Sunday Scribblings: My $.02

I was going to post today on a totally different topic, but when I opened the pages of the Boston Sunday Globe, I was reminded of the one issue I feel will cripple our way of life as a society: debt.

The article, entitled "Debtors' Hell," discusses how the rise of consumer debt has given way to debt collection, and how repossession—once meant for deadbeats—can happen to anyone: you, a family member, your best friend, your boss. Here’s one of the many stats I found shocking:
An estimated one of every 11 consumers has at least one credit card that is more than 90 days past due, according to nationwide data provided to the Globe by the credit reporting agency Experian.

Can’t imagine losing a car or a home because of an unpaid debt, but it goes on every day. Bad things happen to good people. Losing a job, an unforeseen illness, or foolish spending can derail the best-laid plans. Credit cards has become a way of life, and if the Visas, Fannie Maes, and Sallie Maes of the world have their way, we will be a financially enslaved cashless society within the next 10 years.

Ask yourself this: if your car broke down or you had to take a flight out of town to see your sick mother, how would you pay for it? Would you charge it or take the money out of your emergency fund? If you don’t have an emergency fund, this is how bad things start to happen to good people.

Long ago, my husband and I decided not to be cash poor/house poor. We cleaned up our credit cards, student loans, and car loans; last month we made our last payment and became debt free except for the mortgage. No magic bullet, we just saved money, didn’t buy things we couldn’t afford, talked about money decisions together, and stuck to a budget. Believe me, it hasn’t been easy because my husband decided to start his own business last year. We don’t have the newest gadgets or latest toys. But I wouldn't change the feeling of having cash in my pocket for anything.

There are no easy answers here. I know credit cards can keep families afloat in the hardest of times. So for this Sunday Scribbings, my advice is to save your $ .02. You never know when you might need it.

Comments

mareymercy said…
For more information on this subject (TONS more!) check out this site.
January said…
Thanks for the link--I'll check it out.
paris parfait said…
January, really excellent points here. It's frightening how close we can be to financial meltdown!
Catherine said…
We are fortunate to have lots of savings. Part of it is good fortune, but part of it is choice - to save a good part of spare earnings rather than constantly redecorating the house and taking overseas trips as many do.
In the case of the sudden trip, we would charge it, of course, for the interest free loan for a month, and for the hotpoints on the credit card, and because it actually saves bank fees to make all purchases on the credit card. All this only works if you pay it off in full each month, as we do.
gma said…
Absolutely right. Those pennies add up.
wendy said…
Even though my husband and I are fortunate, and have made prudent financial decisions, I feel the need to hide this post from hom...never to be seen. He would say..."see even an ARTISTIC type isn't as loose and free wheeling as you are!" He'd be right...sort of.

Hum. I'm thinking....you've made me re-think.......

good job.
January said…
Catherine: Once, I was a big fan of the points system on credit cards, but found that I didn't use them as often as I thought I would. It's been my experience that debit cards can be used like credit cards and the money comes right out of your account without fooling with the interest.

Wendylou: If I could urge you (or anyone else) to do anything today, it would be to get on a budget and get control of your finanical life. Think of all the fun you can have by paying cash for things, and knowing you can afford the really important stuff. Life is too short to worry about money.
This comment has been removed by a blog administrator.
This sort of issue puts plenty of stress on relationships as well. From the letters I receive, money might not buy happiness but it can certainly buy away plenty of relationship pain.

To Love, Honor and Dismay
Jennifer S. said…
very wise words
Anonymous said…
Very good points! My husband and I are pretty agressive savers, and it has certainly paid off in one important area: Our mental health. I feel so secure knowing that we have an emergency fund that will (hopefully) pull us through a crisis. It makes the mini-crisises that come up--broken washer, pipe bursting, car breaking down--that much more bearable.
Unknown said…
I agree! makes me sick to my stomache...

love visiting your site!
Kamsin said…
I'm scared by the credit limit my card company has given me despite the fact I could never pay it off if I maxed it out. You wonder how they make these decisions! I'm a way from being debt free having gone to grad school last year, but I'm getting there bit by bit and this post has helped give me the motivation to check out what extra savings I can make.
claireylove said…
You're a wise one aren't you, January? Good post.
Kay Cooke said…
Makes a whole lot of cents!

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