It is Christmas time again, the time for Peace on Earth, Joy, and Love for all Mankind. And Road Rage. And Debt. And fighting over that special item that there is only 1 of in the county and, Danggit, your kid is going to have it!
Why is it that all you have to do is mention Christmas shopping, and all common sense completely disappears? People will spend hours in a mall wearing out a credit card buying expensive gifts for people they barely know, but they will not spare a dollar's worth of change for the bell ringers by the door?
We hear, "Remember the Reason for the Season" and hear Christmas carols praising God and announcing the Birth of Christ, and we might even sing along with them, but the words are just words to us. We are too caught up in the search for the perfect gift or some other such garbage. Do we really think Jesus cares whether or not your Mother-in-Law gets a cashmere sweater for His birthday?
Most of the time, the thing most people would prefer to get would be the money you spent on the gift they don't want or need. All of us, and I do mean every single person, have more crap laying around the house than we care to admit. And I would be willing to guess that if you opened up that back closet that you only use for storage, you would find several items that were given to you at Christmas. We spend hundreds of dollars every year swapping crap.
Instead of buying hundreds of dollars worth of future yard sale fodder in Jesus's Name, why not take the money you would have spent and donate it to cancer research? Instead of buying 2 games for your child's new gaming system, only buy 1 and give the other $50 to a community charity. Or buy $50 worth of food for the food bank. Or buy blankets for the homeless shelter.
Or...spend the time you would have spent Christmas shopping and volunteer!
If we are truly celebrating the Birth of Christ and all He teaches us, do what he wants us to do! Give to those less fortunate. Help those in need. Give joyfully of ourselves. Spend time with friends and family. Celebrate God's love for us and be joyful!
It isn't about who gets the biggest present or who spends the most money. And it most certainly isn't about the corporate profits.
Christmas is about loving and giving. Joyfully and without hesitation.
Showing posts with label credit card debt. Show all posts
Showing posts with label credit card debt. Show all posts
Thursday, December 23, 2010
Friday, January 9, 2009
This Bailout Thing Has Got To Stop!
There are a few things that just really set me off. Government getting in my business, someone telling me how to raise my kids, and people begging for my tax money that don't deserve it.
This morning I heard of some people who are asking for Federal Bailout money. There is a small town in Georgia, a village really, with less than 200 people, who are asking for millions of dollars of MY tax money so they can put in Solar traffic lights, plug in stations for electric golf carts, and an EcoMuseum among other things. Now my question to them is...Why? Does this town have such a high electric bill from their one traffic light that they are having trouble paying it? Is there a large number of golf carts in this little hamlet in Georgia? And would a museum even generate enough income to pay the one employee it would take to run the thing?
Or maybe it is just the prospect of free money that caused them to stick out their hand? I find it almost absurd that the Bank Bailout Package, which started out as an obscene $900 Billion is going to be used by every group of 3 or more people as an excuse to do stupid things. I was opposed to the original bailout to begin with. It is time for the greedy folks to pay the piper. They have been bilking the common joe for decades, and now that they have gotten "caught", they are whining about how it wasn't their fault. If any of these companies had a shred of common sense to begin with they would not have employed the business practices that lead to their downfall. It is their own danged fault they are going under. Have none of these people ever taken an economics class? Interest rates that border on usury, giving loans and credit to people who don't have jobs, giving multiple mortgage loans to people without verifiable income, robbing Peter to pay Paul, shipping jobs overseas and keeping Americans either underemployed or overpaid. None of these things are good business practices. When the average American Adult is more than $10,000 in debt, not counting their mortgages, you should know that there is a problem.
And now the same people who have killed us as a nation are wanting the taxpayer to pay them for being stupid? Just where do they think all of this money is going to come from? Can we just pull BILLIONS or TRILLIONS of dollars out of the air and say, "Here ya go. We are sorry it isn't more?"
There are only a couple of ways the government can get enough money to pay these people off. One is to raise taxes. Americans are already under such a tax burden that the average worker only sees maybe 60-70% of their paycheck. And if we add more taxes to pay for the bailout, it will suck even more out of our paychecks. The major problem with that idea is that most people are living paycheck to paycheck as it is. So people can't afford to buy anything, including food. Or they default on their loans and credit cards and file bankruptcy. Less people buying things means less being sold. That is bad, very bad, for retailers and manufacturers, Then they go bankrupt and lay off or fire employees. That causes more people to not be able to pay their bills. See the cycle here?
