It’s become quite fashionable to attack credit card companies or banks who hold our mortgages, especially with the recent turmoil in the financial market. While talk of increased regulation and pointing the finger of blame may each have their place in how we deal with such situations, both psychologically and fiscally, they can quickly overwhelm and consume us with negativity that breeds further negativity and spreads to parts of our lives we once thought were not connected to finances.
That’s one path. Another path is to look at such pivotal points in our life as turning points, or forks in the road. I’ve always held the belief that life is a school of higher learning, and that we should look for lessons to be learned from our experiences if we truly seek to make the best of a bad situation and grow as people. Here are some lessons I’ve learned from my creditors.
The bank where I have my mortgage
Having a mortgage has taught me to do without. It’s the one payment I know I must make every month. Because of this I’ve had to forgo many luxuries I had previously considered to be necessities. Since my wife and I started living on a single income, and our mortgage payment took the lion’s share of our diminished income, I have learned to be more frugal than I once was.
My credit card company has taught me the importance of starting early down the road of financial success. It’s no secret credit card companies target college freshman. They know that money habits learned early in life tend to continue throughout a person’s life. If they can get college students dependent on credit to maintain their lifestyles, then they’re likely customers for life.
What I learned from this is that the earlier in my life I practiced disciplined savings and investing, the more my money would grow over time. My first job out of college, I enrolled in my company’s 401(k) program and set aside 10% of my income from day one. As a result, my retirement savings is twice that of many of my peers. I don’t say this to brag. What I did doesn’t take a high IQ, or a privileged upbringing. It took awareness, and the discipline to get started.
Since 1943, the U.S. Government has known that getting paid first was the surest way to get its tax revenue. I’m talking about the Current Tax Payment Act of 1943. This act of congress led to the income tax withholding that we all know and love today – it’s where that large chunk of your paycheck goes every two weeks before you ever see it.
I took a page from the IRS and enrolled in my company’s 401(k) program. In fact, Tax deferred programs like 401(k)s and IRAs are just about the only way you can really pay yourself first as an employee, since that money is tax exempt.
My children. I love my children. You may be wondering why I list them as a creditor. You may be thinking that it is they who should be indebted to me. Well, that’s certainly true in many ways, but I am also indebted to them. I owe them a sound financial upbringing in a stable home environment. It’s largely because of them that my wife and I eschew debt wherever possible. We make financial sacrifices so they won’t have to worry about having food and clothing, or whether we might lose our house some day. Having children who are dependent upon me for every aspect of their little lives has taught me the financial maturity and discipline to do what I know is right, even if it isn’t as exciting as buying that new computer game, iPhone or iPod.
I’m sure each of us has our own lessons, as we each have our own distinct life circumstances. But I think the take away here is that many times when it seems that life has given us hard times, if we can use these times as learning experiences then some good can come out of them.
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