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The 5 Components of Your Credit Rating

Image of a credit score with the blog post title: The 5 Components of Your Credit Rating

BIGG success is life on your own terms. Our focus today is on money, one of the five elements of BIGG success.

Specifically, we want to talk about an asset that is particularly valuable now. Yet it doesn’t show up on your Balance Sheet. It’s your credit rating, or credit score.

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Are You a Shopoholic?

shopping_mall There is a group that is suffering more than most during these tough economic times. Unfortunately, their agony is not covered much in the major media. They are all around us. Yet we seldom see the turmoil that they are experiencing. They have chosen to largely endure it on their own, not talking about it to anyone.

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Who are we talking about?

Shopoholics!

This economy has really made an impact on this group of people. There are a lot of people who claim to be shopoholics. But most people who call themselves shopoholics probably don’t really have a problem that borders on an obsession.

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georgeOne of my sisters can shop all day long and never buy anything. She just seems to love being in a shopping arena … she’s a gladiator among shoppers!

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marylynnBoy, I’m not one of those people. I like to get in and out. I have an aunt who likes to do all-day shopping ventures. It gives me a headache and makes me dizzy.

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Problems experienced by compulsive buyers

We’ve taken a light-hearted approach so far, but this problem is more serious than we realize. A recent study, conducted jointly by researchers at the University of Richmond and the University of Illinois, found that true shopoholics comprise a larger percentage of the population than is generally assumed.

About nine percent of the participants were found to be “compulsive buyers” according to this study. True shopoholics feel better when they buy things, tend to hide purchases, have more family arguments, and are more likely to have maxed out their credit cards.

Test yourself

Perhaps the most interesting item to come out of this research is the test they used to determine if someone is a shopoholic. The researchers asked participants to rate the degree to which they agreed or disagreed with these six statements.

They used a 7-point scale, which we haven’t seen but can imagine it looked something like this:

1 = Strongly disagree
2 = Disagree
3 = Somewhat disagree
4 = Neutral
5 = Somewhat agree
6 = Agree
7 = Strongly agree

See how you do:

  • My closet has unopened shopping bags in it.

  • Others might consider me a "shopaholic."

  • Much of my life centers around buying things.

  • I buy things I don’t need.

  • I buy things I did not plan to buy.

  • I consider myself an impulse purchaser.

Participants who scored 25 or more were considered compulsive buyers by the researchers. If your score places you in this group, you’re at the first step to overcoming it – you’re aware it is a problem. The next step is to get professional help.

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How ironic

This economy is really crimping the style of “casual” shoppers – people who really like to shop and spend money, but who aren’t really compulsive buyers.

And isn’t it ironic that many of us are being forced to cut back when everything seems to be on sale? From cars to electronics to travel, now is a great time to shop if you have the money.

But of course, that’s the reason these deals exist. People are saving their money at a higher rate now instead of spending it. We’ve learned some valuable lessons in the last few months.

Conspicuous consumption is out; frugality is in. So are we going to hear about “save-a-holics” in the coming years? That remains to be seen.

Well, we better wrap it up for now … it’s time to go shopping!

Thanks for reading our post today. Until next time, here’s to your bigg success!

 

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00331-021609.mp3

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(Image in today's post by Vincitrice)

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How to Reach an Agreement with Your Spouse on the Family Finances

By Bigg Success Staff
06-25-08

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couple

Opposites attract. Unfortunately that can create some problems when it comes to the family’s finances.

Money is one of the biggest sources of disagreement between spouses. It’s often the case that one spouse is a “saver”, while the other is a “spender”.

If you’re the saver …

You may feel like you’re beating your head against the wall. Your spouse doesn’t seem to understand that you’re trying to save for the future. So, just when you think you’re getting a little ahead, your spouse goes out and spends the money. Now you’re back to little, or no, money in the bank!

If you’re the spender …
You may want to “live a little”. Your spouse doesn’t seem to understand that you can’t put off all the fun. You can’t worry about every single dollar you spend. Life’s too short to not live it. Your spouse just wants to save money for when you’ll be too old to enjoy it. You want to live now!

So how do you come to an agreement on the family’s finances?

By having a conversation with your spouse.

Values
Talk about your respective values. To one of you, being debt free may be important. Perhaps you don’t like to use credit cards at all. Or perhaps it’s important to one spouse to buy certain things. It may be as simple as eating lunch out every day.

Understand what’s important to each of you individually before you try to proceed collectively. Something may be very important to your spouse and not important at all to you. That’s okay. You don’t have to agree with each other. You just need to understand to each other.

Goals
Now that you understand each other, you can proceed to your mutual goals. Certain items should be somewhat sacrosanct. An example would be funding your retirement. If you would like to have the option of not working at some point, you have to set money aside while you are working.

As you establish your goals, keep each other’s values in mind. Instead of trying to find ways to pay for what’s important to you, look for ways to get what’s important to your spouse. Ask him or her to do the same thing for you. This role reversal will make the conversation more productive because you’re not fighting for what you want; you’re fighting for what your spouse wants.

Strategies
With your goals established, you know what you need to do. Now you just have to do it. Sounds easy, doesn’t it?

It’s not!

This is the hard part because it’s involves the daily decisions that make or break the budget.

There are a number of strategies you may employ. You may each take an allowance for all of your incidental expenses. You may set a limit and agree to call each other before spending that amount. You may maintain a joint account or separate accounts. You may even do both.

Find what works for you and your spouse through trial and error. Then go for your goals. As you see your accounts grow and grow, following your plan will get easier and easier!

Hear today's lesson and laugh on The Bigg Success Show. 

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