Thoughts on Debt

This holiday season, as you pack the presents under the tree, listen to Christmas songs, and spend time with family, please think of those who are less fortunate.  With financial struggles plaguing the economy and the world, there are many people suffering and I know first hand that the holidays can be an extremely depressing time if you don’t have any money.

I am not the type of person who needs a lot to be happy, but I am a giver.  You know a person who gets joy out of doing and giving to others.  There is absolutely no enjoyment for me in a holiday where I can’t financially afford not to give.  Being financially strapped can make you feel worthless and desperate.  It can occur without warning and of no fault of your own.

This year, I am not in this circumstance, but I know someone who is and I truly feel for them.  I realize that there is nothing worse than being poor at Christmas time.  Worrying about every dime you spend, going through stores and seeing people spending, and you worrying where your next meal is going to come from and when or if you are ever going to feel whole again.  I am one of the lucky ones, on the rebound, catching up again, and making it work.  This was not by luck, but by hard work.  It is hard to feel motivated when you feel down all the time, but keep holding on to the hope of the future.  You will come through and you will make it work.  And if you know someone who has fallen on some financially difficult times this holiday season, then please reach out to them, and try to do something to make their holiday a little brighter.  It will not only brighten their holiday, but it will make you feel really glad that you did something for someone else this holiday season.

Officially now in a recession, and looking down the path at a possible depression makes a lot of the nation’s elderly reflect back on their younger days.  One man spoke of his experiences from being a child during the Great Depression.  He told of the bread lines and the pan handling.  He said that people would go door to door looking for food, and no matter how hard the times were, his mother would always provide food for anyone that asked.  He said if someone came to the door needing food, his mother would prepare them a sandwich and usually they would eat it right there.  When they would leave they would put a mark on the curb, letting others that came by in need know that this house provided him with food.  He says that the tough financial times of his youth made it extremely difficult for him to spend any money, even after the Great Depression was over.  Now he worries for his kids and grandkids as he can see the trend moving towards another Great Depression, and wonders about the impact that this will have on the future of his family.

Although, our government is working very diligently trying to avoid another Great Depression, I am afraid that it is only a matter of time before the bread lines begin to form.  With more and more people facing unemployment and no new jobs on the horizon, we can only hope as we move forward that the changing political climate, can bring some new hope to our failing economy.

Today it was announced that Bush and the government are bailing out Citibank or Citicorp, because they are in debt and in danger of going under.  I just need to ask one question, how far in debt is Bush going to leave us when his reign of terror is over.  Seriously, I can’t really understand why they are continuing to allow these bailouts over and over again.  What is going to happen is that we are going to crash harder than ever before with the way he is going, and then there is going to be no one to bail us out.  We can’t keep pretending that there is not a problem here, nor can we keep pretending like these companies didn’t put this on themselves.  After years and years of giving too much credit to people, now they are surprised that they can’t pay it back? I think that was probably foreseeable.

I guess my biggest concern, which I think is a genuine one is being with how simple it is to get Bush to give out money, how many more companies are going to jump on this band wagon before January, and how many more bailouts are we going to let him do?

My fear is that all these bailouts are just holding off the inevitable depression we are heading for and are going to make it worse in the long run.  I really think that all Bush is trying to accomplish is to save face and hold off the depression in this country until after he leaves office.  Then that will make the Democrats look like they are the ones who did it and will more than likely guarantee that the Republicans will be back in control in four years.

These days I think that everyone is becoming more conscious about how they are spending their money.  The companies who have the necessity items and have them for less are about the only one’s that are profiting, as a matter of fact, it seems that overall most companies are really hurting and reports show that we are not buying anything extra these days.  This includes items like clothing, jewelry, electronics and so forth.  We are instead, looking for new and better ways to hang on to our money, and miscellaneous spending is becoming a thing of the past.  There are some very simple ways to go about saving some money, and so here are just a few of the ways that cutting back a little can save you a lot in the long run:

1. Make coffee at home rather than buy it every day. You’ll save about $2 a day or $40 a month. This is $480 a year, and that can be money in the bank.  Depending on where you go, it could be a lot more. 

2. Bring in lunch from home instead of buying it. You’ll end up with at least $5 - $7 dollars a day in your pocket.  That is a $25 per week savings at least, and a savings of $1300 per year.  Now that would make a nice vacation don’t you think?

3. Stop getting delivery of magazines and newspapers at home. Most of the content is available online and you can read it everyday—for free!

4. Shop around for credit card interest rates and consolidate credit cards, if you keep a balance.

5. Use cash or debit cards instead of credit cards and incurring interest charges.  Not only will this save you more money on the interest charges, but you will also be more aware of what you are spending your money on, and how fast it goes.

6. Save your stamps and pay bills online, usually for free.  Most companies will allow you to make payments right on their web site, either using a check or debit card, and most banks offer online bill pay services for nothing as well.  This is a very convenient way to pay your bills, and you can also put them on automatic payment, which is great because this way your bills will get paid on time, without missing payments and accruing late charges.