Or, the federal reserve can just print more money. Yeah, lets do that! Big mistake. Our money isn't really worth anything anymore since it isn't backed by anything but the good name of the United States. All of that gold sitting in Fort Knox is just sitting there useless. Used to be a time when the Fed would only have enough currency floating around the US equal to the value of the gold in the Federal Reserve. That kept our dollar worth something. We knew that each and every US dollar anywhere on earth was equal to a piece of the gold bars in Kentucky. That isn't the case anymore. We dropped the gold standard sometime back in the 80's, I think. Since then we have just been printing money to be printing money. It isn't really worth anything except in it's rarity. If we print more for the sake of the buyout, each piece of currency will be worth less and less. So it will take more of them to mean anything. That is called inflation. And if we actually print enough for the bailout, that will be called runaway inflation. Yes, boys and girls, if we inject $900 Billion new dollars into the economy just to pay people for being stupid, it will cost $10 for a loaf of bread, if you can find a bakery that is still in business. Hamburger, which is already $3.00 a pound will probably be over $15. And for people who are already out of work, and behind on their bills, how will they live?
All of this just burns my tail feathers. If corporations hadn't gotten greedy and made bad decisions, and if people in general hadn't taken on more debt than they could pay and banks encouraging them to take on more, none of this would be an issue.
And maybe, just maybe, we wouldn't be lambasted all over the world for being the largest consumer on the planet.
It just makes my teeth hurt.
This morning I heard of some people who are asking for Federal Bailout money. There is a small town in Georgia, a village really, with less than 200 people, who are asking for millions of dollars of MY tax money so they can put in Solar traffic lights, plug in stations for electric golf carts, and an EcoMuseum among other things. Now my question to them is...Why? Does this town have such a high electric bill from their one traffic light that they are having trouble paying it? Is there a large number of golf carts in this little hamlet in Georgia? And would a museum even generate enough income to pay the one employee it would take to run the thing?
Or maybe it is just the prospect of free money that caused them to stick out their hand? I find it almost absurd that the Bank Bailout Package, which started out as an obscene $900 Billion is going to be used by every group of 3 or more people as an excuse to do stupid things. I was opposed to the original bailout to begin with. It is time for the greedy folks to pay the piper. They have been bilking the common joe for decades, and now that they have gotten "caught", they are whining about how it wasn't their fault. If any of these companies had a shred of common sense to begin with they would not have employed the business practices that lead to their downfall. It is their own danged fault they are going under. Have none of these people ever taken an economics class? Interest rates that border on usury, giving loans and credit to people who don't have jobs, giving multiple mortgage loans to people without verifiable income, robbing Peter to pay Paul, shipping jobs overseas and keeping Americans either underemployed or overpaid. None of these things are good business practices. When the average American Adult is more than $10,000 in debt, not counting their mortgages, you should know that there is a problem.
And now the same people who have killed us as a nation are wanting the taxpayer to pay them for being stupid? Just where do they think all of this money is going to come from? Can we just pull BILLIONS or TRILLIONS of dollars out of the air and say, "Here ya go. We are sorry it isn't more?"
There are only a couple of ways the government can get enough money to pay these people off. One is to raise taxes. Americans are already under such a tax burden that the average worker only sees maybe 60-70% of their paycheck. And if we add more taxes to pay for the bailout, it will suck even more out of our paychecks. The major problem with that idea is that most people are living paycheck to paycheck as it is. So people can't afford to buy anything, including food. Or they default on their loans and credit cards and file bankruptcy. Less people buying things means less being sold. That is bad, very bad, for retailers and manufacturers, Then they go bankrupt and lay off or fire employees. That causes more people to not be able to pay their bills. See the cycle here?
Or, the federal reserve can just print more money. Yeah, lets do that! Big mistake. Our money isn't really worth anything anymore since it isn't backed by anything but the good name of the United States. All of that gold sitting in Fort Knox is just sitting there useless. Used to be a time when the Fed would only have enough currency floating around the US equal to the value of the gold in the Federal Reserve. That kept our dollar worth something. We knew that each and every US dollar anywhere on earth was equal to a piece of the gold bars in Kentucky. That isn't the case anymore. We dropped the gold standard sometime back in the 80's, I think. Since then we have just been printing money to be printing money. It isn't really worth anything except in it's rarity. If we print more for the sake of the buyout, each piece of currency will be worth less and less. So it will take more of them to mean anything. That is called inflation. And if we actually print enough for the bailout, that will be called runaway inflation. Yes, boys and girls, if we inject $900 Billion new dollars into the economy just to pay people for being stupid, it will cost $10 for a loaf of bread, if you can find a bakery that is still in business. Hamburger, which is already $3.00 a pound will probably be over $15. And for people who are already out of work, and behind on their bills, how will they live?
All of this just burns my tail feathers. If corporations hadn't gotten greedy and made bad decisions, and if people in general hadn't taken on more debt than they could pay and banks encouraging them to take on more, none of this would be an issue.
And maybe, just maybe, we wouldn't be lambasted all over the world for being the largest consumer on the planet.
It just makes my teeth hurt.
