This is another one of my favorite clichés because it speaks directly to the importance of freedom of choice and the power you possess when you can choose.
Perhaps one of the greatest examples of the power of choice occurs when you have multiple options available to you when you make financial decisions. If you have several lenders that line up to approve you for a mortgage, you are highly likely to obtain favorable terms and the best rate possible. If you have options and choices in mind when you go to buy your next car, you are far less likely to be fleeced or forced into a situation where you overpay for a car you’re not that crazy about.
There is also another side to those choices. If you have lenders and car dealers vying for your business, they are competing against one another for the privilege. That competition not only ensures that you have choices, it improves the quality of those choices. Lenders who charge too much for their loans or car dealers who use slimy sales tactics will soon find themselves out of business when consumers have a variety of other options that are more attractive than the ones presented by businesses who don’t meet the standards set by the competition. Lenders, brokers, and car dealers vying for your business are the beggars and you have the power of choice.
All these choices are also made possible when you mange your financial decisions well and you honor your commitments. If you consistently spend beyond your means or selectively pay bills that you know you owe, you will not have many options. In those cases, you become the beggar.
When you cannot go to another credit union to get a loan or to the next mortgage broker to negotiate terms because you have a poor credit standing or you have incurred too much debt, then you will find yourself in the unfortunate position of being subject to whatever rate and terms the lender or the broker decides to offer you, if they choose to do so at all. If you have no other options and a lender knows it, that lender also knows that they have no competition. The competitive balance is turned upside down and you are now begging a lender to do business with you and that lender has the power to choose whether they will or won’t.
If you make it a point to make sound, consistently good financial decisions, you will experience the power of choice and you will know that choosers don’t want to be beggars.
By Scott Arney, Chief Executive Officer, Chicago Patrolmen’s Federal Credit Union.
This article is part of Arney's new series, entitled A New Use for an Old Cliché.
This installment is part of Arney's educational series, entitled The Serial Decision Maker.