These days every little bit of savings helps.  It is nice to see the gas prices come down, but who knows when they will go back up again and grocery prices are still high.  So be sure to keep a good handle on your spending the rough economic times are not gone yet.

Many people are faced with debt and are doing what they can to get there heads above water.  With the economic trials people just can’t afford to spend the way they used to.  Hanging on and trying to put aside a few dollars here and there has become near impossible, so how do you address this, especially with the holidays quickly approaching.  Honestly, the best way to approach this is to try and buy now.  I know that sounds difficult to do, but for many people who are in this spot, what happens is you hold off on spending the money for the holidays until the very last minute.  Unfortunately, what happens in this case, is that you wind up spending way more this way on everything and leave yourself in a financial hole.  Last minute shopping leaves you settling for what is left and paying full price.  Spending a little bit each week towards Christmas is a great way to chop through that Christmas list in a hurry, while coming up with some really cute and creative ideas.

Look on the internet and try to come up with cute homemade ideas for holiday gifts.  For instance, the older relatives in the family always love something with a picture on it, or artwork done by their grandkids, so put some thought into it.  Make a picture collage, Holiday Ornaments, or a tee shirt with the kids hand prints.  All of these gifts will provide treasured memories for the family for years to come, and even better yet, they can be made for under $10 each. Make gifts for the neighbors and teachers at school. Try some homemade cookies in a cute cookie tin.  It is a great way to let people know that you are thinking about them this holiday season, without spending a fortune.

Being creative and smart will help you to shop the sales and clearances, get some great inexpensive ideas, and in the long run not only reduce your amount of holiday debt, but also reduce your stress going into the holidays.

The DOW Jones is up and then it’s down, so what should you do, should you take your money out now or wait.  Well recently while listening to a financial analyst he said some things that really made quite a bit of good sense to me.  First, he said that if you have money in the stock market and you can afford to leave it in there for the next 5 years, without drawing any of it out, then you should be fine, as this is the period of time that market analysts predict that it will take for the market to completely recover.  However, he said that if you have money in the market that you will need either for a child’s college education or for retirement during the next 5 years, then you should probably take it out now, while there is still some money in there.

I thought this was some really sound advice, especially since we have learned from past experiences in this country that pulling every dime out of the market will only cause it to further decline, so that really doesn’t benefit anyone.  Pulling out just what you think you will need during the next 5 years, makes some good sense.  After that if things improve you could have a much larger sum of money available to you.  Also, investing in the market now, while the cost of stocks remains low, is a great opportunity to buy in low and make a bundle in the long run.

It is not advisable to watch your stocks everyday, especially during the next few months it will be up and then down.  It is still working on balancing out, however it will get back on level ground before long, and wouldn’t you like to be one of the one’s who come out of this mess making a bundle? I know I would.

On some level, I think that we are trying to fool ourselves, or at the very least the government is trying to fool us, about our current financial standing.  I think that the bail out package that just went through was really just a way for our government to save face through these tough financial times, this way when we really do hit rock bottom, they can say we tried.  I think that also George W. really wants to get out of office, before the American public realizes how bad our economic situation truly is due to this war that he has use wrapped in.  In any case, I think that it is time for all of us to come clean.  We need to face the facts that as individuals and as a nation, we have not been financially solid for quite some time.  The availability of credit has allowed all of us to live well above our means for a long time, when in essence we never should be spending more than we have.  If we had stuck to this type of plan, then all this financial nonsense would have little or no effect on us, however, ours is a society of wealth solely based on credit.  The more credit you can attain the wealthier you can become, even without much actual money.  It is interesting at best.

Now in addition to the lies we have been telling ourselves and the ones that our government has been spouting, I am now seeing television ads that are again trying to trick us into spending more money than we have to for things.  For instance, I just saw a commercial for Kentucky Fried Chicken last night, and they show a family who is considering buying their complete dinner for 4 people for $9.99.  They go to the grocery store to see if they can buy all the ingredients for making the same meal, and it will actually cost them more than it would to go to KFC, so they just go there instead.  Now listen up, they show these people starting out by buying a $3 bag of flour.  First, it does not take $3 worth of flour to make chicken, secondly, most of us already have flour in our houses, so that cost is over inflated.  Don’t be fooled people, for $9.99 you are getting the drumsticks, which if you are a smart shopper you can get for a song.  Then throw on some instant mashed potatoes, and even some dinner rolls or boxed mac & cheese, or even beans, you can definitely make this meal for about half the price of what they are making it for.  Don’t buy into this type of advertising, they are just trying to get you to spend the money.  Walmart and Food Lion are both trying to do the same thing also, and trying to convince you that buying their premade food is much cheaper than doing it yourself.  Don’t buy it.  Shop the sales, cook ahead, make a meal plan, but don’t give in to buying fast food or prepackaged meals, the ones you make yourself are still more economical and premaking and freezing your own food will save you a lot of money in the long run.  It is time we were honest with ourselves.  We know what we have to do, but are we all too lazy to do it?

