Your Financial Mindset Determines Your Ability To Handle Credit Cards

Have you ever taken a position on credit cards one way or the other? I have, and to only say I was passionate about my position, would be an understatement. Just ask J. Money!

I must start out by saying that some of you are going to feel as if I have lost my mind, and the rest of you are just going to be shocked completely about what I am about to say. Not because it doesn’t make sense, but because it is coming from ME. πŸ˜€

I am no longer the sworn enemy of credit cards. Yes, you read that right! I have softened my position on credit cards completely. I actually figured it out about a month ago, and only a few bloggers have had the opportunity to hear my thoughts on this.

Now I wanted to share my thoughts with YOU, my awesome debt-hating readers.

It’s not that I think that credit cards are any less dangerous than I did before, I have just come to the conclusion that credit cards are only that dangerous to a specific group of people. Yep you guessed it—people living beyond their means and swamped with debt. As I have accomplished and evolved more in my financial plan, I have come to realize that there are different levels of control, and financial responsibility. Depending on where you are in the process will determine whether or not you have the ability or the inability to use credit cards responsibly.

Based on my own experience, I believe that your mental state of mind regarding debt and money in general, determines whether or not having a credit card is a good or bad idea.

Your State of Mind is a Terrible Thing to Ignore

The Debt Mindset – This is the person that continuously month after month spends more than they make without ever blinking twice. They live on credit cards and have no idea how close they are to complete financial destruction. There’s always a reason that they have to spend more than they make and they pay very little attention to the details of their financial situation. Unfortunately, this is most of America, and it explains why so many people are struggling due to the recession. In this state of mind this person is less likely to admit that they are the reason times are tough. Yeah, you didn’t know you were going to lose your job, but that’s precisely why you should have prepared yourself for what life throws your way. There is no such thing as complete job security. Credit cards are WAY TOO risky for this person!

The Reality Mindset – This state of mind comes about because of a life-changing experience, like a job loss, health problems etc. It is also possible to just wake up one day and realize that your reality is not what you thought it to be, and the decision is made to make a real change. I would like to think that most people that are given a taste of reality realize that it is imperative for them to change their ways for good, but history shows us that people have a very short-term memory. They battle through the tough times, and then when things start to get better they go right back to their destructive ways. This state of mind is completely temporary though because when you are faced with reality, you have two choices. Do what you’ve already been doing with money and the debt mindset sets back in, OR you decide that enough is enough, it’s time to transform. Credit cards are STILL TOO risky for this person!

The Transformation Mindset – This is a person that is truly sick and tired of being sick and tired and they aren’t going to take it anymore! Spending more than they make comes to a complete stop and new habits start to emerge. Their attitude is completely different! This is where I would say we were at the end of 2007, right before we made the decision to get out of debt for good. One of the only New Years Resolutions that we have ever made that eventually saw the light of success. A person that is truly in this state of mind has way less chance of ever returning to their old ways, but it doesn’t mean they are home free. They have seen the light and their mission is to completely clean things up, but depending on their resolve risk is still in the air. That’s why this person is still a risk and not yet ready to handle credit cards either. Credit Cards are risky enough for this person to avoid until they are 100% sure they have changed.

The Secure Mindset – This is the person who has really fought hard to turn things around and the results are beginning to show. This person likely has no debt whatsoever (except for maybe a house), has a growing savings in place and things are really looking up. This is where we are now, and why I have been able to give credit cards a break from the guillotine. We have no debt, $7,100 in savings, and we are truly confident that even if we did have credit cards—which we do not—we have absolute control over our financial behaviors. This person has walked the walk and has developed an awareness when it comes to their financial situation. This person is no longer a spend-more-than-they-make risk, and could probably handle having a credit card or two with no problem.

Are My Observations Absolute?

Of course not, because there are always exceptions to the rule, but I think there truly are stages of financial responsibility. This is completely based on how I viewed the credit card issue, and where I felt I was at different stages of the process. Perhaps there are some that should avoid credit cards at all costs no matter how secure they see themselves. Sometimes self-control and discipline cannot be transformed. For everyone else, make sure you handle your credit cards responsibly if you are in a stable situation and feel you can handle them. As for me, we have not run out to apply for credit cards and we probably won’t. Where we are right now we just don’t see the need to do so. Two plus years without them and we are still alive and kicking, so we are just going to keep doing our thing. To be crystal clear though, I am adamantly against credit cards unless they are paid off each month in full.

