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And I can't help but throw in an advertisement for Dave Ramsey's principles here:
DITCH THE CREDIT CARDS!!!!!!!
You're a slave to the system by having one whether you use it or not. Just look at how they're jerking you around and you have absolutely no control, even after years of "faithful" service to them! You're nothing more than a number that they can print out on paper, use it as toilet paper, crumble it up, and flush it down the toilet!
I hear excuse after excuse for why to keep one...and that the balance is always paid off...etc. Just cancel it and live on the money you have...plain and simple. It's not as hard as you think. The hardest part is restraining yourself and re-adapting your habits to live off of what your "real" money can provide. Get over that mental hurdle and it's, dare I say, easy.
End of public service announcement.
So what do you do about a car loan, student loan, or mortgage? That's also all debt. Unfortunately, I had to pay my way through college and working part time at a fast food restaurant barely paid for my car insurance and gas money . So it was either find a full time job or get an education with debt. I opted for an eduction where I can make more than $8 an hour.
As for the mortgage, I don't know anyone with $200K laying around to buy a house and that is the average price of a house in my area. That doesn't include taxes or insurance. And for $200K we're not talking great school districts!
I did not have $42K laying around to buy my car. Yes, it was a lot, however I don't own a regular car. i have an extremely limited edition vehicle that will be one for parades in 20-30 years. And it was something I wanted for 25 years - well the stripped down plain Jane version.
I'd rather have these debts then live like a Monk....no offense to any Monks out there!
Three years ago I opened a B of A checking account because I was moving from CA to TN and access to that account would be available many places across the country. A little more than a year ago I opened a Royal Caribbean Visa card through B of A that accumulated points for redemption with Royal Caribbean.
Fast forward to now and the recent government bailout of B of A. It wasn't enough that B of A had to have one bailout, so they got MORE money (because the acquisition of Merrill Lynch was going to cost more than originally thought).
The Merrill Lynch buyout was going to result in MANY layoffs. So basically, our taxpayer funded bailout was HELPING TO FUND layoffs.
I don't care that the stockholders might get a lower dividend. I don't care that the overpaid Execs might lose their inflated bonuses. And I find it insulting that the taxpayers bail out B of A and, in turn, thousands lose their jobs.
So, several months ago I closed both my B of A checking account and my Royal Caribbean Visa IN PROTEST of B of A's actions. I wish more people would do the same. I've moved my checking account to a local bank that has nothing to do with the bailouts. I intend never to have anything to do with B of A again.
When I closed my accounts the woman at the B of A Branch asked why I was closing them. I flat told her that I wanted nothing to do with B of A's bailout and I didn't like it, or the fallout, one bit. She smirked, but said nothing.
Location: The place where the road & the sky collide
23,814 posts, read 34,678,989 times
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Quote:
Originally Posted by anifani821
You know - I didn't look at the back of a credit card when I read what you wrote, cause I have noticed many times in years past that South Dakota has been there! LOL! And I remember thinking . . . what the heck??? South Dakota??? Delaware - no surprise. But I always did find South Dakota curious.
Ani, South Dakota was the 1st state to allow very high interest rates but Delaware one-upped them. LOL, Delaware is pretty much owned & operated by DuPont, but DuPont doesn't have quite enough jobs for everyone, so they did the banking free-for-all laws (or lack there-of).
So what do you do about a car loan, student loan, or mortgage? That's also all debt. Unfortunately, I had to pay my way through college and working part time at a fast food restaurant barely paid for my car insurance and gas money . So it was either find a full time job or get an education with debt. I opted for an eduction where I can make more than $8 an hour.
As for the mortgage, I don't know anyone with $200K laying around to buy a house and that is the average price of a house in my area. That doesn't include taxes or insurance. And for $200K we're not talking great school districts!
I did not have $42K laying around to buy my car. Yes, it was a lot, however I don't own a regular car. i have an extremely limited edition vehicle that will be one for parades in 20-30 years. And it was something I wanted for 25 years - well the stripped down plain Jane version.
I'd rather have these debts then live like a Monk....no offense to any Monks out there!
There is good debt. A mortgage (one you can afford) is good debt, b/c it represents investment in an asset, and an asset increases your net worth.
So not all debt is bad.
We live in a world where sometimes we have to make tough choices about borrowing money. We have put FOUR KIDS through college and are finishing up with # 5. We could have socked that money away into savings, or paid off our house with that money. But we wanted our kids to start off without student debt. We have earned a lot of money but four of the five kids went to private colleges and the expenses were very high. We added it up recently and perhaps that was not the best decision on our part - as far as our own finances, but again - we did this as a legacy to our kids - so they could have a good start in life w/o debt. We had no idea that things would occur in OUR lives - from medical problems to job loss - that would impact us financially - and no one could guess that our 401Ks, where we had put every penny we could spare - would end up being negatively impacted as they have.
These things happen. You make the best decisions you can based on your goals. Sometimes, those goals will necessitate taking on debt. Responsible people keep that debt manageable.
As long as you are responsible with your goals, don't be afraid to do things wh/ will add to your net worth. We are in the middle of an extraordinary financial meltdown wh/ is unlike anything this country has experienced before. We will rebound from this. Be cautious now but plan for the future. Things will turn around in the next year. Don't let this current financial crisis keep you from working towards your goals.
There is good debt. A mortgage (one you can afford) is good debt, b/c it represents investment in an asset, and an asset increases your net worth.
So not all debt is bad.
