The Debt Crunch comes homeOctober 3, 2008 at 12:32 pm | Posted in Economoney | 1 Comment
As many have recently observed, we’ve been living in a debt bubble. Financing our lives and country with debt. At some point, what goes up must come down. What is spent must be paid. Karma returns. The thin balance of never quite enough pulls us over. I’ve had a couple of friends go through this recently.
Debt problems have become so commonplace that people think it is normal. But it shouldn’t be.
Do you have an issue? You may find the following useful to consider.
“If you answer “Yes” to any of the following questions, you may have a financial problem and should seek financial advice as soon as possible.”
– are you making only minimum payments on your credit cards?
– are you having difficulty paying your monthly bills regularly and on time?
– are you using your overdraft most months?
– are you uncertain how much you owe in total?
– are you using credit because you don’t have enough money for everyday expenses?
– do arguments about moeny cause problems in your family?
– are you charging more each month than you pay on credit?
– are you over your borrowing limit on your credit cards, overdraft, or line of credit?
– are credit collectors calling you?
– are you considering consolidating your debts?
In North America, credit counselors are free. They can suggest options you will likely not be aware of. And they can steer you clear of consolidation sharks and such. They can show you how to get the calls to stop. Help you see what your choices are to get back on course.
This stuff is not always easy to face. But it is very easy to loose control – an unexpected expense or a little overspending each month and soon the house of cards starts to fall. The sooner you face it, the better.
Much better if you step back into control and get a handle on it. Live within your means and spend what you have. The immediate shift away from credit is the hardest part. But it may take you just a month. You may loose some short term pleasure but you gain much greater security and control. You restore choice. You manage your money rather than money managing you.
Personally, I consider interest rates over twice prime rate to be usury/ loan sharking. Many cards raised their rates with the high interest rates in the early ’80’s and never brought them down again. We came to consider it OK. For the most part, this is profiting on the poor.
Christmas is coming and it’s the time of year many people blow it. I found the best thing is to make a list that’s affordable, check it twice (laughs), and buy early, spreading the cost out over 4 months. No Christmas after-shock. No impulse or last minute crowds. Fun for everyone. You only have 2.5 months. 😉
Remember – Christmas is for giving – of yourself. It has nothing to do with obligation. What do we teach our children if we drown them in toys they don’t care about? What about gifts from the heart? When my kids were young and we were less affluent, I told my family I’d be focusing resources on the kids and gave them my time and a good meal. They were good with that. And the kids got a few well thought gifts that lasted, some for years. Overspending gives more to the creditors than your family.
Every time you open your wallet you have a choice. Do you use Interac or Credit? How are the cards positioned in your wallet? How many credit cards do you always carry? Really? Do you really need all those cards? You do see that points are just an excuse to spend – and not give you a better price in the first place. And what value is a Sale if you don’t pay cash? 10% off on a 22% credit card? Thats no deal.
There is always a choice.