is how America handles finances, or credit/debt more specifically. So, here I'm sitting, all happy about how we are handling our finances. We keep our debt minimal, we try not to spend money on stuff we don't have money for, and if we use our credit card, we pay it off each month. I think, we really try to follow the prophet's admonition to stay out of debt to the best of our abilities. But now, here is the fun part: now this freak of financial advisor for the optometry students tries to tell us that we need some loans, like a car loan, or credit card payments that we let roll-over to the next month etc. to be more eligible for a later loan for a practice. I can't even really write about this without getting angry. Maybe not enough time has passed, but one would hope that the current financial crisis would teach people one thing: debt is bad. But no: let's play the stupid credit game and try to show to lenders that we are "responsible" by using money we don't have to buy things we don't need, but we pay them off eventually, so therefore we are responsible financially. Yeah right...how come it's not considered responsible to live within your means, and to pay off your credit card promptly?
Maybe this guy is just full of BS, but I'm so upset to think that now we may have to buy a car or some other crap we don't want, pretend to be paying off some sort of loan or whatever, just so some idiot bank believes we're responsible, when truly it's the banks who are irresponsible these days.
I don't think I'm making sense. I just hate debt. I hate feeling like now I have to spend money where I don't want to spend money, and start pretending to handle my finances a certain way just so some irresponsible, dumb bank believes we're "responsible"...grrrrrrrr....
P.S. Please note that there is a cute post about Sophia before this one. ;)
P.P.S. A little up-date on the finances. I still hate debt. I still hate how things are run by the banks. I just talked to my dad today about an article in a German newspaper, that reported on this man who worked for the UN, never had debt, always paid 'cash', then came to the US and couldn't get a loan for a house, even though he could easily pay almost half of the house in cash, because of his income, simply because he never had debt/credit history. Kind of ridiculous. Anyway, I digress. Our financial advisor dude wrote us back, and from how his second email, it now is clearer was he's talking about and it sounds like we're doing things exactly as we should. So, that's nice. At least we don't have to buy a car now or something just so ...I still don't like what the banks do here, but I'm relieved to think we're at least playing the game right.
Saturday, January 10, 2009
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4 comments:
It is kind of messed up. But remember, when you finally buy a house, that will be a loan that carries over and also remember that having a large amount in savings makes it easier to get loans too. They don't typically talk about that because most Americans don't even know what it means to save.
Fran, I agree. It's the stupidest thing, Jonni and I were equally annoyed at the whole ridiculous system!!! We are responsible because we know how to spend money we don't have. Whatever! What we've noticed is that you don't have to let credit carry over for now, but if you do want to increase your credit eligibility (or whatever it's called), you can ask your credit company to increase your credit limits. We ended up paying everything with credit card (and of course, paying it back by the end of the month), but bit by bit we got to really high credit limits (by playing the game sensibly). That should be enough to get you a nice practice loan for after school.
Franzi, I DO not think that having really high limits is the way to do it either. When REALLY applying for a loan, they also look at how much you COULD max on all your credit cards and if you could pay that AND the loan. It is also a reason to deny loans. Somewhere there is a fine line. I would seriously ASK DAVE!! Go to http://www.davesays.org or try over LDS Living - you can write him with questions.
My mom has expressed this same frustration. My parents paid off their mortgage in like 5 years (and didn't have any car loans or student loans left unpaid either). So 10 years after paying off their house, when they decided to move to Idaho. They owned outright a million dollar property (they got much more than they paid for it), Dad had a good income, they always paid their bills in full and on time. And it was nearly impossible to get a mortgage for the property in Idaho - because they lived within their means and therefore had no history of debt within the previous ten years. The best reason I can figure for banks not being thrilled to give loans to people who only spend what they can afford is that such people don't pay much interest - therefore their banks don't make much profit. Anyway take heart - my parents did eventually find a bank with someone with enough brain to realize that my parents, even if they didn't bring in a ton of interest, wouldn't bring a loss either - so they got the property in Idaho financed.
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