Sunday, October 5, 2008
Again with the economy
The economy is diving like a deep sea explorer and everyone seems to just be oblivious to the consequences. The American people seem to think, "Oh, well, home prices are dropping, but that doesn't effect me because I am not looking to sell my house." Then it was, "Oh, well, the mortgage companies and banks are failing, but that doesn't effect me because I am not looking to get a loan." And now it is,"Oh, well, the government is bailing out the stock market so my stocks will be guaranteed by the Government, so we are still OK." and "Gas prices keep going up, but I have to drive to work, so I have to pay it."
Does no one actually understand what banks failing and rising gas prices actually means. I means that any money you have may not be readily available if you want to withdraw it. It means that the CD you have may or may not be there when you get ready to cash it in. It means the credit card that you are paying 15% interest on may go up to 20 or 30%. It means that businesses cannot get operating loans to stay in business. It means that transporting goods from the port cities and distant farms is more expensive so the prices of everything will be going up.
And the real joy of all of this is the $700 Billion Pork Bill that just passed into law means that taxes on everything will be going up. Isn't that GREAT? That, all by it's self, means we will be paying for all of the piddly little special interest programs that couldn't get passed by themselves are now going to happen. And we get to pay for it. Whether we want to or not.
So as a recap, No credit available to anyone, might not be able to get to our money, food and gas prices will be skyrocketing, and taxes will be raised to an insane level.
I am not normally one to predict doom or believe in conspiracies, but I just cannot see how any of this is recoverable. Europe is beginning to suffer the same way and the Asian markets are beginning to fall as well. If something doesn't change soon, the entire world economy will just be going to hell in a hand-basket.
Is anyone really ready for this? Do you have a plan ready in case it all falls apart?
Does no one actually understand what banks failing and rising gas prices actually means. I means that any money you have may not be readily available if you want to withdraw it. It means that the CD you have may or may not be there when you get ready to cash it in. It means the credit card that you are paying 15% interest on may go up to 20 or 30%. It means that businesses cannot get operating loans to stay in business. It means that transporting goods from the port cities and distant farms is more expensive so the prices of everything will be going up.
And the real joy of all of this is the $700 Billion Pork Bill that just passed into law means that taxes on everything will be going up. Isn't that GREAT? That, all by it's self, means we will be paying for all of the piddly little special interest programs that couldn't get passed by themselves are now going to happen. And we get to pay for it. Whether we want to or not.
So as a recap, No credit available to anyone, might not be able to get to our money, food and gas prices will be skyrocketing, and taxes will be raised to an insane level.
I am not normally one to predict doom or believe in conspiracies, but I just cannot see how any of this is recoverable. Europe is beginning to suffer the same way and the Asian markets are beginning to fall as well. If something doesn't change soon, the entire world economy will just be going to hell in a hand-basket.
Is anyone really ready for this? Do you have a plan ready in case it all falls apart?
Tuesday, September 30, 2008
The Credit Crunch
With the economy turning the way it is, it is more important than ever that we all take a good hard look at our spending practices. Do we really need that I-Phone? Is it really necessary to drive thru the burger joint or can you make burgers, or anything else for that matter, at home? Do you really need a new pair of shoes or do you just want them?
With Christmas coming up, it will be more important than ever to watch how and where you spend. Advertising will be aimed at getting you to go on one last spending spree before the New Year. Key indicators are showing that what has happened to the housing market will happen to the credit card industry in early 2009. So that credit card you have been struggling to pay off will more than likely try to bury you in the spring. When credit companies go under, it will be because too many of their cardholders can't make their payments and they have no cash on hand to meet the company's expenses, like payroll, building rent, electric, etc. and they will either need a bailout like the housing market, or they will collapse as well. That will mean that no one will be able to get new credit and the credit you already have will suffer from extreme interest rates.
The best way to handle this is to get out of debt NOW. If you do not have any credit cards or pay them off every month, why not just spot using them altogether? Just don't have one. If you have relatively low balances, pay them off completely and stop using them. Paying for something on credit just isn't worth the interest rates in the long run. If you find something that is on sale for $100 dollars and it looks like a really good deal, you buy it on the credit card that you are already carrying a balance on, at 19% interest, you are paying $119.00 for it the second month, $141.61 the third month, $168.51 the forth month, etc, until it is paid off. That $100 purchase doesn't look like such a good deal anymore, does it. And that is considering you don't have a late fee in there somewhere that causes your interest rate to skyrocket upward of 25-30%. Best bet is to just stop using credit.
If you can't pay cash for it , don't buy it. And even if you can pay cash, do you really need it?
