next to impossible to get a loan or a credit card. Many lenders need to protect themselves and are unwilling to offer you a second chance. However, fortunately some lenders will give you that second opportunity to help you rebuild your credit for the future.
Applying for bad credit loans and bad credit credit cards may mean you pay a higher percentage rate but that is the price sometimes you have to pay to rebuild and continue towards your future dreams. It’s not always easy but at least there are places that make it possible. Eventually your score begins to increase and your percentage rates will go down if you learn from mistakes.
It’s a long, hard road but credit, good credit, IS important to have. You never know when you need it.
