Throught the advanced economies, working people are finding the same thing. They are less credit worthy than they were.
One solution is to look at our own lives and to manage the credit process a great deal better. This may involve managing ones life in such a way that no credit is needed. Idealy, this will not involve any reduction in living standards but will involve matching expenditure with income very carefully. The simplest method is to make a list of the things you need to buy over the comming year. This may be a new fridge, a training course or a holiday. You may have been tempted to buy the fridge now (to take advantage of some ‘unrepeatable’ offer) but as soon as you write it down you will realise the old one will limp on a little longer. You place it on one side and look at the others.
The training course takes a natural priority over the others because it has the potential to pay for itself. There is no point in taking the course years before you are in a position to use it. I have the ambition of eventualy escaping the restrictions of political corectness and teaching English abroad. It is tempting to pay for the course on my credit cards but this would be a mistake. My credit card bills would then keep me in the UK and prevent me from using my qualification. The only way to take full advantage would be to wait until I can pay cash.
Then we must consider the holiday. I try to ensure that everything I spend money on has a purpose. One reason for the firidge is to reduce my power bills (old fridges with faulty seals burn a lot of power). The only way I can justify the holiday is if it teaches me something- such as Spanish or the ways in which people live when they are free to be men and women.
Having costed each item, I then place them in order of priority. The completed list is surprising and not what I had assumed it would be when I started the process.
First- The holliday language course. This will tell me if I have any talent for languages or the hassle of living abroad.
Second- The fridge. This will break down soon and is rusty. It was built in the days before energy eficiency ratings and was probably fairly ineficient even then. The rubber seal has become so perished that warm air enters the fridge and it becomes iced up that it is impossible to remove items without a hammer!
Third- The language teaching course.
Another useful activity is to increase ones credit rating. This involves closing unused credit facilities, reducing overall debt and making ones life more stable generaly. All of these activities are worth doing for their own sakes- regardless of how they look to others.
This leads to the third, and most radical step of all. Make a list of all the threats facing you at the present time. This may involve anything from unemployment to unpaid credit cards. Form an action plan for each threat and DO NOT TELL ANYONE ABOUT IT! Remember that you have already carried out your PR operation by managing your credit score. This has done some good- but the emphasis was on external apperences. Now you will work on the reality and will make yourself truely bomb proof.