With Christmas coming up, it will be more important than ever to watch how and where you spend. Advertising will be aimed at getting you to go on one last spending spree before the New Year. Key indicators are showing that what has happened to the housing market will happen to the credit card industry in early 2009. So that credit card you have been struggling to pay off will more than likely try to bury you in the spring. When credit companies go under, it will be because too many of their cardholders can't make their payments and they have no cash on hand to meet the company's expenses, like payroll, building rent, electric, etc. and they will either need a bailout like the housing market, or they will collapse as well. That will mean that no one will be able to get new credit and the credit you already have will suffer from extreme interest rates.
The best way to handle this is to get out of debt NOW. If you do not have any credit cards or pay them off every month, why not just spot using them altogether? Just don't have one. If you have relatively low balances, pay them off completely and stop using them. Paying for something on credit just isn't worth the interest rates in the long run. If you find something that is on sale for $100 dollars and it looks like a really good deal, you buy it on the credit card that you are already carrying a balance on, at 19% interest, you are paying $119.00 for it the second month, $141.61 the third month, $168.51 the forth month, etc, until it is paid off. That $100 purchase doesn't look like such a good deal anymore, does it. And that is considering you don't have a late fee in there somewhere that causes your interest rate to skyrocket upward of 25-30%. Best bet is to just stop using credit.
If you can't pay cash for it , don't buy it. And even if you can pay cash, do you really need it?
Not putting our lives on Credit
With the economy turning the way it is, it is more important than ever that we all take a good hard look at our spending practices. Do we really need that I-Phone? Is it really necessary to drive thru the burger joint or can you make burgers, or anything else for that matter, at home? Do you really need a new pair of shoes or do you just want them?
With Christmas coming up, it will be more important than ever to watch how and where you spend. Advertising will be aimed at getting you to go on one last spending spree before the New Year. Key indicators are showing that what has happened to the housing market will happen to the credit card industry in early 2009. So that credit card you have been struggling to pay off will more than likely try to bury you in the spring. When credit companies go under, it will be because too many of their cardholders can't make their payments and they have no cash on hand to meet the company's expenses, like payroll, building rent, electric, etc. and they will either need a bailout like the housing market, or they will collapse as well. That will mean that no one will be able to get new credit and the credit you already have will suffer from extreme interest rates.
The best way to handle this is to get out of debt NOW. If you do not have any credit cards or pay them off every month, why not just stop using them altogether? Just don't have one. If you have relatively low balances, pay them off completely and stop using them. Paying for something on credit just isn't worth the interest rates in the long run. If you find something that is on sale for $100 dollars and it looks like a really good deal, you buy it on the credit card that you are already carrying a balance on, at 19% interest, you are paying $119.00 for it the second month, $141.61 the third month, $168.51 the forth month, etc, until it is paid off. That $100 purchase doesn't look like such a good deal anymore, does it. And that is considering you don't have a late fee in there somewhere that causes your interest rate to skyrocket upward of 25-30%. Best bet is to just stop using credit. If you can't pay cash for it , don't buy it.
We paid off all of our credit cards a couple of years ago. We refinanced the house at a lower interest rate and a shorter term. We knocked 2 years and 2.5% off of our mortgage and managed to cash out some of the equity to pay off 4 of our 5 credit cards. We were left with 1 card that had a 5k+ balance. By not having the other cards to pay, we were able to pay that one on time every month. A large cash gift from the in-laws allowed us to pay that one off as well as the truck. So now all we have left is the mortgage. And we try to pay extra on that principle as well, when we can.
This has allowed us to build up some savings. Now if something happens to my husband's job, we have enough to get by for a couple of months until he can either find a new job or we can sell the house and move. Or in an emergency comes up, we do have some reserves.
All of this means that we cannot go out every weekend, or buy the latest gadget on the market, but you know what, we don't really need it. And it feels much better to have the reserves in the bank than to have the coolest video phone on the market. Especially now.
With Christmas coming up, it will be more important than ever to watch how and where you spend. Advertising will be aimed at getting you to go on one last spending spree before the New Year. Key indicators are showing that what has happened to the housing market will happen to the credit card industry in early 2009. So that credit card you have been struggling to pay off will more than likely try to bury you in the spring. When credit companies go under, it will be because too many of their cardholders can't make their payments and they have no cash on hand to meet the company's expenses, like payroll, building rent, electric, etc. and they will either need a bailout like the housing market, or they will collapse as well. That will mean that no one will be able to get new credit and the credit you already have will suffer from extreme interest rates.
The best way to handle this is to get out of debt NOW. If you do not have any credit cards or pay them off every month, why not just stop using them altogether? Just don't have one. If you have relatively low balances, pay them off completely and stop using them. Paying for something on credit just isn't worth the interest rates in the long run. If you find something that is on sale for $100 dollars and it looks like a really good deal, you buy it on the credit card that you are already carrying a balance on, at 19% interest, you are paying $119.00 for it the second month, $141.61 the third month, $168.51 the forth month, etc, until it is paid off. That $100 purchase doesn't look like such a good deal anymore, does it. And that is considering you don't have a late fee in there somewhere that causes your interest rate to skyrocket upward of 25-30%. Best bet is to just stop using credit. If you can't pay cash for it , don't buy it.
