The past few weeks has been brutal for an investor. Last Monday's 777 point loss and the tumultous rest of the week was enough to make even the most veteran investor a little nervous.
What these events do show is the importance of applying christian stewardship principles in finances. What is meant by christian stewardship? This means taking the principles in the Bible and applying them to everyday life. If you follow these principles you never need to worry about a credit crisis. Here are 2 of my favorites.
Credit Card: Never have a balance that you carry forward into the next month!!!!! Paying 20% interest is always a bad strategy. If you can not pay it off each month, cut it up. Do not let a credit card company control your actions.
Personal Auto Loan: A depreciating object such as a car is a liability not an asset. The loan balance will be worth more than car which means that if you turn in the car during the loan period you will also be paying to get out of the loan. You pay interest and fees to get the loan and then pay more money to get out of the loan. The better solution is to save for the vehicle to avoid getting a loan and buy a car that is 2 years old or older to avoid the steepest part of the depreciation curve.
If you live with minimal need for credit you will sleep better at night. In the past, I was guilty of these 2 mistakes. A little upfront effort can avoid sleepless nights.
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