Popular teaching about personal finance encourages people to concentrate on credit scores, cheap credit, and credit cards. Essentially, it assumes you will live in debt forever. It does not mention the single, key, controllable element in personal finance—individual choices that decide spending, and lead to financial results.

Two Approaches to Personal Finance

We can view personal finance in two ways. The usual approach teaches how to use credit cards, and how to maintain a good credit score. Or, the method I apply that encourages people to strive to live debt free lifestyles.

In the first method, you can get a great credit score, and maintain it always. But, what does that mean? It means you have been in debt, you have stayed in debt, and you repaid your debts as required. You didn’t add much debt, and most importantly, you are not paying off too much debt. Do you get it? You became a slave to debt! That’s what the world tells you, and most folks tell their children. Isn’t this absurd?

I practice and teach folks to avoid debt. I suggest we save, and then buy. As well, if we must use a credit card, use a secured credit card. To buy a house, save a downpayment that fits in the household budget, then buy when you can afford to buy. Most significant, rent when you can’t afford to buy.

Teaching Children Personal Finance

How do we teach prudent stewardship of money? Who should teach our kids about personal finance? Many parents have bought the asinine money management idea mentioned above, and they live in debt. They believe personal finance means getting a credit card as early as possible to develop a credit score. Instead, they should be saving most of the funds they get from governments for their children. And at an early age, teach the children to give, to spend, and to save. Most people I know teach their children to save. They don’t teach them how to spend and make wise spending choices.

Sadly, many schools now teach personal finance to our children. They teach the bizarre credit score approach, and so our kids have fallen in the vicious debt trap. Students take on thousand of dollars of student loans as if its normal. Sadly, when reality hits after graduation, they complain and continue the debt path.

How do we confront this challenge to change our views to the prudent debt free approach? It starts with parents realizing debts’ bondage and deciding to be debt free. First, pay off your credit card debts. Next, save to buy major items, such as a stove, washing machine, and a car. This new direction will take time, but every journey begins with a single step. Most of all, live without credit card and other consumer debts.

Will you take the first step and decide to get off the credit score, perpetual debt, train?

© 2106 Michel A. Bell

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