Investing/Kids

Hey Taylor: I’m usually a fan of Dave Ramsey, but he posted something recently about how a Taylor good credit Kovar score is a bad thing and I got a little confused. Any idea what he’s talking about and if it actually makes sense? - Alex Hey Alex: I read the post you’re talking about—a good credit score is just a symptom of being in love with debt—and I’m going to go ahead and disagree with Mr. Ramsey. I understand his point, but feel like it oversimplifies debt, credit, and how the system works.

The gist. To Dave’s credit, he’s a big advocate of living debt-free. I can’t fault that belief, though that’s the driving force behind him saying people shouldn’t strive to improve their credit scores. It’s very true that a lot of people live beyond their means while having good credit on paper. It’s also true that good credit should not come at the expense of bad debt. Fortunately, and contrary to Dave Ramsey’s post, the two aren’t mutually exclusive. The credit score. To get any sort of credit score, you need to have a transaction history with creditors. This includes banks, credit cards, mortgage lenders, student loan providers, etc. The longer you’ve had accounts in good standing, and the more unused credit you have, the better your score will be. Essentially, all you have to do is be smart with your money and your score will go up, which will make it that much easier to buy a house and make big investments down the road. To say a credit score is only an indicator of how much debt you’ve suffered through ignores the fact that you need a good credit score to buy a house, lease a car, or even open up a new line of credit without getting a soul-crushing APR. Your FICO score absolutely matters, and while there are ways to live life without one, it’s a lot easier to just spend wisely and watch your credit improve. The right strategy. If you try too hard to get a good score, you might fall into some of the traps Dave Ramsey warns about. Instead, use one credit card and pay it off every month. If you lease a car or take out a small personal loan and pay it back quickly, you’ll typically see your score go up. As long as you spend within your means and budget well, you can use credit without ever falling into debt. Then you’ll get that attractive credit score, which will save you money in the long run when you start making bigger purchases. Can you live without a credit score? Sure, if you’ve got the means. Is it easier to live with a good credit score and a smart spending plan? No doubt about it, even if Dave Ramsey himself says otherwise. Thanks for the question!

Legal Disclaimer: Information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. To submit a question to be answered in this column, please send it via email to Question@GoFarWithKovar.com or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901. Q: Our 19month-old is a very active little boy who flips out when things do not go his way. When he John has a tantrum, Rosemond we walk away or simply ignore him. Nonetheless, he will scream and flail about and has recently begun to bang his head on the floor, walls, doors, furniture, whatever. Is this typical of very strong-willed toddlers and will he eventually grow out of it, or is it something we need to discipline? A: One of my graduate school professors was of the opinion that all toddlers are psychotic. By the time I took his class, I was the father of a two-year-old and agreed with his hypothesis. Indeed, full-blown rages are not uncommon at this age and some kids, for inexplicable reasons, emphasize their displeasure by banging their heads on floors, walls, and furniture, which is why God designed the human skull such that it doesn’t begin to harden until age three. The problem is not that some toddlers bang their heads. A pediatrician friend of mine did a search and was unable to find a record of an otherwise “normal” toddler (e.g., your son) incurring significant damage from head-banging. Bruises on the forehead are about as bad as it gets. The problem is that some parents freak out over head-banging. Toddlers are highly intuitive little people. When they discover that head-banging gets their parents' attention and, furthermore, that it obviously upsets them, they bang with even more enthusiasm. Toddlers are also very mischievous little people. My fail-safe solution (at least, I've never been informed of a failure): Draw a circle on a wall with some substance that can be removed later – washable crayon, maybe. Make sure the circle is between two studs and not on top of a stud (think, nail heads). Take your son over to the circle.

Say, “We told your doctor how much you like banging your head on things. He said that when you feel like banging your head, you should bang it here! This is your new and very special headbanging place!” You should, of course, demonstrate the proper technique as you explain the new “rule” to him.

From that point on, whenever your very own live-in nutcase begins to bang his head, simply take him to the circle and say, "No, no, no. Bang here! You can bang here all you want! Yes, yes, this is a lovely place to bang your head on!"

Then, walk away, preferably into another room. If my experience –including testimonies from many parents who have used this same ruse – serves me well, the banging will stop within a week or so. This is much less expensive that rubberizing all the walls and floors in your house. Family psychologist John Rosemond: parentguru.com.

John Rosemond has worked with families, children, and parents since 1971 in the field of family psychology. In 1971, John earned his masters in psychology from Western Illinois University and was elected to the Phi Kappa Phi National Honor Society.