Money Lessons from 2 Countries - Chapter 3

This week I have decided to talk about the way people purchase stuff in both of the countries where I have lived. When you read this, please keep in mind that things have changed in Romania in the 3rd millennium and I have lived in the US since 2002. I would like to talk about the money habits I have observed in the adults that surrounded me growing up, as well as in my friends who still live in Romania, and who are now adults. 

When I talk to American friends, even now, about the ease of getting credit (especially via credit cards) in the US, they are surprised to find out that I had never even heard of a credit card while growing up - outside of movies (if that). I remember being fascinated by the amount of mail people found in their mailbox in the movies while I went for many weeks between letters from penpals around the world - in the world before the internet. After I moved to the US and I told this story to friends here, I found out that most mail consists of junk and bills. So my fascination with it died a quick death - especially once I started getting my own junk mail. 

Even now, when the banking system in Romania is much more developed compared to the 1990's and especially compared to the communist regime, there aren't many credit cards around - besides, most people still use the good old, hard cash when paying. Many of the mom and pop retail places don't even deal with any plastic. So if you believe in supporting local businesses, you don't really have a choice but use cash. 

When I first moved to the US, I had to figure out first what a credit card was, then what a credit history meant. I came from a country where you got a loan for a big ticket item, like a house, based on the fact that you had a steady job with decent pay. Nobody has a credit history somewhere for lenders to see, and a credit score is a foreign word - literally and figuratively. Getting my first credit card was exciting - event with a $500 limit, not because I could spend more, but because someone (albeit be it a big bank) believed I was trustworthy enough to have access to $500 that were not mine.

Of course, in the passing years, I learned that I wasn't that special, since almost every young American who turns 18 has the opportunity to into as much debt as he/she wants to. I found out that credit cards are a necessary evil if you want to have good credit - which allows you better interest rates on things many people can never pay cash for, such as a house or a good car. I also learned that they can get people in a lot of trouble because they show you there is money to be spent, even though it is not yours and you have to pay it back - with interest (and what an interest). 

If I didn't scare you with all this talk about credit cards, we'll talk some more next week.

Prosperity Mindset Month - Chapter 1

This is the month when many lives change in the US. Whether it is the college graduation that launches the new adults into the real world, or the wedding that unites the lives of two people (formerly single), May is a month of changes in many lives.

I will apologize right now for playing the role of Debbie Downer! Since this a blog related to finances, and especially to YOUR relationship with money... we will talk about the increase in personal debt the month of May brings about: student loans that now need to get paid, wedding expenses that add up to a high balance on your credit card if you didn't plan it right, and maybe even a new mortgage if you timed your home purchase with your wedding.

Since we already learned that we always eat an elephant one bite at a time, we will tackle one of these scary debts in this first post - stay tuned next week for another exciting episode (LOL). Today we will talk about the student loans, and some information that may help you pay them down faster, or at least to plan appropriately for when you can be rid of them.

For those of you who are the parents of students, please think twice before co-signing on the student loans. Now, please don't get offended, and don't accuse me of not being sympathetic to your desire of being a great parent and helping your child financially. If you can provide the capital for them to go to school, by all means, do so. Even if you want to take on some loans to help them out, that is entirely your choice, and I can respect that. 

Having worked in the financial industry for more years than I care to acknowledge (since I'm still 25 years old), I have met a lot of people who have put their retirement in danger by taking on loans they could not really afford. If your budget doesn't suffer by adding another monthly payment (such as a student loan payment), then by all means, take on a loan for your child. Otherwise, please consider helping them in other ways that don't risk your ability to retire. One idea for you is to check out some grants offered by smaller organizations in your area. If you are not familiar with such organizations in your town and still have some time before your student goes to college, please consider reaching out to organizations in the community; it will be an opportunity to meet some great community leaders.

One great resource that I came across while watching Shark Tank (valuable resource for entrepreneurs) is an app called Scholly - provides a list of many organizations and companies that provide scholarships. This can cut down on your research time. 

Please feel free to share in the comments any resources you have that can help another un-broke woman with money for college and limit the amount of student loans.   

My Credit Score Valentine, What You Should Discover Early On About The Person Your Dating!

"Your credit report is your financial report card and your credit score is your grade. Together, they show if you've got your life together," said Chantel Chapman, Financial Fitness Coach with Mogo. "Let's say you're in a relationship with someone and you want to buy a house together. If your credit rocks and theirs sucks, that might not bode well for your future together. And sure, you're probably not-and you shouldn't be-picking a partner based on their net worth, but it is important to be aligned with someone who has habits and goals that are on your level."

As Mogo explored ways to talk to their largely millennial audience about financial fitness, they discovered fascinating parallels between relationships and money, and decided to explore the connection further. Partially inspired by recent Federal Reserve Board research examining the link between credit trustworthiness and trustworthiness in relationships Mogo launched a survey in December 2015. They asked questions such as "Do you know your significant other's credit score?" and "If you found out your partner had bad credit, what would you do?"

Key survey findings:

• 67% of replies claimed to favour an awesome credit score over model good looks
• 50% of people in a loving relationship admit to NOT knowing their partner's credit score
• Finding out that a significant other is scoring low isn't a deal breaker: 87% of respondents said they would actively encourage their partner to fix it
• 40% of respondents think you should know your partner's credit score before you move in together:
  • 20% think you should know before buying a home
  • 15% think you should know before getting married
  • 2% think you should know before having sex
• 6% of respondents said you should ask your date about their credit score during the first few dates

Tips on how to bring up the "credit talk" while dating

Chantel Chapman, Mogo's Financial Fitness Coach, advises that those in the dating scene should have the talk early rather than wait too long. She offers these additional tips for having the "credit talk":

Before you have the talk, start looking for signs that indicate that your partner might not be on top of their credit. Things such as: they're really disorganized, they're forgetful about dates and deadlines, they get a lot of phone calls that they don't answer in front of you, among others. If you notice these things, you should probably have the talk. But either way, you should definitely have it before you combine finances/get serious.

Know that finding out your significant other has a low score is an opportunity to educate and become closer. 87% of survey respondents said they would actively encourage their partner to fix it and only 2% said it may be cause for breaking up. There's a lot of information out there; If they love you, they want to help.

Big earners may not equal great credit. Don't be afraid to ask, even if you're dating a big earner. They might make $150,000 a year, but are they responsible, and how do they handle their money?

It's not about the score… or maybe it is. You want to connect with someone who can respect your financial values. A credit score is a great indicator. Think of it as a shortcut to understanding some one's values and everyday habits.

Need more information on how to turn your credit score around? Looking for more tips on financial planning for your future? Email Me to set up a meeting to discuss how you can have the perfect score before or after you marry!

Thanks to SOURCE Mogo Finance Technology Inc for the research and information for this article.