Is Black Friday the Beginning or the End of Your Financial Well-being?

The holiday season is probably the exact opposite of the new year. In January, some people establish goals and adopt new behaviors that are intended to improve their lives. Yet in the holiday season, at least from the financial viewpoint, we engage in potentially the most self-destructive behaviors, under the guise of giving and enjoyment.

This is not a “bah humbug” against those wonderful things. However, most people end up spending more than they planned. Worse, they are using the wrong source of funds to pay for it all. The wrong source, of course, is the credit card. After the fun of purchasing the gifts and vacations is over, the bills arrive and most begin the slow agonizing steps of repaying that money with high interest every month (and fees if they are late). They then repeat the process all over again next year.

Privatized Banking offers a different option. Imagine having access to a credit line in a financial institution that you are a part-owner of, having the ability to have those funds available anytime you need them, and having the ability to decide when and how much to pay back. While paying back that money, in comparison to other credit instruments, and if done wisely, you pay far less in interest.

This is not to say that this is a source of free money. Far from it. When we purchase items for pleasure for ourselves or for others, we must pay back that money, and with interest. Why? To reflect the choices we have made. In choosing to spend on things which only provide pleasure, we give up the ability to use that money (or for our financial institution to use it) to make us more money with it. Buying a business is certainly not like buying a gift. One makes money, one costs money.

We all want to buy gifts, take vacations, and use money as we see fit to give us pleasure in life. We also end up spending money on things that we are forced to do so and yet are necessary, like medical bills. Those expenditures reflect money being used that does not make money. That is lost interest that we must make up, else we end up in the spiral of eternal financial decline. Because the holidays come out every year, we have to plan to pay ourselves back in time to repeat the process. Unlike governments, private individuals cannot continue to spend into oblivion year after year. This is a discipline that we can teach ourselves while not enriching the commercial banks with excessive interest (and late fees).

Privatized Bankers have learned how to have a merrier Christmas every year. We can all do it. Every one of us.