Monday, July 9, 2018

Wrestling with your finances: Get coached to win

We have been working recently with a couple who know the sport of wrestling, and their journey toward greater financial knowledge and health contains some parallels to life on the mat.

I wrestled in high school and when I lost, it happened because my opponent was able to exploit my weaknesses. There is one guaranteed way to avoid losing a wrestling match: Don’t give up any points to your opponent. That means not letting your opponent take you down, escape when you have him in your control, or “reverse” control from you to him. Worse yet, let your opponent keep your shoulders on the mat long enough, and it’s over – you’re pinned.

In personal finance, your opponent is poor financial health and lack of knowledge. The opponent tries to defeat you by exploiting your weaknesses: lack of savings, high-interest “predatory debt” (think payday loans), accounts in collections or maxed out credit cards. Sometimes your opponent has those tools through no fault of your own, such as debt from an unavoidable medical expense or high student debt. Most often, you provide an opening that results from lack of preparation or a mental mistake. You don’t know how to defend a move, or you get sloppy and your opponent takes advantage.

To “win" in personal finance requires three main things: learning the right moves, practicing them, and staying fit. My wrestling fan clients have worked toward a win. They have a goal: to own their own home. They’ve begun applying their growing array of moves to defeat their opponent's main tactics against them – in their case, some old debt that’s in collections, some high-interest debt that costs them more than it should, and high credit card balances.

My financial wrestlers are saving, renegotiating and paying old debt, refinancing high-interest debt and budgeting  -- and they’re scoring points already. They know before the “match” is over, it will pay off in higher credit scores and a lower “debt-to-income ratio” (DTI). The weaknesses their opponent was exploiting will have become strengths. Their credit scores will be high enough to qualify for a mortgage and their DTI low enough for them to afford a monthly mortgage payment.

A win for you on the financial wrestling mat may be qualifying for a car loan at a good interest rate. It may be getting your first credit card and using it to build your score, refinancing predatory debt or building an emergency fund. Whatever your goal, if you’re serious about it you’ll need good coaching. Good coaches are out there at Appalachian Community Federal Credit Union and elsewhere, so find one today. ACFCU's are trained and have your best interests at heart. Learn more today: Call (423) 230-2643 and let Adam Taylor schedule a financial assessment with him or another coach, or email Adam.

(Jeff Keeling is vice president of communications and community relations for Appalachian Community Federal Credit Union.)

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