When Life happens (Murphy’s Law)
Murphy’s Law definition:
The rule that states, “If something can go wrong, it will.” An addition to this law reads, “And usually at the worst time.” The identity of “Murphy” is unknown, but the saying was first used during the 1940s.
So why mention this is a credit repair blog you ask?
Life of course…..
However in relation to credit which is my specialty and I can state I am an expert in the matter I want to talk about things I see that may be able to help you avoid people like me for this particular situation.
Starting out on the subject of life many times if you are making a certain amount of money ( or finally do ) for your income you start making a lifestyle that fits that income.
Many times I have people coming to me who end up paying the minimum amounts on these credit cards due to fact of several possibilities such as:
- Income was cut either your own or a spouses
- Job loss so not making what you were & took time to find another job so playing catchup.
Both of these are life changing events unless you have a healthy amount of savings tucked away that you can tap into to cover bills until your back on your feet. No one likes dipping into savings but at least it’s there.
Many people do not have this option thus the domino effect starts.
As a life example many, many many years ago (probably longer than I care to admit) I joined a direct sales company (aka: network marketing) they became publically traded and was solid so I joined. And actually they had a product a few years later which became the catalyst for getting me into the credit industry.
Regardless of those details I met an airline pilot for a major airline and we became friendly. This was around the time that the airline filed for chapter 11 bankruptcy and many were laid off and incomes cut. At the time he was making $300,000 a year and was cut 30% to $210,000.
When he told me that the look on my face at the time basically said, “Yeah, you still make over $200,000 a year”.
He saw the look at you could tell it wasn’t the first time and said the problem I have is I have a lifestyle that needs a 300k income to support.
SO THAT IS TODAYS BLOG TOPIC FOR THIS WEEK!
Many times I have clients come to me with so much credit card debt it sometimes blows my mind. I have seen some credit reports with people owing $7,000 to Macy’s or JCpennys. And I think how can you buy so much from a clothing store or let it get to that high an amount?
Ultimately it comes down to discipline. Many consumers just do not have it and it’s something you may need to work on if this blog applies to you. You cannot negotiate with the credit card companies as they have all the leverage.
If you want to settle with them for less you have to trash your credit. Until they have not received a payment for 90-120 days they will do nothing to help you.
I have a friend who lives paycheck to paycheck and have all of her credit cards maxed out so she is a good example of a possible game plan. She finally got a standard 3% raise which only gives her an extra $50 per paycheck but it’s better than nothing.
Her company finally put together a bonus plan if they reach certain goals set for them.
She hit them 2 months in a row totally at moment $1,200. She needed to catch up on a few things, treat herself as well and put a money back into a separate account to start building her savings again. I explained to her which she hates when I do this but she knows it’s needed, if she gets an average of $600 per bonus and does that every other month at least but she expects to hit that every month she needs to put half of the bonus in savings and the other half towards her credit cards starting with the small cards first to get rid of them quicker.
She has 3 credit cards with approximately $600 on each. So within less than six months she can have those 3 cards paid off. Then when she gets excited at how that is progressing she may decide to start taking the full bonus towards paying the bigger one and have that one paid off in a few months.
In her situation she could have all of her credit cards paid off in a year depending on her discipline and goals.
Now in order to get her to focus on that goal other than the freedom of no credit card debt she has a certain car that is her dream car.
I told her after assessing her finances that these cards are paid down her credit score will jump up tremendously and she could qualify for that car easily.
NOTE: it’s going to be a 1 year pre-owned which she won’t care about as the mileage will be low and will still be exactly what she wants.
This is what you need to do to yourself. Other than being debt free you need to have an additional goal or treat if you want.
Many times it is just not enough, everyone will be different so it has to be something you want so you have to decide on what will give you the determination to be discipline enough to focus on paying down your debts.
As I always say to all future credit repair clients, “I will tell you the truth whether you like It or not”. One of the reasons why I have such a good reputation in the industry is I’m honest and direct.
That combination is not really found in our industry, plus combined with the fact I have been doing this over 12 years the odds are if I can’t help you can’t be helped in the credit repair industry so I may need to guide you towards a different professional to do what’s best for you and your family.
Want to learn more? Contact me at the email below to buy my book “The Real World of Credit” or go to www.bn.com and get the digital version.
Any questions just contact me on the number at the top of my website or email me at: firstname.lastname@example.org