Personal Finance: From Credit Scores Reliance to Debt Freedom

Modern teaching about personal finance encourages people to concentrate on credit scores, cheap credit, and credit cards. Essentially, it assumes you will live in debt forever. It does not mention the single, critical, controllable element in personal finance—individual choices that decide spending and lead to financial results. Getting out of debt is primarily a behavioural matter; it’s not financial juggling.

Two Approaches to Personal Finance

Personal Finance Needs a Money Map
Personal Finance Competency Needs a Money Map

We can view personal finance in two ways. The usual approach teaches how to use credit cards, and how to maintain a good credit score. Or, the method I apply: Encourage people to strive to live debt free lifestyles.

In the first method, you can get a great credit score, and maintain it always. But, what does that mean? It means you have been in debt, you have stayed in debt, and you repaid your debts as required. You didn’t add much debt, and most importantly, you are not paying off too much debt. Do you get it? You became a slave to debt! That’s what the world tells you, and most folks tell their children. Isn’t this absurd?

I practice and teach folks to avoid debt. I suggest we save and then buy. As well, if we choose to use a credit card, use a secured credit card. However, ideally, use a debit card. To buy a house, save a downpayment that fits in the household budget, then buy when you can afford to buy. Most significant, rent when you can’t afford to buy. But, please understand, the system will require you to jump through many hoops to prove creditworthiness. To be sure, you will need to show consistent payment of rent, utilities, and other regular payments.

Teaching Children About Finances

How do we teach prudent stewardship of money? Who should teach our kids about personal finance? Many parents have bought the asinine money management idea mentioned above, and they live in debt. They believe personal finance means getting a credit card as early as possible to develop a credit score. Instead, they should be saving most of the funds they get from governments for their children. And at an early age, teach the children to give, to spend, and to save. Sadly, most people I know teach their children to save, which is excellent; but we must teach them how to spend and make wise spending choices too.

Unfortunately, many schools now teach personal finance to our children. They teach the bizarre credit score approach, and so our kids have fallen in the vicious debt trap. Students take on thousands of dollars of student loans as if it’s normal. And when reality hits after graduation, they complain and continue the debt path.

So, how do we confront this challenge to change our views to the cautious debt-free approach? Let’s be realistic: children learn from their parents’ behaviours. Therefore, debt-free lifestyle training starts with parents realizing debts’ bondage and deciding to be debt free. This training will lead to plans and actions to pay off credit card and other debts. Next, they must save to buy major items, such as a stove, washing machine, and a car. This new direction will take time, but every journey begins with a single step. Most of all, decide to live without credit card and other consumer debts.

Will you take the first step and choose to get-off the credit score, perpetual debt, train?

© 2016 Michel A. Bell


ABCs & 123s of Getting Out of Debt


Michel A. Bell

Michel A. Bell is a former senior business executive, author of seven books — including his first children's book published in 2022 — speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel is a Fellow of the Chartered Certified Accountants (UK), holds a Masters of Science in management degree from Massachusetts Institute of Technology and a Doctor of Business Administration honoris causa from Briercrest College and Seminary. He is founder and president of Managing God's Money™ and Stewarding God's Resources.

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