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Living Without Credit

Living Without Credit
Living Without Credit

    Picture this: I’m 18, going to college, living 3,000 miles away from home. I stop in at a music store and fiddle around with one of the keyboards there. It’s nice. I strike up a conversation with one of the salespeople. He’s nice. He asks if I’d like to buy the keyboard I’m playing. I tell him I couldn’t possibly, since it’s a good $2000 out of my range. He introduces me to store credit. A couple hours later, I’m setting up this glorious keyboard in my dorm room.

    When I went home for winter break, I took the keyboard with me. And almost got the whipping of my life when my dad found out what I’d done: over $100 a month for 24 months — and me a college student without a job. He made me put an ad in the paper, and I was lucky enough to sell the keyboard for about what I still owed on it.

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    You’d think I’d have learned my lesson then, but you’d be wrong. A few years later, I was planning a year abroad, just out of college. For emergency use, I got a secured credit card, one of those deals where you put $200 in an account and get a $300 credit limit.

    That wasn’t a bad move, really — during my year in Europe, it gave me a great deal of security, and I had arranged with my mother to make the $10 minimum payments until I got back. And when I got back I paid it off.

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    Problem is, I didn’t cancel it once I’d paid it off, and pretty soon started getting more offers for “better” credit cards. $1000 limit. $2500 limit. Gold card. Platinum card. I was living in New York by then and traveling a lot and making pretty good money and before I knew it I had racked up $20,000 in credit card debt.

    Then I got laid off. And suddenly the $500 a month I was paying in minimum payments wasn’t feasible. I fell behind. Then I fell really behind. Accounts were canceled, and charged off, and sent to collection agencies. It was a mess.

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    I’ve spent years dealing with that mess, and to be honest I’m still working on it. I don’t have an advice to offer on debt recovery — it’s a slow, painful, messy process, and frankly I’m not that good at it. One thing I have become good at since my credit score plummeted is living without credit.

    It seems impossible, in this online era with cash becoming rarer and rarer, but it’s not impossible. In fact, there are a lot of good reasons to live without credit:

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    • It forces you to live within your means. When I had charge cards, I could always rationalize a big purchase. “$400? That’s only $12 a month!” Twelve dollars doesn’t seem like a lot of money, does it? Or else, I’d tell myself I’d pay it off next month — and next month, there was always some pressing cost that kept me from paying off my balance. Without credit, I simply can’t do that — there’s nothing to spend when my bank account balance reaches zero. There’s no way to push costs into the future — I can only spend what I have, when I have it.
    • Things cost what they cost. That $400 purchase I just mentioned? Taking into account interest and annual fees, it could easily cost $1000, $2000, or even more, making only minimum monthly payments. These costs get buried in the sum total of charges — you pay off a little and charge a little more, pay off a little and charge a little more, and pretty soon you have no idea what you’re paying for or how much you’re paying for it. Without credit, I walk in to the store, pay $400 cash, and that’s it: $400, period. Or, more often, I don’t pay $400, because I can’t afford it.
    • It forces you to discipline your spending. When you have $10,000 in available credit, it’s easy to get carried away. Living without credit means weighing every purchase, every expenditure, against your available cash. $400 seems like a lot more when it comes out of my monthly paycheck than when it comes out of a revolving line of credit with thousands of dollars to go before I max out. If there’s something I want, I have to work for it — either by finding a way to offset the expense or by saving up over time until I can afford it. Either way, impulse spending becomes impossible.
    • You can’t default on cash. Cash doesn’t call you at work, send threatening letters, or track you down through your references. You pay and that’s it.

    My biggest regret is that I didn’t realize all this at the time, and that I didn’t take steps to live without credit when it would have been a choice, rather than a forced exile. But I wouldn’t go back; if I somehow woke up with perfect credit tomorrow, I’d still keep to my credit-free lifestyle, for the reasons listed above.

    There are some inconveniences, of course. If you want to buy a house someday, you’ll probably want to have some credit history, although records of on-time utility payments and rent payments are often adequate (though who knows what the mortgage lending field will look like by the time the current meltdown works itself out?) Likewise, buying a car can be tricky.

    But that’s about it. Between my debit card and my PayPal account, I have no problems ordering online — PayPal even offers virtual credit cards for online ordering. Likewise, you can almost always use a debit card to make travel reservations or for rentals (sometimes they charge a deposit to your account which is then charged back when you pay the final bill, so you need to be able to cover both the deposit and the payment).

    It’s been six years since I made my last charge to a revolving account, and to this day I don’t miss it. I’ve found myself running short a couple of times, but to be honest, tightening my belt for a week or two doesn’t seem so bad next to the prospect of spending 20 years paying off the balance on a credit card. And while I’m still getting my house in order today, in ten years I’ll be in much better shape than I would be if I’d never screwed up and still held a pocket full of plastic.

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    Last Updated on March 31, 2020

    Is Procrastination Bad? The Truth About Procrastination Revealed

    Is Procrastination Bad? The Truth About Procrastination Revealed

    Procrastination is very literally the opposite of productivity. To produce something is to pull it forward, while to procrastinate is to push it forward — to tomorrow, to next week, or ultimately to never.

