JimBob got a raise at work. Not much, just $100 per month, but it’s a huge deal because JimBob and his family have been living paycheck to paycheck and have no money for anything extraneous. What does Jim-Bob do?
(guest article by MSB contributor, ‘Lauren’)
As JimBob is a normal member of our society he dithers back and forth between paying off some of his credit card debt or buying that new bike he’s been wanting. He already pays for a gym membership, but he’s been wanting the bike, and staying in shape is important.
At the bike store he sees a display that triggers his well exercised WANT reflex and he walks out with a new bike and $1000 in new debt. But he justifies it by saying that with $100 more per month he can have it paid off in less than a year. And anyway, he can use his credit card “rewards” to get something sweet for his wife.
He gets home to find that his wife has enrolled their child in a new sport, based on the expected new income. Now they’re $50 more in the hole than when they started. They end the day wondering how they’re going to make ends meet, since everything they have is an absolute necessity.
There’s no possibility of canceling the new sport and depriving the child (unthinkable cruelty!) or taking the bike back. There’s a processing fee for returns and they just can’t afford it. Nor any thought of canceling the gym membership, or forgoing his wife’s monthly spa trip, or their annual trip to Woop-di-do Land.
Somehow they’ll make it work.
JimBob and his wife Julie consider themselves victims, and in reality they are. They’re victims of a society that glorifies credit and debt while failing to teach financial responsibility. A society that rewards spending and vilifies saving.
Over and over I’ve heard various politicians, bank executives, and even private citizens say that we can buy our way out of the hole we’ve dug as a society. The answer is always more money. We’re at the end of our rope, financially, but everything we spend it on is absolutely necessary! Need MORE, say those spending the money. Raise the debt ceiling! We must have more money to solve the problems!
Just like JimBob and Julie, more money is not the answer. On a personal level or political, the answer is self-control, short-term deprivation of “wants” for a long term gain.
But just like any other addiction, in order to take that step JimBob and Julie must first acknowledge that there is a problem.
After a long and earnest discussion, JimBob and Julie took the bike back and swallowed the restocking fee. They agreed to cancel the gym membership and stop the spa trips. They canceled three of the child’s “activities” and agreed to spend that day together as a family.
Recognizing their own spending habits, instead of leaving the “saved” money in the bank they pulled it out and put it in an envelope in the house, one labeled “credit card debt.” Half of JimBob’s salary increase also went in that envelope and the money was used to pay off one credit card at a time. All change and small bills were put in a jar.
Within a year they had paid off enough of their credit card debt that they felt comfortable in taking the annual trip to Woop-di-do Land—but they paid for it with the change they’d saved during the year rather than using credit.
JimBob and Julie have fallen into a new lifestyle, one where they think about what they’re spending and how, where money is a means to an end rather than an end in itself. They now have the option to save or spend, not because of how much they make but because they control what they have.
A week after returning from Woop-di-do Land, JimBob ran across a site called the Modern Survival Blog. The rest is history.
JimBob got a raise at work. Not much, just $100 per month, but it’s a huge deal because JimBob and his family have been living paycheck to paycheck and have no money for anything extraneous. What does Jim-Bob do?
(guest article by MSB contributor, ‘Lauren’)
As JimBob is a normal member of our society he dithers back and forth between paying off some of his credit card debt or buying that new bike he’s been wanting. He already pays for a gym membership, but he’s been wanting the bike, and staying in shape is important.
At the bike store he sees a display that triggers his well exercised WANT reflex and he walks out with a new bike and $1000 in new debt. But he justifies it by saying that with $100 more per month he can have it paid off in less than a year. And anyway, he can use his credit card “rewards” to get something sweet for his wife.
He gets home to find that his wife has enrolled their child in a new sport, based on the expected new income. Now they’re $50 more in the hole than when they started. They end the day wondering how they’re going to make ends meet, since everything they have is an absolute necessity.
There’s no possibility of canceling the new sport and depriving the child (unthinkable cruelty!) or taking the bike back. There’s a processing fee for returns and they just can’t afford it. Nor any thought of canceling the gym membership, or forgoing his wife’s monthly spa trip, or their annual trip to Woop-di-do Land.
Somehow they’ll make it work.
JimBob and his wife Julie consider themselves victims, and in reality they are. They’re victims of a society that glorifies credit and debt while failing to teach financial responsibility. A society that rewards spending and vilifies saving.
