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.

Many people find themselves in hard financial times and are wondering what they can do to dig themselves out of the hole they are in. Well, the key to it all is devising a budget and sticking to it. Many of us believe that we are already living on a budget, however, unless your budget includes a savings, then it is really not a budget. A budget is not scrimping and living paycheck to paycheck paying whatever bills you can each week, it is much more than that. It is a financial plan, the foundation by which you determine how much you can afford to spend on the extras. Built into your budget must be a savings plan that will allow you to put no less than 5% of your income aside for emergencies. I personally prefer a two savings plan, where you divide your savings into 2 separate accounts, one for true savings and one for savings for special things that you would like to do like a vacation, or for a special item you want like a new TV. This is a good way to be able to reward your hard work saving and feel a benefit from it. It will make you feel less deprived in the long run if you reap some benefit from the savings.

In order to create a budget your monthly income must exceed your monthly expenditures. For instance, you can not budget your money if your monthly expenses are $3000 per month and your monthly income is $2400, this will not budget out. If after writing down your expenditures for a month and your income, you find yourself in this boat then it is time to trim the fat off your regular monthly spending and if you still can’t get your expense low enough then it may be time to consider picking up an extra job. The fact is that a budget is a plan by which you spend, and without one you are free falling into a life of poverty.

Keeping your life in balance will allow you the peace and harmony that you seek from life. Having enough money to pay the bills with a little left over will allow you to sleep better at night without worry. Take the time to work out your budget and you will see how easy it is to keep your finances under control.

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.

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?

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.

Granted the US economy is not doing well, but if you are suffering because you have accumulated too much debt and you have not had any mitigating circumstances such as illness or death, then it is time to set yourself straight and accept some personal responsibility. Unfortunately many people may not like to hear this, but most debt comes from overspending and reckless spending. Some people can’t help but have the newest and latest things on the market, even if they can’t really afford them. Many people are trying to keep up with the neighbors, the designer clothes, and the new cars, without having the income to support doing so.

If you have money, and you work, then you need to try to live within your means. Sometimes that isn’t fun, but it is very freeing to know that you have very little money going out every month, and it is extremely rewarding to watch your savings and 401K accounts grow. There is something so peaceful about not owing everybody and their cousin money, and about not having bills piling up while you are riding around in your new car. With the economy struggling you need to tighten your belt even further, which may mean putting off that vacation you have been saving for or reducing it to a smaller one. You must be smart, and at this stage of the game if you are wallowing in debt, you need to start up a plan to get it to a manageable amount quickly. That may mean cutting out the luxuries, saving money on your current bills, cutting coupons, or even taking on a second job. You need to begin getting those bills paid off and living within your means before things get even worse.

No one is really sure how long the prices on necessities are going to be rising for, but they do all agree that we are nowhere near the end yet. It is time to scrape every penny together and save it. Don’t spend without worry, that could be money that you will need to live on next year. Save at every opportunity and the payoff will be great.