We paid off all of our credit cards a couple of years ago. We refinanced the house at a lower interest rate and a shorter term. We knocked 2 years and 2.5% off of our mortgage and managed to cash out some of the equity to pay off 4 of our 5 credit cards. We were left with 1 card that had a 5k+ balance. By not having the other cards to pay, we were able to pay that one on time every month. A large cash gift from the in-laws allowed us to pay that one off as well as the truck. So now all we have left is the mortgage. And we try to pay extra on that principle as well, when we can.
This has allowed us to build up some savings. Now if something happens to my husband's job, we have enough to get by for a couple of months until he can either find a new job or we can sell the house and move. Or in an emergency comes up, we do have some reserves.
All of this means that we cannot go out every weekend, or buy the latest gadget on the market, but you know what, we don't really need it. And it feels much better to have the reserves in the bank than to have the coolest video phone on the market. Especially now.
Monday, March 17, 2008
Personal Responsibility
One of the many things that really bother me about the direction we are headed as a country is the sheer apathy that most of the country is falling under. No one really cares about anyone else, no one cares about anything but immediate satisfaction of a momentary urge, and no one cares about long term consequences of their actions.
I am a firm believer of Karma, what goes around comes around, and the Threefold Laws. As a country, we are all paying for our past actions. My generation grew up with the belief that we are owed everything by others, that we should be given given what we want and if we don't get it, we should just sue someone to get it. Now there are a few problems with that mindset. I am a bit different that most of my generation. First and foremost is that no one OWES anyone anything. If you do not wish to work, you should not be entitled to benefits that one would expect to receive by working. Those people who work all of their lives and barely make enough to live on expect to get Social Security benefits when they retire. Then there are those whose sole job is to get as much Social Security benefits as possible so they never have to work. There are even those people who have babies out of wedlock just so that they can draw a bigger welfare check. Our country is now paying for the excesses of corrupt society. Our banks are collapsing because they gave risky loans to risky people in the name of greed. Our factories are exporting jobs to third world countries as fast as they can because of wage inflation and over regulation. Bankruptcy courts are being flooded with people who can not pay their credit card bills.
Are we all so conceited that we believe that throwing money at a problem will fix it? Money is not going to fix what is wrong with our country any more. The problem is that corruption has spread into every facet of our lives. We have people who worship the all mighty dollar. We have people who believe that the one with the most toys, wins. And we have people, and corporations, who have no conscience at all when it comes to business matters. No one cares if their next door neighbor is getting laid off because his job is being outsourced to India or Poland because they are too worried about their own job.
We all want the luxuries that the media tell us we should have so we sell our souls to the credit card companies. But when it comes time to pay the piper, we can't. So to pay the credit card bills, we get a second mortgage to pay off the bills. Then, we lose our jobs to someone in another country. Now we have 2 mortgages, kids in school, a couple of car payments and no job. What do we do? File bankruptcy. Now, individually, it doesn't affect society as a whole. The problem is when thousands of people are in this situation. Mortgage companies are having so many people declaring bankruptcy that the banks that underwrite the mortgages are having solvency problems. Banks going bankrupt is bad. Very very bad. It causes everyone who can pay their bills to lose money. It causes stock prices to fall, the dollar to lose value in international markets, and it causes inflation to rise. Inflation, along with a higher unemployment rate, increased fuel prices, and tanking consumer confidence, is adding to the pressure on the government to bail everyone out. The problem with that is the government can't really pay for any kind of bailout without raising taxes. Taxes that are already bordering on the extreme.
I don't know if all of these are just symptoms of the disease that affects our country or if it is the cause. But it will not get any better in this country until we all just take a deep breath and own up to our responsibility.
I am a firm believer of Karma, what goes around comes around, and the Threefold Laws. As a country, we are all paying for our past actions. My generation grew up with the belief that we are owed everything by others, that we should be given given what we want and if we don't get it, we should just sue someone to get it. Now there are a few problems with that mindset. I am a bit different that most of my generation. First and foremost is that no one OWES anyone anything. If you do not wish to work, you should not be entitled to benefits that one would expect to receive by working. Those people who work all of their lives and barely make enough to live on expect to get Social Security benefits when they retire. Then there are those whose sole job is to get as much Social Security benefits as possible so they never have to work. There are even those people who have babies out of wedlock just so that they can draw a bigger welfare check. Our country is now paying for the excesses of corrupt society. Our banks are collapsing because they gave risky loans to risky people in the name of greed. Our factories are exporting jobs to third world countries as fast as they can because of wage inflation and over regulation. Bankruptcy courts are being flooded with people who can not pay their credit card bills.