Many of you know how I have felt, and I have even done friendly battle with some over this issue. Budgets Are Sexy, & Ask Mr. Credit Card immediately come to mind. πŸ˜‰

What stage are you in? According to where you were, and where you are today, would you say I am on to something or am I completely off my rocker? Let me know by sharing your thoughts in the comment section.

About Brad Chaffee

34 Responses to “Your Financial Mindset Determines Your Ability To Handle Credit Cards”

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  1. Penny says:

    As usual, I think you are right on. Having 4 kids under the age of 10 and being a stay at home mom, I have used credit cards as a convenience and to make money. There is nothing worse than trying to figure out change with a 3 year old screaming because you won’t buy them the checkout garbage they want. And don’t even get me started on getting 4 kids out of the car to go pay for gas. I know I could do all that with a debit card, but if something happens, its your bank account that gets frozen, not your credit. While building our house, we put 10% down on our appliances so they would order them. When the salesperson made the transaction, he put in the 90% number instead of the 10%. Of course it was Saturday and the bank was minimally staffed so they couldn’t cancel the payment. Thankfully we had some money in savings to transfer over quick and didn’t get any charges, but that was the end of regular debit card use for us.

    We’ve actually had a credit card company cancel a card on us as a “business decision.” (they were actually losing money on us so they no longer wanted our business) The key for me is counting a purchase in the month it is bought, not when it is paid for. I don’t even have a line in my budget for credit card payment as the money is out of the budget by the time I pay the bill.

    • Brad Chaffee says:

      I can definitely see the advantages to using credit cards. I think the main thing for people to be aware of is their ability to control their spending. Without that they are asking for trouble.

      Thanks for the GREAT comment Penny!! πŸ˜€

  2. I’ve been waiting for you to write this post. Not that I knew what you were thinking, but as you begin to really understand yourself and how you handle money it becomes very clear. The credits card are not what got EnemyOfDebt and DeliverAwayDebt into debt. It was our behaviors that did. Nobody held guns to our heads or forced us into debt.

    I’m not a fan of credit cards, but I understand their purpose and the benefits they can provide for someone. I can say that I have any interest in using one anytime soon (I haven’t used one in over 2 years), but I’m not going to say that I can’t change my mind either.

    They are a financial tool for the tool belt, that’s it.

    I’m glad you publicly came out, and NO you are not off your rocker. It just shows how much you’ve grown in your knowledge about yourself and all things related to finances.

    • Brad Chaffee says:

      You are very right my friend! As a personal responsibility advocate I understand that blaming credit cards for our debt is as ridiculous as blaming the table saw for cutting your finger off. With that said though, if you don’t know how to use a table saw safely then you should avoid it until you do. Likewise, credit cards can be used as a tool if used properly.

      As always, great comment Jeff! Thanks for stopping by and adding to the discussion! πŸ˜€

  3. Jan says:

    My name is ___ and I am an alcoholic. But I keep a bottle of booze in the cupboard because I am completely recovered.

    Nope. I know my limitations.

    • Brad Chaffee says:

      Good point Jan, and one that I made in this article. Some people should avoid them completely. πŸ™‚

      • Chad says:

        One problem is that many alcoholics deny that they are alcoholics. Seems most everyone I meet believes they are one of the few people that always pays off the balance and doesn’t spend more money by doing transactions with credit cards rather than cash. How many people that now have thousands of dollars in credit card debt believe it could happen to them when they made their first credit card purchase? I’d rather not deceive myself…no credit cards for me!

  4. I agree with you on this point, Brad. I understand why Dave Ramsey is so absolute in his stance against them because he really has to be black-and-white to provide clarity for his huge, impersonal audience…plus it provides a great promotional stance.

    We use a *gasp* rewards credit card for all of our gas and grocery purchases and pay it off in full each month. We get around $500 a year in cash rebates, and we’ve never paid a dime in credit card interest. I’m not saying this is that great of a plan and it’s certainly not getting us rich, but I also don’t think credit cards are inherently evil.

  5. Young Mogul says:

    There are also those people who have always been responsible with credit cards…..I received my first CC in college, just like most people. However, I have never understood how people go crazy with a CC *puzzled face*! EVERYONE knows it is not free money–despite their behavior–it must be paid back. I have never used CC for lavish purchases and I HAVE carried a balance on my card at differnt points in time.

