Lending Club Blog

Reacting Versus Responding to Money

One of the big benefits of thinking of your financial life as a system is that you will respond instead of reacting to everything that happens to you financially. What is the difference? It can mean a lot to you financially.

A reaction is an action based on some kind of external action. A reaction has no plan and no thinking built into it. It can be called a “knee-jerk” action or a reflex. When the doctor taps you on the knee, you have no control over the reaction and your leg moves. Same thing happens when you are reacting to your financial life.

Some examples of reactions:

• There’s a sale going on at the mall and although you don’t need new clothes, you decide to go shopping

• Your car breaks down and it costs $500 to fix, so you put it on a credit card

When you don’t have a response or a system prepared to deal with everything that might come to you financially, you are forced to react. And many times this reaction will cost you a lot financially.

A response is a prepared action you have for anything that comes your way. A systemized financial life helps you by making sure you have a response for mostly everything. It helps you by allowing you to foresee anything that might go wrong and prepare for it ahead of time, so that the unplanned and unwelcome event does not ruin you financially.

Some examples of being ready with a response:

• Not spending all your money during the holiday season, knowing that the after-holiday sales will have a lot of bargains

• Putting away two to six months worth of life expenses in case you lose your job or get injured

• Planning ahead for major purchases so you’re not forced to use credit when buying them on a whim

Action: Look over your financial system to see where things might go wrong and prepare a response. This will keep you from breaking the bank when financial emergencies come up. It will also reduce the amount of stress you experience in your life, knowing that you have that cushion in case anything goes wrong on your way to achieving your goal to become wealthy.

Friday, February 22nd, 2008 at 5:08 am

Comments (0)

  • Archives z

Recent Posts

We went public today!

Ringing the bell this morning at the New York… Read More »
December 11, 2014

New and Improved Statistics Page

We recently redesigned our Loan Statistics page to make… Read More »
November 13, 2014

Lending Club Honored with Economist Innovation Award

This month I was honored… Read More »
October 15, 2014

Finding the right company culture for you

How important is company culture to you? At Lending… Read More »
September 30, 2014

Welcome Vermont Investors!

Today, we’re thrilled to welcome residents of the state… Read More »
September 4, 2014

We filed to go public today

We filed a registration statement with the SEC today… Read More »
August 27, 2014

Our Billion Dollar Quarter

We’re excited to announce  that we’ve facilitated over $5… Read More »
July 8, 2014

Is Lending Club Available in My State?

Is Lending Club available in my state? That is… Read More »
July 7, 2014

5 Things Everyone Should Do Before a First Interview

After spending hours drafting your… Read More »
June 24, 2014

Lending Club Joins Senator Cory Booker to Discuss Improving Access to Capital for Small Businesses

Read More »
June 20, 2014