Are we all so conceited that we believe that throwing money at a problem will fix it? Money is not going to fix what is wrong with our country any more. The problem is that corruption has spread into every facet of our lives. We have people who worship the all mighty dollar. We have people who believe that the one with the most toys, wins. And we have people, and corporations, who have no conscience at all when it comes to business matters. No one cares if their next door neighbor is getting laid off because his job is being outsourced to India or Poland because they are too worried about their own job.
We all want the luxuries that the media tell us we should have so we sell our souls to the credit card companies. But when it comes time to pay the piper, we can't. So to pay the credit card bills, we get a second mortgage to pay off the bills. Then, we lose our jobs to someone in another country. Now we have 2 mortgages, kids in school, a couple of car payments and no job. What do we do? File bankruptcy. Now, individually, it doesn't affect society as a whole. The problem is when thousands of people are in this situation. Mortgage companies are having so many people declaring bankruptcy that the banks that underwrite the mortgages are having solvency problems. Banks going bankrupt is bad. Very very bad. It causes everyone who can pay their bills to lose money. It causes stock prices to fall, the dollar to lose value in international markets, and it causes inflation to rise. Inflation, along with a higher unemployment rate, increased fuel prices, and tanking consumer confidence, is adding to the pressure on the government to bail everyone out. The problem with that is the government can't really pay for any kind of bailout without raising taxes. Taxes that are already bordering on the extreme.
I don't know if all of these are just symptoms of the disease that affects our country or if it is the cause. But it will not get any better in this country until we all just take a deep breath and own up to our responsibility.
Friday, February 1, 2008
Debt, Debt, and more Debt
For the last several months I have been scouring the web for tips on how to live well on less money. I have found a lot of good ideas. And some that are a little bit out there. But they all say about the same thing. Get rid of your debt.
I know that for some people that sounds nearly impossible. As a society, we have all gotten used to the instant gratification that comes with being able to buy whatever you want on credit. You find that great pair of shoes that are on sale for only $75 and you whip out the Visa or "Store" card and buy them on the spot. But if you don't pay off the balance every month, and how many of us can actually do that, you wind up with interest that will make those $75 pair of shoes cost well over $100 in the long run. And did you really need another pair of strappy black heels anyway?
With the way the economy is headed (and the credit crisis, housing crisis, and unemployment going up) a lot of people are beginning to realize just how over-extended they really are. If your house payment, car payments, utilities, and credit card bills are more than your income for the month, you are in big trouble.
Credit card companies are the world's biggest scam. They offer credit to just about anyone on the hope that people will buy more than they can afford to pay off every month. They make billions of dollars a year off of the interest. And the real kicker is that if you are ever late getting your paying in, they can legally double, or in some cases, triple your interest rate, making it even harder to get it paid off. Trust me, I have been there. And it really sucks.
I have found a couple of ways to get out of debt that don't involve bankruptcy. I will use our situation as an example of what not to do, or how to fix it if you already have.
When my husband and I first got married, we each had a credit card(visa) and I had a department store card. We didn't use them much, only for necessities like getting the cars worked on or replacing worn out clothes. Then I got pregnant with my daughter and my husband got a new job in a new town. So we had to move. No one would hire a pregnant girl so I couldn't work and we had the expenses of moving and setting up a new household. Visa time. Well, since I was pregnant before he got hired, the new insurance considered it a pre-existing condition and wouldn't pay the doctor visits. So that was $200 a month out of our already slim budget. Utility deposits, rent deposits, moving expenses, gas back and forth to get everything moved, all of that left us eating mac and cheese and ham sandwiches. And it also raised our credit card bills. By the time my daughter was born, we had bought the house we were renting, so we also had closing costs and insurance to pay. We were almost $2000 in debt in a matter of a couple of months. Now we had diapers, formula, baby clothes, doctor visits for the baby in addition to my hospital bills for the delivery on top of the student loan payments that were coming due, house payment, car payment, utilities, and the credit cards. So more credit card debt was building up.
By the time we finally decided that it just had to stop, we had 5 credit card with high interest rates (almost $22,000 in debt), 2 gas cards, 2 department store cards, a car payment, a house payment, and 2 kids in daycare. Even with minimum payments on the cards, the total everything combined was more than our monthly income. Then we discovered the Debit Card.
That was actually a wonderful day for us. It allowed us to completely stop using the credit cards. If we didn't have the money to cover it in the bank, we simply couldn't buy it. We were 13 years into a 30 year mortgage so we refinanced the house for a lower interest rate, cashed out enough equity to pay off 4 of the 5 credit cards(boy was it fun to cut up those cards) and continued to pay on the last one until we got the truck paid off. Then we began to apply the amount of the truck payment to the payment we were making to the credit card ( an extra $334 a month) and finally started getting that one paid off. A large cash gift from the Mother-In-Law took care of the rest of it.