    I recently paid off a rather large balance on a CC. I just completed renovation on a Hurricane Katrina damaged property. The renovation amount was to be reimbursed by the Federal Grant program, provided I agree to use the home for low-income rental property. However, the cost of renovation ran over the projected amount (as renovations always do) and my only recourse was to CHARGE about $6,000, until the reimbursement. I had the money in savings, but it was not completely liquid, so I made the decision to charge the amount. Additionally, I did not know how much the project would be over budget and I did not want to use my entire emergency savings in case of a different emergency, unrelated to the renovation.

    Yes, I paid a couple months of interest, but I also paid the CC off as soon as the reimbursement came through. I have always been responsible with my credit and would not dream of giving up my CC. I agree with you that some people should NEVER have a CC, but I, personally, feel CC can have value, if used responsibly.

    • Brad Chaffee says:

      People such as yourself are a rare animal indeed. With studies showing that anywhere from 6-8 people out of every 10 living paycheck to paycheck I think it is safe to say that most people fit into the four categories listed above.

      Trust me I know how renovations can add up and add up quickly! Now if I found myself in your situation I would be sure to steer clear of using a credit card to pick up the difference, unless of course it was a business credit card and a business expense.

      As a business expense I still see it as a danger. I feel a business should be run just like the personal finances should be. The business should have an emergency fund of 3-6 months of expenses in place to cover those kinds of emergency situations.

      Whether I ever use a credit card again in my life is a mystery at this point, but one thing that I am absolutely sure of, is that I will not be putting any kind of emergency expenses on it, and spending over budget on a renovation deal, although very common, would be coming straight from my business emergency fund.

      To each is own though I am just glad you were able to get it squared away within a couple of months. for some people that could have turned out to be a tremendous burden.

      Thanks for the great comment. I appreciate you taking the time to share your thoughts on EOD so often. It’s always a pleasure to see a comment from you.

  6. Panda Mike says:

    I actually use my credit card for each single purchase of my day (starting from my $2 coffee).

    I have stopped seeing the credit card as a debt tool and start seeing it as a transactional tool. If you pay your credit card on a monthly basis, you will only get the cards benefits:

    – reward system

    – transaction free of charge

    – extended warranty

    – building a strong credit history

    • Brad Chaffee says:

      Thanks for the comment Panda Mike! I have adjusted my outlook of credit cards in the same way, but also realize that there is a tremendous need for people to avoid them until they get things under control. Most of the people I refer to are the ones that have absolutely no savings and are forced to use credit as a crutch. that being the debt tool you mentioned, is the dangerous side of credit.

      I am also curious. When you say a credit card has a benefit of extended warranty, what do you mean? How does a credit card give you extended warranty benefits exactly?

      Thanks for stopping by! πŸ˜€

  7. ctreit says:

    JD Roth recently “admitted” that he did not live by a budget anymore. I think there is nothing wrong with growing as a person and also growing as a financial entity. As you and your life changes, you got to change with it. There is not one personal finance rules that applies to all people all the time.

    By the way, we have developed a nifty little tool that gives you a glimpse of your relationship with money.

    • Brad Chaffee says:

      Yeah I think I actually saw that “coming out” post, but I personally don’t see how anyone could just blindly manage their money. To me if you own a business you wouldn’t stop keeping track of your expenses because you need to know the details. Why would it be any different for personal budgeting? πŸ™‚

      I do see how the budgeting process can become smaller and smaller as you gain control of your financial security. In other words, a budget for me 20 years from now might not be as robust as my current budget, but I still can’t see not doing one at all.

      Maybe one day 20 years from now I will eat my words and realize the same thing J.D Roth did. LOL Until then though I believe a budget is essential.

      Thanks for sharing the link man! πŸ˜€

      • ctreit says:

        JD says that he is still keeping tabs on his spending but more from a top level. He no longer counts every penny. That is what my wife and I do, too, and it is working very well for us. Of course, at one point we also accounted for every penny we spent.

  8. Stephan says:

    i think it really hurts the consumer when people say credit cards are all bad and serve no legitimate purpose to average consumers. If paid off each month in full, they DONT hurt your finances. All you are doing is getting an interest free loan from the credit card company until the bill is due. if you can control your spending to what you can afford, i say use cards as much as possible because you get interest free loans and rewards by using them.

    • Brad Chaffee says:

      Actually Stephan, I have to disagree with the first part of your statement.

      I would say that it doesn’t hurt the “average” consumer because the average consumer is up to their neck in debt. I think for the average consumer the danger lies in making credit cards seem easier to manage than they actually are. Most people have bad financial behaviors and cannot handle credit cards and really should avoid them, even if only for a short period of time.