Over and over I’ve heard various politicians, bank executives, and even private citizens say that we can buy our way out of the hole we’ve dug as a society. The answer is always more money. We’re at the end of our rope, financially, but everything we spend it on is absolutely necessary! Need MORE, say those spending the money. Raise the debt ceiling! We must have more money to solve the problems!
Just like JimBob and Julie, more money is not the answer. On a personal level or political, the answer is self-control, short-term deprivation of “wants” for a long term gain.
But just like any other addiction, in order to take that step JimBob and Julie must first acknowledge that there is a problem.
After a long and earnest discussion, JimBob and Julie took the bike back and swallowed the restocking fee. They agreed to cancel the gym membership and stop the spa trips. They canceled three of the child’s “activities” and agreed to spend that day together as a family.
Recognizing their own spending habits, instead of leaving the “saved” money in the bank they pulled it out and put it in an envelope in the house, one labeled “credit card debt.” Half of JimBob’s salary increase also went in that envelope and the money was used to pay off one credit card at a time. All change and small bills were put in a jar.
Within a year they had paid off enough of their credit card debt that they felt comfortable in taking the annual trip to Woop-di-do Land—but they paid for it with the change they’d saved during the year rather than using credit.
JimBob and Julie have fallen into a new lifestyle, one where they think about what they’re spending and how, where money is a means to an end rather than an end in itself. They now have the option to save or spend, not because of how much they make but because they control what they have.
A week after returning from Woop-di-do Land, JimBob ran across a site called the Modern Survival Blog. The rest is history.
I’m JimBob
A lot of us have gone through this.
Agreed. The important word there is “through.”
Agreed, through and lesson learned. Not everyone though. John & wife make big bucks but have cycled through debt and recovery several times and still don’t get it.
Good read Lauren. A lot of us could use a lesson or two like JimBob. The JimBobs of America could also do a lot worse than YouTube Dave Ramsey- Stop Giving Away Your Money. Good stuff, Dave. Thanks!
Dave Ramsey is amazing. He’s one of the few people who can and will tell someone when they’re full of it, or their financial plans suck.
Well congrats on the pay raise,.JimBob.
What I ( we ) do (at my maybe $40.a month raise) is to see how much inflation has ate up that little pay a month raise. See where we stand and talk as a couple about further expenses. What extra money we have goes into preps, necessities, not trips. (Unfortunately that’s always ‘on the back burner’.)
We have a mutual understanding and know where our priorities are
And burn those credit cards.
Lots of stay at home exercise to do no need for a gym membership.
Sorry to blow up your world, JimBob and Julie.
Communication would have helped their situation immensely, but they did eventually learn!
I disagree. Getting rid of your credit cards will only hamstring you when finances are tight. A credit card in good standing with a generous purchase limit can bail a person out of an unexpected expense when there’s no other way to come up with the money on short notice. The trick is to use them sparingly and then pay them off every month to keep them in good standing. Pick one thing that you need regularly and buy that item on the CC. For us, since we don’t use much gasoline, we buy all of it with a CC and pay it off when the statement comes.
CD in Oklahoma
Some people have the self control to do that. Many do not. JimBob and Julie recognized that if there was money in the bank they would be spending it, so they elected to go the envelope route. Others find that if there’s a balance on the card they will fill it up so getting rid of the cards is important.
Self control has to be learned, and those just starting this journey HAVE NONE. They have to learn other tricks to keep themselves from falling back into those patterns. For many, getting rid of the cards (or simply putting them in a locked safe at home) is absolutely necessary.
I don’t know how many on here can remember the days when they repossessed your credit cards. Yep, you were told to cut the card in half and send both halves back to the CC company immediately. (The main way to use the card back in those days was to run it through an imprint machine, but the number could be given by voice over the telephone. Most cards don’t even have raised text on them anymore.) Been there, done that, and it was certainly a wake-up call, but I digress.
Lauren, in your scenario, since JimBob and Julie (my neighbors maybe?) haven’t yet maxed out their CCs and had their accounts frozen, my suggestion would be that they can still use them along with the envelope system to keep that source of credit available if they should need it. They will need to have to practice a certain amount of money management and discipline for the envelope system to work for them anyway. Assigning the CCs as “Gas Cards”, putting them in their cars instead of on their person if they have to, and putting cash into the “Gas Card Envelope” isn’t a major deviation from going cash only envelope system, is it?