Wow! No more credit card debt.
I know that most people cannot expect a large cash gift, but there are ways to get out of debt without going crazy.
1) STOP USING CREDIT CARDS! If you cannot afford to pay cash for it, do not buy it.
2) Actually sit down with all of your bills, bank statements, loan payment books, and a calculator. Make 3 columns, one with income amounts with every dime that comes in from every source for the month, one with the payment amounts due for the month not counting groceries, and the last column is for the amount of outstanding debt left on that bill. Add up each column and see if your bills are more than your income. Also compare your income to the balances due on all of that credit. You may be shocked to realize that you have $15,000 in credit card debt and that if you only make minimum payments every month, it will take you 12 years and $50,000 in interest to pay it off, if you don't add any more to the balance. That is an eye opener. And a real motivator for getting out of debt.
3) When you pay off a debt, you do NOT have extra money each month. Use that payment on another debt. If you paid off a debt that you were paying $250 a month on, like a car payment, you now add $250 to the highest interest payment that you have. Keep doing that until that debt is paid off. Then you take the combined payment amount (say...$550) a month, and add that amount to the next highest interest bill. And you keep doing that until everything is paid off. This is actually a fast and rather painless way to pay off your bills. You are not used to having the extra money anyway, so why not use it to get rid of debt.
Now, this is not a step by step guide for getting out of debt. There are a thousand different ways to do that, and just as many opinions on which way is the best. But you cannot get out of debt by using credit to make all of your day to day purchases. You have to make the decision to get out of debt all by yourself. No one can do it for you. If you are not willing to give up those shopping sprees or eating out every night, then no one can help you.
I know that for some people that sounds nearly impossible. As a society, we have all gotten used to the instant gratification that comes with being able to buy whatever you want on credit. You find that great pair of shoes that are on sale for only $75 and you whip out the Visa or "Store" card and buy them on the spot. But if you don't pay off the balance every month, and how many of us can actually do that, you wind up with interest that will make those $75 pair of shoes cost well over $100 in the long run. And did you really need another pair of strappy black heels anyway?
With the way the economy is headed (and the credit crisis, housing crisis, and unemployment going up) a lot of people are beginning to realize just how over-extended they really are. If your house payment, car payments, utilities, and credit card bills are more than your income for the month, you are in big trouble.
Credit card companies are the world's biggest scam. They offer credit to just about anyone on the hope that people will buy more than they can afford to pay off every month. They make billions of dollars a year off of the interest. And the real kicker is that if you are ever late getting your paying in, they can legally double, or in some cases, triple your interest rate, making it even harder to get it paid off. Trust me, I have been there. And it really sucks.
I have found a couple of ways to get out of debt that don't involve bankruptcy. I will use our situation as an example of what not to do, or how to fix it if you already have.
When my husband and I first got married, we each had a credit card(visa) and I had a department store card. We didn't use them much, only for necessities like getting the cars worked on or replacing worn out clothes. Then I got pregnant with my daughter and my husband got a new job in a new town. So we had to move. No one would hire a pregnant girl so I couldn't work and we had the expenses of moving and setting up a new household. Visa time. Well, since I was pregnant before he got hired, the new insurance considered it a pre-existing condition and wouldn't pay the doctor visits. So that was $200 a month out of our already slim budget. Utility deposits, rent deposits, moving expenses, gas back and forth to get everything moved, all of that left us eating mac and cheese and ham sandwiches. And it also raised our credit card bills. By the time my daughter was born, we had bought the house we were renting, so we also had closing costs and insurance to pay. We were almost $2000 in debt in a matter of a couple of months. Now we had diapers, formula, baby clothes, doctor visits for the baby in addition to my hospital bills for the delivery on top of the student loan payments that were coming due, house payment, car payment, utilities, and the credit cards. So more credit card debt was building up.
By the time we finally decided that it just had to stop, we had 5 credit card with high interest rates (almost $22,000 in debt), 2 gas cards, 2 department store cards, a car payment, a house payment, and 2 kids in daycare. Even with minimum payments on the cards, the total everything combined was more than our monthly income. Then we discovered the Debit Card.
That was actually a wonderful day for us. It allowed us to completely stop using the credit cards. If we didn't have the money to cover it in the bank, we simply couldn't buy it. We were 13 years into a 30 year mortgage so we refinanced the house for a lower interest rate, cashed out enough equity to pay off 4 of the 5 credit cards(boy was it fun to cut up those cards) and continued to pay on the last one until we got the truck paid off. Then we began to apply the amount of the truck payment to the payment we were making to the credit card ( an extra $334 a month) and finally started getting that one paid off. A large cash gift from the Mother-In-Law took care of the rest of it.
Wow! No more credit card debt.
I know that most people cannot expect a large cash gift, but there are ways to get out of debt without going crazy.