      To the people that already understand that spending responsibly is necessary when using credit cards, there is no danger at all because they already know. I don’t think there is a shortage of people in this country that are harmed by the use of credit cards, via their own behavior, so I disagree that it harms the consumer. If anything it should be seen for what it is—a red flag to irresponsible spenders.

      There are still dangers involved in credit card use and many things a person should have in place before using credit cards as a “tool”.

      If most people weren’t buried under mounds of debt I think your statement would be spot on. Thanks for contributing to the conversation! πŸ˜€

      • Stephan says:

        Ya your right brad, the problem is people in general dont have any PF knowledge or at least not enough to make the right decisions. I think these PF blogs are a great way to start educating people, but i think more needs to be done, in high school, college, and most importantly at home, so that the next generation of consumers dont fall into the same debt trap!

        • Brad Chaffee says:

          Amen to that! The word needs to be spread and the blogging community is doing a great job but much more is needed. I saw this article last week and it proves your point. Not only are average people in general not knowledgeable, but even educators are not knowledgeable when it comes to money. It’s really no surprise to me though. Check it out: The Color of Money: Parents must play role in teaching financial literacy

          Who decided that financial literacy was not important enough to be made mandatory like Math and English? They obviously had a screw loose when making that decision. πŸ™‚

          • Penny says:

            My question, though is what would teaching financial literacy really mean? All I can really think of is:
            1. Don’t spend more than you make.
            2. Be sure to save for a rainy day.

            Kids and adults tend to spend the money they some day plan to be making, not the money they are currently making. It defies all laws of common sense, but people do it every day. As the old saying goes, you can lead a horse to water, but you can’t make them drink. You can teach financial literacy until you are blue in the face, but you can’t convince kids to live it.

            There is a huge backlash every time government tries to force this on people. Look at how many people got mad when the government made a law basically saying that credit card companies have to make your payments large enough that you will eventually get out of debt. Seems common sense to me that you have to pay more than the interest added, but people didn’t realize it. I know somebody who was happily paying $50 a month minimum on 6 cards. Thats $300 a month. With the new law, those payments went up to thousands each month. Whose fault is it? Not hers, its the governments fault for making such a stupid law.

            To be fair, much like I don’t want the schools trying to teach religion, I’d rather they not try to teach my kids financial literacy. All I have to do is see how highly they regard college loans to know I’d rather teach my kids myself.

          • Brad Chaffee says:

            I tend to agree with you Penny as far as the Government getting involved in things they shouldn’t. However, I think that financial literacy is as essential as learning English and Math. Perhaps the reason people have been so irresponsible for so long is because the schools aren’t teaching something that is vital to financial success in our lives. I definitely agree with the part about the schools not teaching religion, but I think this is much different than that. Religion is a spiritual journey that many people decide for themselves what they believe, but learning about money is more of a life skill. If we’re going to let the schools teach Evolution as a fact, then we should allow them to teach the financial basics; balancing a checkbook, the importance of responsible borrowing, the dangers of debt, how to do a budget, the power of marketing, importance of saving, what compound interest is, and how to become an informed buyer.

            BUT I do think that it is more up to the parents to go into more detail about why debt is bad, how credit cards can be very bad to have if you’re not careful etc. I don’t want the schools telling my children that debt is okay, but I do want them to teach about the dangers that debt can cause. Maybe kids wouldn’t listen but if we didn’t teach things because we didn’t think they would listen anyway then what’s the point of school? You are definitely right that you can’t force a dying horse to drink but you sure can show him where to drink from, and in my opinion that’s better than doing nothing.

            For the record, I thought that the Government stepping in to SAVE THE CONSUMER was just one more thing that the Government should get their nose out of. Government regulation, even with good intentions, teaches the public absolutely nothing except for the fact that the Government will save them. The beginning of personal responsibility and self-reliance being removed from the mindset. Not to mention the unintended consequences that are produced because of such regulations. (As your example about the credit card minimums going up suggests)

          • Penny says:

            Don’t get me wrong, I do see validity to teaching financial literacy. I just don’t at all see how schools can in practicality teach it to kids. So much about finance is also about your value system. Anybody who can add, subtract, and read can balance a checkbook, but that doesn’t mean that they will.

