***Disclaimer***
I’m sure this post will piss some people off, and that’s okay. I have never said I was perfect when it came to money, but the following examples are just moronic.
Our country is in trouble. Not because of looming terrorist attacks. Not because of the invasion of privacy known as the Patriot Act. Not because social security is running out.
No, America is in trouble because we are on the verge of becoming a cashless society. It is bad enough we went off the gold standard a few years ago. What does that mean? Well, basically it means that the money you have in your wallet is not worth the ink it is printed on. Wonder why the dollar is not worth as much as other foreign currency? It used to be that each dollar printed was back by its weight in gold. Nowadays, if the government needs money, they just print it.
My concern actually is not with the government. It is with the banks, credit card companies, and other lending organizations that are financing the bankruptcy of America. My dad once taught me that if you cannot afford to pay cash for something, you don’t need it. Wow… if only I had listened to him. Instead I managed to get myself in the typical routine of living beyond my means, and like most Americans, racking up the credit card debt. Then one day, I woke up. I realized that if I didn’t change the way I was living, I was never going to get out of debt.
Nowadays, I live on a budget, I quit using credit cards, and I’m working my way out of the whole I dug. For anyone who has reached the bottom like I did, and is looking for some inspiration and a little help on planning your path to get back to the top, I recommend Dave Ramsey’s – The Total Money Makeover. The best thing about Dave, is he just tells it the way it is. If you are a moron, he is not going to put sugar on things—he will simply tell you that you’re a moron.
Once you make up your mind to live a debt free life, you will be amazed at some of the things you see right in front of you. Sometimes you’ll want to help, but after your advice falls on deaf ears so many times, you simply realize that those people are comfortable living pay check to pay check, and you can’t help them. The best is those people that talk about ‘good’ debt and ‘bad’ debt. The fact is, if you are in DEBT – it is bad. PERIOD.
So what are some of the things that have amazed me?
- I know someone who recently went on a vacation that was paid for entirely on a credit card—one month after over-drafting their bank account more than once. Does that make any sense at all? If you’re over-drafting your bank account, do you really think you need to go on vacation?
- I know someone who went over a year without any kind of employment, yet insisted, that he was too good to drive anything less than a brand new $35,000 car that they pays $400/mo for let alone the insurance. Wow. God bless credit cards.
- I know a single person who makes less than $35,000/yr that bought a house. What was hilarious was they got a 90/10 loan. Now, you might be thinking, well, that’s good – they put down 10%. If that were the case, I would shut up. But no, their parents paid the 10% down, so in all reality they took out a 100% loan on a house. WOW. I’m all about home ownership, but take a look at all the cookie cutter homes and bank foreclosures and you will start to see the picture that is being painted. Home ownership is NOT for everyone.
- I know a person who is waiting until January to buy presents for his friends and family for Christmas. I first thought – this is GREAT!! They are going to wait until they have the cash to pay for the presents. Unfortunately, that is not the case. They are waiting to get their financial aid check for school. Yes, that is correct they are using money meant for education to pay for frivolous gifts. I hope Sallie Mae at least sends them a Christmas Card every year!
- This is the best one… I know someone who drove a Jeep Grand Cherokee… good car, wish I had one. They traded the Jeep in for a Lexus RX350 and the $600/mo payment that came with it. After a year, the Lexus wasn’t ‘good’ enough for them and they traded that in for a Land Rover, as well as the $800/mo payment. Now, less than a year later, they are looking to trade it in again for a Mercedes M-Class and the $1000/mo payment. Really????
I guess the point of this blog goes back to the title – “Act Your Wage America!” People need to realize that if they cannot afford to live the ‘high life’ that’s OKAY!!! A friend of mine once told me that life is a marathon, not a sprint – what a brilliant concept. What happened to saving money until you can buy the things you want?!?
Maybe I should become a bankruptcy lawyer?
3 responses so far ↓
1 Craig // Dec 31, 2007 at 1:53 pm
It is important to differentiate between good debt and bad debt- but credit cards are not necessarily evil if you make use of them correctly. I pay for just about everything with a credit card, then pay the balance off every month- getting the benefit of an interest free use of their money for 30 days, as well as any rewards points that I accrue. Now you can argue this increases costs to retailers which will eventually be passed on, but people are not going to stop using credit cards, I might as well get the benefits from it, it just requires the self control not to carry a balance month to month.
The other good use for credit cards is when special offers allow you to make a big purchase interest free, at least as long as you are capable of paying it off before that term is up. Again, requires the self control to pay it off before that term is up since the interest is still accruing and will be applied if not paid off in the promotional period.
The key is to live within your means while taking advantage of what’s available and advantageous to you.
2 j.Brown // Dec 31, 2007 at 2:26 pm
@ Craig – For the longest time, I would have agreed with you Craig, but after seeing many, if not most people continue to carry a debt month after month after month, and tell me about all the “points” they are getting I finally decided debt is debt, and thus debt is dumb.
It has been proven that the majority of people can NOT pay off their debt each month. And trust me, the credit card companies do NOT want you to pay it off. And for the 0% promos… they are are just sitting back and hoping that you don’t make a payment so they can hit you all that back interest.
All of the ‘free offers’ are not free. Credit card companies know the majority of people are going to carry a balance well beyond any promotional period. If everyone played by the rules the credit card companies would be out of business because they wouldn’t be making any money.
3 Craig // Dec 31, 2007 at 2:46 pm
Oh I agree, although Credit Card companies would not be out of business since a tremendous portion of their income comes from fees charged to retailers and not interest on debt, they would definitely be hurting bigtime. I agree that the majority can’t pay their balance off month to month, but it is possible to do so, and is the one case where using credit cards can be a good idea. But if someone knows they can’t resist the temptation of carrying a balance, it’s probably a good idea for them not to use one. The key is individual financial responsibility, which many people seem to lack, which I think is the point of your post.
Leave a Comment