1) STOP USING CREDIT CARDS! If you cannot afford to pay cash for it, do not buy it.
2) Actually sit down with all of your bills, bank statements, loan payment books, and a calculator. Make 3 columns, one with income amounts with every dime that comes in from every source for the month, one with the payment amounts due for the month not counting groceries, and the last column is for the amount of outstanding debt left on that bill. Add up each column and see if your bills are more than your income. Also compare your income to the balances due on all of that credit. You may be shocked to realize that you have $15,000 in credit card debt and that if you only make minimum payments every month, it will take you 12 years and $50,000 in interest to pay it off, if you don't add any more to the balance. That is an eye opener. And a real motivator for getting out of debt.
3) When you pay off a debt, you do NOT have extra money each month. Use that payment on another debt. If you paid off a debt that you were paying $250 a month on, like a car payment, you now add $250 to the highest interest payment that you have. Keep doing that until that debt is paid off. Then you take the combined payment amount (say...$550) a month, and add that amount to the next highest interest bill. And you keep doing that until everything is paid off. This is actually a fast and rather painless way to pay off your bills. You are not used to having the extra money anyway, so why not use it to get rid of debt.
Now, this is not a step by step guide for getting out of debt. There are a thousand different ways to do that, and just as many opinions on which way is the best. But you cannot get out of debt by using credit to make all of your day to day purchases. You have to make the decision to get out of debt all by yourself. No one can do it for you. If you are not willing to give up those shopping sprees or eating out every night, then no one can help you.
Saturday, January 12, 2008
Outside the box
While trying to come up with ways to survive the coming lack of income, we have been trying to think out side the box. There has to be a way to make enough money to survive without selling your soul to do it.
Since I can't work for health reasons, that leaves my husband in a really tight spot. He is really feeling the pressure of having to support 4 people without a job. Stressful to say the very least. My kids, bless their thumpin' gizzards, are trying to be supportive of anything that will enable us to stay here. They are willing to eat pasta and beans forever if need be. My daughter wants to get a job so that she can make the house payment for us if we can't afford to.
Right now, we are investigating different ways to make a little bit of cash that doesn't involve selling insurance door to door or moving to Boston or California. Don't get me wrong, I am sure there are good things about those places, buried somewhere in the tax laws and history books, but I am a Southern Girl, born and bred. All of the family is here, and our cultural history is still strong in our family. Not to mention I don't want to walk into a restaurant and have another waitress look at our feet to see if we were wearing shoes after asking where we were from.
We have had a good run on the job front. 17 years working for the same company is almost unheard of these days. We have survived 6 lay offs, a couple of hostile takeover bids (failed) and my loss of ability to work. We have managed to pay off every single credit card we had (6 of the danged things), pay off the truck early, and still be able to eat well. We are probably in the best financial shape we have ever been in, at least until the ax falls sometime in the next couple of weeks.
Now we are looking into the possibility of delivering newspapers, setting up a website to showcase our state ( and sell related merchandise) and selling stuff on Ebay. Anything to make a few bucks. Hopefully, we will be able to make enough to stay put for a while for the sake of the kids.
I still want a place out in the woods. If we have to sell, that is where we are headed. But for the next few months, we will be looking for work "outside the box".
Since I can't work for health reasons, that leaves my husband in a really tight spot. He is really feeling the pressure of having to support 4 people without a job. Stressful to say the very least. My kids, bless their thumpin' gizzards, are trying to be supportive of anything that will enable us to stay here. They are willing to eat pasta and beans forever if need be. My daughter wants to get a job so that she can make the house payment for us if we can't afford to.
Right now, we are investigating different ways to make a little bit of cash that doesn't involve selling insurance door to door or moving to Boston or California. Don't get me wrong, I am sure there are good things about those places, buried somewhere in the tax laws and history books, but I am a Southern Girl, born and bred. All of the family is here, and our cultural history is still strong in our family. Not to mention I don't want to walk into a restaurant and have another waitress look at our feet to see if we were wearing shoes after asking where we were from.
We have had a good run on the job front. 17 years working for the same company is almost unheard of these days. We have survived 6 lay offs, a couple of hostile takeover bids (failed) and my loss of ability to work. We have managed to pay off every single credit card we had (6 of the danged things), pay off the truck early, and still be able to eat well. We are probably in the best financial shape we have ever been in, at least until the ax falls sometime in the next couple of weeks.
Now we are looking into the possibility of delivering newspapers, setting up a website to showcase our state ( and sell related merchandise) and selling stuff on Ebay. Anything to make a few bucks. Hopefully, we will be able to make enough to stay put for a while for the sake of the kids.
I still want a place out in the woods. If we have to sell, that is where we are headed. But for the next few months, we will be looking for work "outside the box".
Subscribe to:
Posts (Atom)
google search
Custom Search
