It's okay to be afraid sometimes...

Being a financial coward can have its advantages. I had that concept reinforced by this article.

My history, my upbringing, caused me to become a financial coward.  My family struggled a bit, financially, in my early years. My father started his bicycle shop when I was about 4 years old and pennies were watched by my frugal father while Mom learned and practiced "creative" financing. In those younger years, I was unaware of how she managed the family finances. It was years later, in my teens, that I learned how she used the delays inherent in check clearing at the time to her (and our) advantage. Writing checks at the supermarket for more than the cost of her groceries ("cash back", as its called now), or talking the local gas station into giving her cash on her gas card, so she could put the extra cash in the bank to cover the checks she had written earlier was her primary method. She took advantage of the week it took then to clear a check. Basically, she was operating about a week behind financially.

The stress she went through must have impacted me heavily. Instead of putting off bills, I paid them immediately. I avoided having a checking account and didn't even try to get a credit card until the late 70's (in my mid-30's). I wouldn't have gotten a credit card then but it became impossible to rent a car for cash about that time. They used to take cash and, sometimes, held your return flight ticket against extra charges (and to insure your return of the car, I suppose) but that stopped and credit cards were demanded. You could still pay cash to settle the charges when you returned the car but you had to produce a card to get the car in the first place.

I applied for an Amex card because they were sending me applications on a fairly regular basis. I had good credit because I always paid my bills and I paid them on time. I paid each Amex bill in full except for two periods: one was after my grandmother died and I had to take a hurried trip to Phoenix and then New York and the other was when I needed to furnish my recently purchased condo. I just didn't have enough cash on hand.

I didn't give up the Amex card until the early 90's. By then, I had picked up two other credit cards and had married Faye (who has the same financial cowardice I do). She is my "watchdog" on the credit card bills. She carefully checks all charges, makes sure we have the CC receipts (or a plausible explanation of why we don't) for each purchase. Faye is, essentially, my CFO.

While reading the stories, I was struck by how easily these people got into a financial scrape. And I was reminded of friends I had known over the years that could have had similar problems. You cannot fully prepare for the identity thief problem, of course, but the other stories are much more common: people tend to overspend. Once you start paying the minimum payment on a credit card bill, it's easy to just continue.

A lot of people blame the credit card companies and the banks behind them. They (the banks) make credit too easy and they charge very high interest rates. People too easily forget that no one forced that credit on them, they applied for it. The fault for whatever financial predicament they're in is most likely their own.


I do feel sorry for them, though.