Common Sense Millionaire
Common Sense Millionaire
EP 22: Money Skills: First Understanding, Then Applying
Remember the first time you wanted something so badly, but had to settle for less because of the money?
In this episode I dive deep into my experiences, the lessons I learned growing up, and how they shaped my understanding of money today. There are layers to credit history and an art to mortgage applications. By the end of this episode, you’ll have learned the key strategies to cultivating a healthy credit profile, understand the mortgage application process, and know how to get through money struggles and still win.
We'll also discuss the hidden costs of our everyday habits like the apps we download and the impact they have on our money health.
Managing money is a life skill we all need to master!
Thank you for listening to The Millionaire Mindset Podcast with George Dines.
To connect with George visit www.georgedines.com
To Schedule a call with George visit: https://georgedines.com/contact/
Welcome to the Common Sense Millionaire, where we work to promote your financial advancement in knowledge process and education so that you and your family become financially secure. This is the place I share Common Sense Action Steps that you can take today to assist your financial advancement. So sit back, grab a drink and let's get started. Common Sense Millionaire here, welcome back. We're going to talk about something today that I think is extremely important, that is totally missing from all of our school experiences, and that happens to be financial literacy. We have no clue. We have no clue how financial information is collected. We don't have a clue about where money comes from. We don't have a clue about how do we save money, how do we do budgets. We just are at a complete loss about financial literacy. We don't ask for it, our parents don't ask for it and there's no faculty allocated to do that. Some schools have teachers allocated to teach something called industrial arts. Maybe you learn typing or some other clerical aspects of work, but you never learn anything about financial literacy and how that can help you advance.
Speaker 1:I remember I wanted to go out for the basketball team, and so I think it was junior high. I don't think they call it junior high anymore. But I'm older now and I went to try out. What I wanted to wear were some converse sneakers. I wanted those sneakers with the star on it, the Chuck Taylor converse sneakers. Right now those are like look back items, but back then, my God, if you were getting close to that teenage thing and you could afford it, you wanted to wear Chuck Taylor's. That was the thing. There was no Adidas or any of this other stuff that's out there. So I asked my parents. I said, can I get the Chuck Taylor's Back? In that time they were like $7.50, if I'm correct, and I just remember my parents saying, no, you can't have that, but you can have these other ones. Then they were like $2 from what I called one of the Z stores I think the name of the store is there. It doesn't exist anymore. Somebody listening to this knows there and so I had to take the $2 one if I wanted to get on the wood floor to try out for the team. And I never forget how, when I walked on there, everyone was laughing and they were laughing at me because I had the $2 shoes on and I didn't have the Chuck Taylor's on and I was like, oh damn, this is embarrassing, but I didn't understand the reason for that decision. It was because my parents were financially literate and understood the difference between spending $7 to $10 on a pair of shoes versus $2 on a pair of shoes, which makes absolute sense today, but it didn't make sense back then, when I was in junior high school and trying out for the junior high team.
Speaker 1:So what I figured out from this which is what parents really wanted me to understand is that you can have things, but you got to work for them. So I started a lawn business. I only had three customers. I didn't have a car, so I had to push the lawnmower or use the lawnmower that they had on their property because they had some weird grass growing. I had a couple of clients like that and that was my extra work. So I worked on Saturdays, got the lawns cut and collected my money and learned that, hey, I earned money and now if I want to buy the $7.50 Chuck Tail or Converse, I could. But later on I learned it really wasn't worth it, because if you were really athletic I also played tennis at the time and you had to have the tennis shoes, so you couldn't wear Chuck Tailors on the tennis court and it just didn't work out.
Speaker 1:That's kind of the story of most people's financial life that you're caught in a bind as to what are you going to spend your money on and how are you going to spend it, and at the end of the day, either you had to make more money in order to spend more money on items that really you know were they really that necessary? And that's the problem going on right now in our schools. Kids have no clue about money. They don't understand it. They don't understand the impact of all of these apps that they have on their phones and not understanding that the incremental cost for adding an app is equal to X. And they could have hundreds of apps. Maybe they're not all charging 1099, but they're charging some type of money and we're not teaching that to the kids at all and for the most part, we're not teaching it to adults.
Speaker 1:That's fairly evident if you look at the foreclosure rates on homes, if you look at the escalating foreclosure activity related to car purchases in the United States, how can somebody sign a note for a car where the car payment is $1,200 a month? That just doesn't make any logical sense and what happens is people do that realize they can't afford it foreclose on the car, they may drive it back to the dealership they were they brought it from, or they just stop making payments and the truck comes out and picks it up. So not only do you not have a car, you just screwed your credit history and you're going to be flagged because you screwed your credit history on a car. So that means that your rate for the next car that you're going to try to purchase is going to be even higher and your overall credit profile will decrease. I don't know how that works with most people, but it's rather annoying. But once a month I get an email from my bank telling me that my score either went up a point or went down a point. Okay, you know what up a point, down a point, whatever. But imagine your credit score declines precipitously to a number that is not known as good. You're screwed.
Speaker 1:Now someone needs to understand and teach folk how to use credit to their advantage. I have credit. I use it to my advantage. I use it to my advantage to get a ridiculously high credit score, and when I first saw how high it had gotten, I actually kind of laughed. Okay, but you can do that. There are strategies you can use okay In terms of how to support your financial health within the cluster I call it the cluster of financial agencies throughout the country and actually all over the planet. So we need to learn how to manipulate credit so you can get a high score, so you can get a normal loan rate for whatever you're trying to purchase A car, a new roof or whatever. We'd be glad to work with you on that. You can get in contact with us and I think we can probably help you out.
Speaker 1:There's so many mistakes we make, for instance, having too much credit use on one card versus the other. So the credit agencies are looking at what's the percentage of the credit that you have available that you've used. So that's one big number and then they look at how much have you used on a particular card. So if you've used 70 or 80% of the available credit on a card, your credit rating is gonna take a dip, okay, because you're entering the danger zone where those entities get worried that at some point you may not be able to make payment. So there's a game to be played with this to maximize your opportunities when you're shopping for a new home, when you're shopping for a new car or any other thing like this.
Speaker 1:Also, what do you do when you put together applications for credit for a mortgage? Okay, who's telling you how much you need to put down, or do you need to put anything down? How do you know? Most people don't understand the components of that mortgage and what happens if you can't make the payments. No one's teaching you that. I have to talk to people about this all the time. Also, how do you start building a credit history? That's really important because the longer you've had credit, the better your profile is going to look.
Speaker 1:That caused initial issues for me, because for a long time I was totally out of the credit world. I was just cash. I was done with it. And the thing that made me done with it when I saw that, when people saw you were having issues, they would, in essence, refinance the outstanding credit that you had, but it was at a higher rate. I was like this is ridiculous.
Speaker 1:So for me, the issue was I had not had long-term credit exposure, but that we can work with. We can come up with strategies for you so that things can come out better and you have a much better outcome. So if you wanna call us, just give me a buzz, be glad to help. And the other thing you can do is, if you have kids, you can talk to your school district or the school that your kids go to and ask them when are they gonna implement a financial literacy curriculum? Thanks a lot. You've been listening to the Common Sense Millionaire, where you can learn how to go from zero to a million using Common Sense solutions to everyday financial issues. Make sure and subscribe to stay connected for more content, tools and help so you can advance towards your financial goals. If you need assistance or have questions, leave a comment or you can email me at George at commonsensemillionairecom.