    Procrastination fills us with shame — we curse ourselves for our laziness, our inability to focus on the task at hand, our tendency to be easily led into easier and more immediate gratifications. And with good reason: for the most part, time spent procrastinating is time spent not doing things that are, in some way or other, important to us.

    There is a positive side to procrastination, but it’s important not to confuse procrastination at its best with everyday garden-variety procrastination.

    Sometimes — sometimes! — procrastination gives us the time we need to sort through a thorny issue or to generate ideas. In those rare instances, we should embrace procrastination — even as we push it away the rest of the time.

    Why We Procrastinate After All?

    We procrastinate for a number of reasons, some better than others. One reason we procrastinate is that, while we know what we want to do, we need time to let the ideas “ferment” before we are ready to sit down and put them into action.

    Some might call this “creative faffing”; I call it, following copywriter Ray Del Savio’s lead, “concepting”.[1]

    Whatever you choose to call it, it’s the time spent dreaming up what you want to say or do, weighing ideas in your mind, following false leads and tearing off on mental wild goose chases, and generally thinking things through.

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    To the outside observer, concepting looks like… well, like nothing much at all. Maybe you’re leaning back in your chair, feet up, staring at the wall or ceiling, or laying in bed apparently dozing, or looking out over the skyline or feeding pigeons in the park or fiddling with the Japanese vinyl toys that stand watch over your desk.

    If ideas are the lifeblood of your work, you have to make time for concepting, and you have to overcome the sensation— often overpowering in our work-obsessed culture — that faffing, however creative, is not work.

    Is Procrastination Bad?

    Yes it is.

    Don’t fool yourself into thinking that you’re “concepting” when in fact you’re just not sure what you’re supposed to be doing.

    Spending an hour staring at the wall while thinking up the perfect tagline for a marketing campaign is creative faffing; staring at the wall for an hour because you don’t know how to come up with a tagline, or don’t know the product you’re marketing well enough to come up with one, is just wasting time.

    Lack of definition is perhaps the biggest friend of your procrastination demons. When we’re not sure what to do — whether because we haven’t planned thoroughly enough, we haven’t specified the scope of what we hope to accomplish in the immediate present, or we lack important information, skills, or resources to get the job done.

    It’s easy to get distracted or to trick ourselves into spinning our wheels doing nothing. It takes our mind off the uncomfortable sensation of failing to make progress on something important.

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    The answer to this is in planning and scheduling. Rather than giving yourself an unspecified length of time to perform an unspecified task (“Let’s see, I guess I’ll work on that spreadsheet for a while”) give yourself a limited amount of time to work on a clearly defined task (“Now I’ll enter the figures from last months sales report into the spreadsheet for an hour”).

    Giving yourself a deadline, even an artificial one, helps build a sense of urgency and also offers the promise of time to “screw around” later, once more important things are done.

    For larger projects, planning plays a huge role in whether or not you’ll spend too much time procrastinating to reach the end reasonably quickly.

    A good plan not only lists the steps you have to take to reach the end, but takes into account the resources, knowledge and inputs from other people you’re going to need to perform those steps.

    Instead of futzing around doing nothing because you don’t have last month’s sales report, getting the report should be a step in the project.

    Otherwise, you’ll spend time cooling your heels, justifying your lack of action as necessary: you aren’t wasting time because you want to, but because you have to.

    How Bad Procrastination Can Be

    Our mind can often trick us into procrastinating, often to the point that we don’t realize we’re procrastinating at all.

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    After all, we have lots and lots of things to do; if we’re working on something, aren’t we being productive – even if the one big thing we need to work on doesn’t get done?

    One way this plays out is that we scan our to-do list, skipping over the big challenging projects in favor of the short, easy projects. At the end of the day, we feel very productive: we’ve crossed twelve things off our list!

    That big project we didn’t work on gets put onto the next day’s list, and when the same thing happens, it gets moved forward again. And again.

    Big tasks often present us with the problem above – we aren’t sure what to do exactly, so we look for other ways to occupy ourselves.

    In many cases too, big tasks aren’t really tasks at all; they’re aggregates of many smaller tasks. If something’s sitting on your list for a long time, each day getting skipped over in favor of more immediately doable tasks, it’s probably not very well thought out.

    You’re actively resisting it because you don’t really know what it is. Try to break it down into a set of small tasks, something more like the tasks you are doing in place of the one big task you aren’t doing.

    More consequences of procrastination can be found in this article: 8 Dreadful Effects of Procrastination That Can Destroy Your Life

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    Procrastination, a Technical Failure

    Procrastination is, more often than not, a sign of a technical failure, not a moral failure.

    It’s not because we’re bad people that we procrastinate. Most times, procrastination serves as a symptom of something more fundamentally wrong with the tasks we’ve set ourselves.

    It’s important to keep an eye on our procrastinating tendencies, to ask ourselves whenever we notice ourselves pushing things forward what it is about the task we’ve set ourselves that simply isn’t working for us.

    Learn more about how to fix your procrastination problem here: What Is Procrastination and How to Stop It (The Complete Guide)

    Featured photo credit: chuttersnap via unsplash.com

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