Our children are told that they must get loans and credit cards to obtain a credit rating. They've been told that they must have a credit rating in order to purchase a house.
This thought process gets them in trouble and sometimes ruins their credit score.
The other day I had a conversation with my children about getting a house and how that is a struggle to achieve because of credit scores or lack there of.
I told them that the reason the poor always stay poor is because they get into debt and never learn to save money.
To have a future, you have to learn several things:
1. Work hard in your job and live below your means.
2. Always have a written budget every month and learn how to save money.
3. Don't go into debt! You end up having to pay interest rates - which takes more money out of your pocket. The rich don't pay interest or extra money because they pay everything with cash (that is how they get rich).
4. Have an emergency fund so that you don't have to go into debt when emergencies DO happen - because they always will.
5. Learn to pay yourself first every paycheck. Money you put into a savings account for your future dreams. When you have money left over each month because you have lived below your means and saved money - put that into your savings account too and watch it grow.
I explained to them that the reason their generation is having a much harder time to have what our parents and grandparents had is because they didn't go into debt. They budgeted, saved, and lived below their means. They didn't go into debt to keep up with their neighbors.
The access we have to credit hurts us! The older generation didn't have access to credit like we do. We go into debt on trivial things that aren't needed or emergencies. We think it's normal, but what really is happening is that you are mortgaging your future dreams by going into debt.
This financial lie is hurting this generation.
If your savings equal 30% - 50% of the cost of a home, they WILL give you a loan without a credit score. OR ... wouldn't it be better to purchase a home with cash - not giving the bank any interest. (This also applies to cars - it's better to always pay cash for cars).
If our children learn to save when they start earning money and live below their means and learn to never get into debt ... the dream of having a home is within their reach.
Life is better and easier if they don't believe or learn the financial lies we've been programmed to live today.
If you reject these financial lies, you can have a better life and achieve your dreams.
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