Ari was 19 and had everything she ever wanted well, at least up to that point in her life. A close to 6 figure salary, an executive management position with a fortune 500 company, a new house, new furniture, a great relationship, and then she went to a car dealership and what she thought was going to be a day of looking at cars, which she has a love an passion for turned into a financial nightmare.
Ahhh…the fresh smell of a new 2007 Pontiac Grand Prix, 4 door, the exterior silver, the interior black leather, fully loaded, and equipped sitting on the showroom floor of a upscale dealership in Iowa City, Iowa. The car was calling Ari’s name and what may have been a good idea or maybe just an idea at the time turned out to be the dumbest investment Ari has ever made. Ari clearly couldn’t afford the car at an outrageous interest rate of 19% with a company who is no longer in business.
While she was approved and did make monthly payments of almost $400 for 2 years in 2008 her life like many others began to crumble, she lost her job, got evicted, and could no longer afford her beloved car which eventually got repossessed. No one taught her how to manage her finances properly, so she didn’t realize that if she didn’t pay the 3 months she was behind on the note. If there was no way she could than the car would go to auction. And she let, Ari was actually excited that she no longer had to be financially responsible, but what she didn’t realize was the difference between the amount left on the loan and the amount the car was sold for at auction would be hers to pay an outstanding balance of $8000.
I share this story because it teaches many valuable lessons. I’m going to touch on 3 that we can benefit from, regardless of what age we are in life these lessons extend to other behaviors, patterns, and areas many of us need to work on.
1. You have an obligation to pay what you owe.
If you want to be responsible you have to take responsibility.
2. You can run but you can’t hide.
It’s an age old adage that we hear all too often and it’s true our actions speak louder than our words. Although Ari did and could get away from the Repo agent for 8 months she wasn’t able to hide, and ultimately had to take responsibility for making a purchase she couldn’t afford.
3. Bad debt means bad credit.
The longer you let your debt accumulate the more problems you create. Creditors often provide opportunities to pay off old debt otherwise known as “charge offs.” A charge off is when a lien holder allows the debtor to make a payment for a portion of the loan instead of the full amount of the debt in a lump sum as agreement that the entire debt is then paid in full. This charge off does affect your credit but it is often seen as the only way to get away from making a bad situation worse.
Many of us like Ari have experienced lessons like this at some point in our lives and while they may or may not have cost us $8000 these lessons help us become financially fit. Our financial decisions build or destroy our credibility in both our personal lives and our businesses. Imagine being in Ari’s same situation or a similar situation that you may be in right now, know that it will be ok, it takes time to fix financial mistakes. While we all at some point make them wouldn’t it be easier if we learned from others before experiencing the turmoil for ourselves? I want to leave you with this thought you can manage your money or you can let it manage you, only you can make that choice.
Melissa Krivachek is President of Briella Arion and is deeply & passionately committed to the growth & effectiveness of leaders, teams, and organizations. Melissa is a High Caliber Leadership, Sales, and Personal Growth Expert, Author, Speaker, Coach, and Life Enthusiast! To IGNITE your Purpose, Presence, Passion, & Profit visit Briellaarion.com or Ignite-Leadership.com.
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Category: Money Basics