We live in a world where sometimes we have to make tough choices about borrowing money. We have put FOUR KIDS through college and are finishing up with # 5. We could have socked that money away into savings, or paid off our house with that money. But we wanted our kids to start off without student debt. We have earned a lot of money but four of the five kids went to private colleges and the expenses were very high. We added it up recently and perhaps that was not the best decision on our part - as far as our own finances, but again - we did this as a legacy to our kids - so they could have a good start in life w/o debt. We had no idea that things would occur in OUR lives - from medical problems to job loss - that would impact us financially - and no one could guess that our 401Ks, where we had put every penny we could spare - would end up being negatively impacted as they have.
These things happen. You make the best decisions you can based on your goals. Sometimes, those goals will necessitate taking on debt. Responsible people keep that debt manageable.
As long as you are responsible with your goals, don't be afraid to do things wh/ will add to your net worth. We are in the middle of an extraordinary financial meltdown wh/ is unlike anything this country has experienced before. We will rebound from this. Be cautious now but plan for the future. Things will turn around in the next year. Don't let this current financial crisis keep you from working towards your goals.
I think it was noble of putting/paying for your kids through expensive schools, but now you and your husband are struggling to pay bills when you should be enjoying things later in life.
I think the lesson many can learn from your example is to use cc's as a LAST resort (unless you pay in full 100% and get cash rewards) and/or have a 1-2 year emergency fund on top of a healthy conservative 401k plan.
I was told a long time ago that kids can borrow $$ for school but you cannot borrow money for retirement......so true...
...I'd rather have these debts then live like a Monk...
And that's the basis for Dave Ramsey's slogan:
"Live like no one else so you can live like no one else!"
If "living like a Monk" means knowing where every dime of your money goes each month and it doesn't go unless you tell it to, then size me up for a robe.
All the debts you mention can be paid in cash, eventually. The core of the principles are that if you don't have the cash, you don't buy it right now...especially not just for the reason of you wanted it your whole life and you think you deserve it. You knock out debts to the point where you control every dollar that comes into your bank account...not some promise note. You take that money to live off of, invest, and give...and yes, eventually, you pay cash for everything...cars, houses, boats, whatever. THEN you've truly earned it, and dare I say, might even appreciate it a little more.
But, like I said, I don't mean to preach here...and I certainly don't mean to insult anyone and their lifestyle. To each their own. I can only try to throw out bits of help and advice, even if I know the response is like Sheriff Buford T. Justice said to his son Junior after stopping into the dinner for a Diablo Sammich and a Dr. Pepper and asking if he wants something: "DAVE RAMSEY? We got no time for that crap!!!"
"Live like no one else so you can live like no one else!"
If "living like a Monk" means knowing where every dime of your money goes each month and it doesn't go unless you tell it to, then size me up for a robe.
All the debts you mention can be paid in cash, eventually. The core of the principles are that if you don't have the cash, you don't buy it right now...especially not just for the reason of you wanted it your whole life and you think you deserve it. You knock out debts to the point where you control every dollar that comes into your bank account...not some promise note. You take that money to live off of, invest, and give...and yes, eventually, you pay cash for everything...cars, houses, boats, whatever. THEN you've truly earned it, and dare I say, might even appreciate it a little more.
But, like I said, I don't mean to preach here...and I certainly don't mean to insult anyone and their lifestyle. To each their own. I can only try to throw out bits of help and advice, even if I know the response is like Sheriff Buford T. Justice said to his son Junior after stopping into the dinner for a Diablo Sammich and a Dr. Pepper and asking if he wants something: "DAVE RAMSEY? We got no time for that crap!!!"
I understand what he means, but like Ani said (to which I agree) which is there is "good debt" and bad debt. Having a mortgage where your debt/income ratio is low is good debt IMO. Racking up CC bills and not knowing how to pay them is bad debt imo.
And I can't help but throw in an advertisement for Dave Ramsey's principles here:
DITCH THE CREDIT CARDS!!!!!!!
You're a slave to the system by having one whether you use it or not. Just look at how they're jerking you around and you have absolutely no control, even after years of "faithful" service to them! You're nothing more than a number that they can print out on paper, use it as toilet paper, crumble it up, and flush it down the toilet!
I hear excuse after excuse for why to keep one...and that the balance is always paid off...etc. Just cancel it and live on the money you have...plain and simple. It's not as hard as you think. The hardest part is restraining yourself and re-adapting your habits to live off of what your "real" money can provide. Get over that mental hurdle and it's, dare I say, easy.
End of public service announcement.
You can scream and shout all you want about ditching the credit cards, but since we have a debt based monetary system, someone *HAS* to go into debt for you to save your money. All money = debt. So the dollar in your savings account is someone else's debt.
The system only works by someone going into debt.
If everyone collectively paid off their debt, we'd have ZERO money left in society.
You can scream and shout all you want about ditching the credit cards, but since we have a debt based monetary system, someone *HAS* to go into debt for you to save your money. All money = debt. So the dollar in your savings account is someone else's debt.
The system only works by someone going into debt.
If everyone collectively paid off their debt, we'd have ZERO money left in society.
That's true, but we did function as a society when credit cards didn't exist and we did a better job of saving....correct?
That's true, but we did function as a society when credit cards didn't exist and we did a better job of saving....correct?
How did we function then?
The money was then backed by production. We don't produce much anymore. That's why real estate was the last hurrah and now everything is collapsing. There's nothing left. We've exported everything and the administration is trying really hard to boost housing because that's all that's left.
The money supply can only increase by people taking on more debt and the banks lending it. But no one wants to take on debt and the banks don't want to lend either. That's why we're now seeing a severe contraction. That's also why Obama and company keep talking about increasing lending and getting credit to flow again.
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