            My 9 and 7 year old both understand that when I use an ATM to get money or my credit card for a purchase, the money is really coming out of my bank account. This was explained to them the first time they wanted me to use either option to pay for something they wanted when I said I didn’t have the money for it. They each have a savings account that they put money into. They both are saving money at home for spending money on our next trip. When they want to spend money on something, I’ll ask what is more important, that item or having money to spend on their trip. I think they truely get it. But they wouldn’t get it if they didn’t hold the money. Schools can’t give the kids real money to “play” with while they learn.

            I did have a consumer education class that I was required to take in order to graduate high school. The program was cut becuase when they looked at it, our kids weren’t fairing any better in the real world than kids who didn’t have the class. Of the things you listed that should be taught, the only 2 that weren’t overly touched on in the semester long class were the importance of responsible borrowing and the dangers of debt. How could you teach this to high school seniors while helping them fill out financial aid papers to get loans to pay for college? After all, the more graduating seniors you can get to attend college, the better your school looks.

            Reading this and thinking on this, does give me an idea for a parent workshop at the school for next year, however. Just as children who see their parents vote are more likely to grow up to vote, I’m sure children who see their parents balance their checkbooks are more likely to balance their checkbooks when they grow up.

          • Brad Chaffee says:

            Yeah you do have a point there. Teaching kids about the dangers of debt and then showing them how to fill out student loan papers. Personally, I think that the school should not even be anywhere near talking to kids about student loans. When it comes to those type of arrangements, I think that when it comes from the guidance counselor or any school figure it validates it in the child’s mind and they have no idea of the trap they are signing up for. I do remember my counselor talking to me about student loans as if they were some sort of magic beans or something. Not once did they say anything about the dangers of debt.

            I like your idea for a parenting workshop too. That sounds like it could work. You are right in that the parents are the key. Just like with normal academics, if the parent doesn’t follow up then the teachers can’t force a child to learn. The parental example is essential. sadly too many parents look at the schools as a babysitter as well as a parent when the kids are there. VERY sad.

            I think it is so wonderful that your kids are learning the value of a dollar. My son is only 4 years old and I am working with him on the same concept. He doesn’t quite get it yet, or I should say that it doesn’t keep him from asking for a toy at the very next store, but he will understand the more I work with him on it. You are doing your children a great service by preparing them for the reality of financial life. I wish more parents would understand its importance. πŸ™‚

  9. I love the way you’ve framed this, and I think you’ve hit upon the biggest stumbling block to financial improvement: our attitudes. It’s hard for people to change if they don’t even realize they have a problem.

    I have to say that we never really were at the Debt stage, but over the years we have progressed through all of the others. Today, at 40, we are at the secure stage. We have only a small amount left on our mortgage. However, job issues over the past couple of years have made us feel a little less secure.

    But having experienced that transformation years ago, we are willing to do whatever it takes to avoid increasing our debt levels. So far so good. Our budget cuts and emergency fund have kept us from taking on any additional debt.

    As for credit cards, we have a few, but really only use one. We get points to use toward groceries, there are no fees, and we pay it in full every month. Thanks for the great article! πŸ™‚

    • Brad Chaffee says:

      Thank you very much Balance Junkie for the kind words and I am glad you enjoyed this. the truth is when I was writing it I was kind of worried about it sounding like a “holier than thou” post. It doesn’t seem to have been taken that way thankfully. I always enjoy hearing about people who were able to avoid the debt stage of life, because for most people it’s the only stage they know. Now that I am out of it I can’t imagine ever going back. Debt freedom is awesome and totally worth the sacrifice that it takes to achieve it. Thanks for stopping by and I hope to see more of you around here in the future. πŸ™‚

  10. This is where I totally agree with you 100% Brad. I’m personally not against credit cards, in fact I own 2 myself. However, I a few rules that keep everything in balance for me. I always payoff the balance every single month. Second, I always pay cash when possible, in fact I only use one card for buying gas which gives me 5% cash back and the other card is just for online purchases. Other than that I never use them cause I know how addicting they can be if you let them get out of control.

    • Brad Chaffee says:

      Right on Chris! The person with the credit card has to know their limitations. If they can’t behave then no credit cards for them, otherwise go for it. πŸ™‚

  11. James says:

    i am at the point where, if i can’t pay for it in 30 days, i won’t buy it.

    your financial well being is a very importance piece of your overall success.

    if you can’t afford it on a 30 day hedge don’t pull the trigger keep your credit card in you pocket.

