The best financial decision I ever made was to get a credit card. Yes, you read that correctly. It may sound crazy, or simple or insignificant, but from where I sit today it’s made a huge impact.
Planning for the worst and the best financial decision I ever made
I was a military wife for nearly 25 years. One of the things the military pretty much makes you do is plan for the demise of your soldier. Before the solider can deploy, he has to prepare for what if he doesn’t come back. So we looked death in the eye. We did it together. We decided who would have to take the kids. I mean, who would lovingly look after our angels if we passed unexpectedly. We decided what to do with our assets, how would we provide for our children. We got life insurance.
In that process, I also looked at what would life look like if he didn’t come back. And I realized that all of my credit was tied to him. We got married right out of college. All of our bills were in his name. And I realized that I was not building a credit history. And these days everything is affected by your credit score.
So I made that decision that I now look at as the best financial decision I ever made. I got a credit card-in my name only. And I used it. And I paid it off every month. I built my credit history. I built my credit score.
Life happens, and it’s not always what you expect
Then along comes a divorce. Back 20 years ago when I got that credit card, I was planning on how to recover if he died. I wasn’t planning on what if we split. But here I was. And I was grateful that my younger self had thought ahead.
After he cancelled our joint credit card, the one that still had thousands of dollars of debt on it, without my knowledge or consent, my credit took a hit. A HUGE hit. It dropped 130 points just like that. Not only did I now have on my credit report a cancelled card with an outstanding balance (which I learned is very bad for your credit), but I also had erased 25 years’ worth of credit history. That was major.
But my best financial decision ever saved me. I had a credit card, with a great payment record with a long history. It’s the only thing that saved my credit from being in the toilet. At a time in my life when I was trying to rebuild after being a stay-at-home mom for the better part of 20 years. At a point when I would really need good credit.
My best financial decision saved me
My best financial decision ever would allow me to still have a decent credit score. It’s going to take a long time to recover to the score I had, but it’s at least good enough that I’ll be able to qualify for a mortgage. Which I need to do if I want to actually keep the house that I got in the divorce settlement. Because I HAVE to refinance it, and get his name off the mortgage. And if I hadn’t had that card all those years, and had a good payment history, I would be in trouble. Forget getting a great rate, I would be in trouble to even find someone willing to lend to me!
Sometimes, those little things come back to haunt us. And sometimes those little things we don’t really think about come back to lift us up. The best financial decision I ever made was a just-in-case thought process that has come back to lift me up at a time I desperately needed it.
Take it from Me
So, my advice to you: Think about what would happen to you if the worst were to happen. Planning for the worst does not invite it in! It gives you the ability to give yourself a safety net.
Planning for the worst, if he died, made me write a will. Which means that the person of my choice will get my children, they won’t be Wards of the State until the State decides who they should be with. Writing a will means that the assets I have managed to acquire this far in life will go where I want them to, and not get tied up in Probate Court with the State taking hefty fees for the task of sorting out my estate.
Planning for the worst made me think of what I would need, how I would get by, and it made me make sure that I did what I could when it wasn’t critical to set myself up for success.
The best financial decision was?
The best financial decision I ever made was made when I was planning for what if the worst happened. At the time I thought that was his death. In the end it ended up saving me when we couldn’t be together any more. It was small and it was simple, but it turned out to be HUGE.
And, to be honest, while I think getting that credit card and building my own credit history over the years was the best financial decision I ever made for myself, I think THE best thing I ever did for myself was to sit down and look the worst-case scenario in the eye. Looking at what the worst could be made me take steps to mitigate it, and THAT was the best thing that I ever could have done for myself.