Now is the time to tighten the belt and to try and set aside some money each week for the future. How is it going? Overall, I do think that people are trying to save some money, but for many people they are not instituting the changes they need to survive. Many people I speak to on a regular basis are complaining about the prices on most items and are talking about cutting back, however, what I am finding is that most people don’t know how to even save some money. In speaking to a woman who has kids and works a regular retail job and so does her husband, she was talking about how even the discount stores are starting to charge really high prices for the everyday items and so she has stopped going to them. She was in the middle of having her lunch and was eating a pre made, store bought lunch in one of those little plastic containers, and I was thinking to myself, you can’t really afford to eat that for lunch. I could buy a pound of lunch meat and a loaf of bread and eat lunch for a whole week, on just what she spent on that one meal. People really need to realize that it is time to start making your own food, bringing leftovers for lunch, and saving money where ever you can. For instance, Food Lion has a commercial on TV that shows a mother and daughter looking at the ad and getting all excited about the $10 meals for four, premade at Food Lion. Now the mother was going to buy fast food. Well, fast food for four people would have run her about $20.00 at Food Lion she can get a spaghetti dinner for 4 for $10. Well, if you bought a box of pasta that costs about a buck (usually less) and another $3 for the sauce (it would be less if you made the sauce), so really you could make this simple dinner, which really only takes about 15 minutes to make for about $6 if you include salad and a drink. The point is, I guess that we really need to start thinking about making meals on the weekends and freezing them, things that are easy to fix and can just be thrown in the oven or something and we could save a huge amount of money. Also, shopping the sales and stocking up, and using coupons. These are all things that can start to add up to big savings. Get the whole family involved, have a weekend cook off and get the meals done for the entire week, plus reap the savings of not settling for fast food or premade, prepackaged meals. You must eat, but you must find ways to cut back the cost of it all. Cutting back means changing our lifestyles and our sloppy ways. We know we will have to eat all week, so we need to learn to plan ahead.

In understanding the title of this blog one of the most important things to understand currently is that this maniac is spending through this country’s money for what will require about a 50 year payback period. Now, it is not bad enough to say that we are still spending endless amounts of money on this war which to say the least is never ending in a country whose name we don’t even pronounce correctly. Don’t get me wrong, I realize that these people might have needed our help in the beginning (the verdict is really still out on this fact) but the war is basically killing the economy in this country and still we are fighting it and at home people are struggling just to survive. As if the war was not bankrupting us enough, Bush is now running around and bailing out all the big finance companies to make it look in the numbers that we have money that we really don’t have. He currently has a bill in Congress to allocate $700 billion more dollars to failing companies over the next two years. Well, that’s great people but didn’t anyone tell him his term is up in about 3 months. Realize that he is spending money that we don’t have, and where is it going to come from…US. That’s right we are going to be paying off all this debt because, let’s face it, we can’t spend money that we don’t have right? Is anyone really seeing this besides me? I don’t know but I wish when I was running a little short that I could just print up some more money and go spend it with no financial backing. Oh, that’s right, we can’t just print money that is illegal. Well, I guess it isn’t if you are the President of the US then it is okay to make more money if you need it. Don’t we have enough debt already. Making these companies look better is just making our economy worse. Don’t buy into it, you can’t fix this country’s problems by spending more money we don’t have. Don’t worry though, the bread lines won’t be forming until after George W. Bush leaves office, this way he will still look like the good guy and the poor President who takes over is going to be sunk by Bush’s two year plan to bankrupt us. Keep saving those pennies people, we are gonna need them.

Everyone thinks that using a debit card instead of a credit card, is the wiser, less expensive way to go.  Well, let me state it very frankly for you, this is only true if you are using your debit card wisely.  Let’s say that you have a credit card and you make 10 charges on that card then you will have to pay off the balance in about a month and the interest won’t accrue very much at all.  But let’s say that you have made those same 10 charges on your debit card and you haven’t correctly balanced your account and then you receive return check fees on those 10 items in the amount of $35 per item, then that would be $350.00 for charging those 10 items, so quite frankly it can cost more using your debit card if you are not careful with your money.

This quite frankly goes back to the old philosophy that the rich get richer and the poor get poorer.  Honestly, have you noticed that when you don’t have money, they charge you more money.  If you don’t pay your bills on time, they make them bigger by adding late charges and/or interest.  If you don’t have money in your account and a check comes in they charge you a fee.  Sometimes the fee is actually bigger than the item.  So the fact is, if you want to hang on to your money, then don’t buy what you can’t afford.  This can be difficult in trying economic times or when things come up, but quite honestly, this is the only way to get more money.

If you see yourself in this situation, work hard to rectify it.  Keep good records of what you have spent and what is in your account, and keep at least an extra hundred dollars in your checking account just in case you forget about something that you paid or have an automatic withdrawal that you forgot about.  These can be deadly if you don’t keep up with what dates certain things get withdrawn.  In any case make a plan and stick with it.  Good record keeping is the key, so stay on top of it and don’t be caught short, it will cost you big time.