Many of us grow up hearing fairy tales and fables; stories about heroes, princes and princesses, monsters and magical creatures. These stories are meant to teach valuable life lessons to children, but the truth is that even adults can learn from these stories. We put a little spin on some of these classic tales to show you the hidden lessons that apply to managing your personal finances.
Little Red Riding Hood and the Predatory Lender
Once upon a time, Little Red Riding Hood needed a loan, so she set off on a journey to her trusted lender, Woodland Loans. Along the way, she passed a little cottage with a sign in the window which read “Woodland Loans,” but the logo looked different, the phone number had changed and she couldn’t remember ever seeing a location there before. A wolf leaned out the front door and called out to her: “Come on in, little girl! If you need a loan, we’ve got the best in the whole forest!”
Little Red went inside. “We’ll get you your money right away,” said the wolf with a grin, and began showing her all the different options.
“My, what big upfront payments you ask for,” she exclaimed.
“The better to assist you with, my dear” said the wolf, “they’re just normal fees to grant you the loan.”
She continued reading. “My, what little information you ask for…”
“The better to serve you, my dear,” he chuckled, “we don’t need your credit score or need to verify any income. Only those mean lenders ask for that…”
Little Red Riding Hood kept reading, but the wolf was growing impatient and began pressuring her to sign the loan agreement right away.
“My, how insistent you are,” she said, frowning.
“The better to SCAM you my dear,” laughed the wolf, flashing his teeth, “and once we’ve got your money, there’s nothing you can do about it!”
The Moral of the Story:
Unfortunately, there are some lenders out there that don’t have your best interest at heart. Sometimes they’re predatory lenders. Other times they might be not be real lenders at all, but criminals like the wolf in this story. In many cases they pose as legitimate companies and try to scam you or steal personal information.
Always do your due diligence and research the lender you’re dealing with, and the details of any offer you are considering. If it seems too good to be true, it usually is.
The Ant’s and the Grasshopper’s Approaches to Saving
Long ago in a meadow by the forest — not far from that mean old wolf’s house — a young grasshopper was enjoying his summer, never bothering to save for the future. He loved playing his fiddle and making music for the other insects. He even bought a fancier, more expensive fiddle with a credit card.
His friend the ant, however, was different. He was often working, saving and planning for the future. The grasshopper liked the ant, but didn’t pay much attention when the ant tried to tell him about saving. He was more concerned with living in the moment.
Before the grasshopper knew it, summer was over. It was cold, and his heating bill was getting bigger. The grasshopper’s credit cards were maxed out, and he was running out of money. Worst of all, he was nearing retirement (bugs don’t live very long).
He asked around for help, but his credit score had taken a hit, and the other bugs were reluctant to lend him any money. Finally, he asked the ant for help. “I tried to tell you to save,” said the ant, “retirement without any money is going to be hard.”
The poor grasshopper was running out of options. If he couldn’t find a way out of this mess, he might have to ask the wolf for a loan…
The Moral of the Story:
Look, we’ve all overspent from time to time, and real life is more complicated than a fable. But far too many of us get caught up in the day to day and forget to put money away for retirement.
No matter your age, it’s never too late to get on the right path. Here are some tips for getting some extra cash to stash away for the future.
The Tortoise and the Hare Race Against Debt
Just down the road, there lived a tortoise and a hare. They had a lot of fun going to the grasshopper’s concerts, buying cool things and just enjoying life.
Soon, however, their credit cards were maxed out, and the interest was piling up fast.
The hare started paying it off as fast as he could. He made a lot of progress, but his cash flow was so tight that all it took was one accident to throw off his whole budget.
He had no emergency savings, so he had to use the credit card, undoing all the progress he made. He was back to square one.
The tortoise took a different approach. He picked one credit card and made small, consistent payments each month. He knew it would take time, but by doing this and saving enough for everyday problems, he slowly chipped away at the debt.
A year later, the tortoise was amazed by how much progress he’d made. His credit card was paid off! He’d crossed the finish line long before the hare, despite moving at a much slower pace.
The Moral of the Story:
If you want to pay off a credit card or achieve some other financial goal, it can feel discouraging when it doesn’t seem like you’re making progress. But if you take the slow and steady approach you will, eventually, get there.
The key is consistency; stay the course, and you’ll be amazed at how much progress you’ve made. Financial Security Doesn’t Have to Be Fiction
The next time you’re facing a financial challenge, just think back to these classic tales you heard as kid. You can learn lessons that apply in new ways as an adult — and that includes taking control of your finances.