  12. Jenn says:

    When we were first married and I was still in university and not earning an income things were tight financially. Once in a while we did put an unexpected expense on a card for a couple of months until we could scrape together the funds to cover it. It soon taught us the value of an emergency fund. Once we’d paid off one of these expenses we continued to scrape together little amounts an tuck them away for future emergencies. We never again resorted to floating things on the card. Fortunaltely we never had so many emergencies that we got into a lot of trouble and we came out of that period of life much wiser.

    Twenty years later and mid career we live very frugally compared to our family, friends and peers. Yes we make good salaries, but we live on about 55% of our take home pay. We buy used cars with cash, shop at thrift stores, meal plan, rarely eat out, pack lunches etc etc. Basically we do all the typical things PF sites recommend. Travel is our one big splurge though, and we take a big trip with the kids every other year. Generally a month long and on another continent.

    At this point in our lives, being frugal and knowing where every penny is going is such a habit that there is no concern about using credit cards. We put EVERYTHING possible on our card to get the flight miles. I’m frankly annoyed when I can’t use my card for something. To me it’s lost miles toward the next trip. Since there is no risk of us spending beyond our means or even spending more because it’s going on the card, to me it’s just a method of funding our travel. Our phone, cell, internet, alarm monitoring, and life insurance all go on the card automatically every month. They used to come out of the bank account automatically. All our groceries, gas and miscellaneous purchases each week are put on the card. We used to pay home/car insurance monthly by automated payment from our bank account. By paying the entire year in advance we can put it on the card. Yes I’ll take those 3000 miles, thanks very much. New tires for the truck last month? 1000 more miles to pay with the card instead of cash. SInce our last trip in 2008 we’ve once again earned enough miles for all four of us to fly to Europe this summer.

    Once you have your financial house in order a credit card can be a wonderful tool for getting more for your dollar than just the product or service you are buying. Why wouldn’t I take the flight miles (or cash rebate or whatever your card offers) if it’s costing me nothing. I pay off my balance WEEKLY and have never paid a cent of interest on the card. I know I don’t have to pay weekly but I like to balance up the actuals that have been processed with my spreadsheet of planned spending. I replace the estimated numbers with the actuals, add any unplanned spending and see what’s left over for the week. Every Friday once the pay is received and the card is paid off I skim off the “excess”. Every week any unused funds are immediately redirected to either retirement savings, kids education funds or extra mortgage payments. By paying off the card every week I kind of see it as a debit card that takes a few days to clear the bank. We generally do all our shopping on the weekend and I pay it off on Friday once everything has been posted to the CC website and I can double check the charges. As soon as I use the card I consider the money spent and gone, it will just take ~5 days before the cash actually leaves the bank account. I also find clearing it on a weekly basis is a quick job. If I had to do a month’s worth of transactions and updating to my spreadsheet it would feel like a much bigger job.

    Great article. It’s always interesting to see how others “work” their cards to maximize the benefits.

    FYI – regarding the post by Panda Mike and your question on extending warranties – some cards include extending the standard warranty on your purchase just for buying it on the card. When we bought our washer and dryer they came with a 2yr warranty. That was automatically extended to 3yrs according to the policy on our card. We never needed the extra year but it’s a nice feature. Other cards offer an insurance type feature. My inlaws once bought a glass topped coffee table. The glass top got broken as they brought it home from the store. No problem, the credit card had an insurance clause that covered the replacement glass. Our card also offers basic travel insurance and coverage on rental cars paid for on the card. You need to read the policies carefully though and determine if it’s enough coverage. On our last trip we bought additional travel insurance to suppliment what the card provided, but it still reduced the overall cost.

  13. Mickie says:

    This is a rocking post! And the comments are just as great – definitely digging the conversation! For me, the best part of this is the break down of the different mindsets. But just as hard as moving from a “debt mindset” to a “secure mindset” is the reverse. I had the unfortunate circumstance of being laid-off and subsequently unemployed for over 3 years. I kept afloat off my savings and investment funds for most of that time, and then had to make the conscious decision to slowly go into credit card debt so that my liquid funds didn’t disappear entirely while I had no active income. That was like having my arm cut off it hurt so much.

    Then, getting back on track after the fact was a journey back through financial pain – Your mindset list is a perfect outline of what’s what. I’m telling a lot of people about this simplified list. It may not be absolute, but it’s a good place to start if you are looking for some guideance!

    • Brad Chaffee says:

      Thank you Mickie, I m so glad you liked it! πŸ˜€

      I’ve learned over the years that almost nothing is absolute about personal finance. LOL I thought it would be helpful to create a starting point to work from based on where each person considered themselves to be right now.

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