Live like a millionaire!  You may be surprised to hear that suggestion when credit and debt are being discussed.  But that is exactly what I am going to suggest.

            Would you ever agree to pay more for the things you purchase than the amount on the price tag?  Of course not.  But that is exactly what you do if you make purchases with a credit card that you don’t pay off before finance charges are added to the initial amount.  And if you are late with the payment, late fees are added.  These are ways you increase the original cost of your purchases.  The creditor is definitely winning the money game and you are losing!

            There are two kinds of debt— PRODUCTIVE DEBT  and COMSUMPTIVE DEBT.  Productive debt is using other people’s money to buy things that appreciate in value.  Loans to purchase land, rental properties, or fine art are examples of productive debt.    Consumptive debt is using other people’s money to buy items that depreciate in value.  Most credit card purchases are consumptive debt. 

           What kind of debt do you think the millionaires use?  We know Donald Trump uses other’s people’s money for productive debt. Do you think he pays interest on balances left on his credit accounts? 

          You may not be in a position to use productive debt but you certainly can limit your use of consumptive debt.  Many people must take a loan to purchase an auto, but that payment must be worked into a monthly budget.  There should be a provision to pay all credit card charges in full before the due date in order to avoid finance charges and build a stellar credit record.

RULE: Plan to pay, then purchase--not purchase, then play to pay!

      So the first step to live like a millionaire is to eliminate consumptive debt.  Use credit for your convenience and benefit, not the lenders’.  It is a necessary strategy for winning the Money Game! 

Have you avoided these FINANCIAL DANGER SIGNS? 


* late payments

* don't know total indebtedness

* total indebtedness increases

* lack of planning and setting goals

* use of credit to maintain current lifestyle

* credit is thought of as MONEY instead of DEBT

* no way of knowing when expenditures (including credit purchases)
  exceed income

* inability to say "NO" to spouse, children and others

* poor communication with family members about financial matters

* new credit is used to juggle old debts (consolidation)

* irregular income; reduction in income

* impulse buying of unplanned purchases

* unexpected tax liability on April 15; tax return not filed

* no provision for irregular expenses such as

auto repair
home maintenance
holiday gifts
medical expenses

      Increasing complexities in the field of finance sometimes create difficulties for people in handling their money.  Time alone seldom solves financial problems.  Action must be taken immediately!  If there are "danger signs" present in your situation, seek the advice of a person who has had academic training and professional experience in working with family finance.


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