Disclaimer: I certainly am not a Financial Advisor! I place them down there with Doctors that can’t heal themselves and Lawyers that can’t keep themselves out of legal trouble, and always wondered why a Financial Advisor needed to work at all, little alone taking other people’s money that didn’t have enough, if they were so danged good with personal finances.
CD in Oklahoma
I know a lot of people who do something similar to your gasoline and their cards are the ones that accumulate travel miles or airfair, the use them for their kids flying to and from school on the mainland
CD……I agree with you on wise use of CC ,,years ago when I started ranching every body carried rolls of cash to do business with ,,,business money was just that ,,,for business,,,,,if you said I’ll pay you with a check you were looked down on and most offen could not make the deal ,,,now days that has changed some ,, I don’t see much difference with the use of CC today , one thing I miss is it was common to do a deal on a hand shake. Don’t see much of that now ,,
CD, 1000% agree!
CD
I do see your point. Emergency use. But we are being forced.
Example-
A yr ago,.I fueled up the truck at our usual camp town. They no longer accepted checks. Luckily I had enough cash. U can’t even read the numbers on my credit card.
But I refuse to be the norm.
My auto insurance goes up.because my credit numbers are mediocre. Why? No active credit. Why? I pay with cash.
My buddy pays his phone bill in cash. An added $5 fee because.he used cash, not credit. BS
Fall into the demise of the NWO.
An awaiting tatoo for all to be able to purchase? It’s heading that way.
666 anyone
Joe c I know God sees what is in a mans heart. The mark of the Beast is in the heart and mind of a man (woman).
That said currently using a credit card responsibly is only sensible. Use it, pay it off next payday get some excellent credit is not bowing to Satan. What kind of food reserves could your buddy build up with better Auto Insurance, not paying extra fees and all that.
Just my 2 cents 🙂
I hear ya, but that is not what I’m saying.
THEY WANT u to use credit cards. Tracking your every purchase? Is that what we want? NO.
How far do you want THEM to involve THEMSELVES in your life? Continulessly?
Every aspect?
Penalized for using cash? No high credit score because u choose.not have a known, followed purchase with a cc? Well that’s the norm.
A cashless society. For.the better good.
Really?
My coinless.2 cents. 😁
Also how about those cc experimental employers that are implanting chips into their ohh sooo dedicated employees? Easier access to enter locked establishments. Vending machines etc Easy swipe of the hand your in as Flinn. No card no ID access.
Great convince.
What’s next grocery purchases?
Easy swipe of the hand.
The Mark.
Joe c I hear you and I choose what I buy with a credit card vs. what I pay only cash for. They must and will track you just be aware of what your profile adds up to. Be a Small less threatening Fish in there eyes.
That way you have good credit and use of cash as tools on your belt.
Proverbs 1:5 “let the wise listen and add to their learning and let the discerning get guidance”.
Very nice Lauren. Some learn, some never do. Some never get in the spend, debt, mess to start. I discovered this in my early 20s, dug out and never did it again. 💲
I was lucky enough to learn from other people’s mistakes. I’ve watched people’s worlds blow up because they didn’t KEEP this under control. All the talk last week, after Ken’s article on prepping broke, triggered this.
Yahhhh!
I did it!
I was a head of you Grey. Yes I really was.!!!😁
Yes good.artcle, Lauren.
I was just too darn excited to get thru to say as such!
I really was gonna be the first commenter! One hour later of.my tries, Grey beat me to it!
Lol
LOL. Thanks
Joe c,
I saw that, call you Fast Finger Freddie from now on!! 🤣
Well written and wise article Lauren 🙂
Thanks. Coming from you that means a lot.
I totally agree!
I agree.
CD in Oklahoma
Thanks Lauren,
After this week it’s nice to read something with a happy ending …
Yeah, I removed all references to a specific dollar amount…except that one. Silly me.
Lauren
A while back you commented that your finances have been challenging at times. Is this article based on some personal experiences? I hope your writing career will flourish and give you economic benefits as well as the obvious personal satisfaction. You definitely have a talent.
Yes, achieving the lifestyle, no debt, and some self-sufficiency is not due only to luck or chance, but effort, planning and choices. Just so some do not think there are no sacrifices to make, consider my own – 6 moves for work, back to college at 39 with three kids, one failed business and two successful ones … – never give up.
Not at all. I was lucky/smart enough to learn from others’ mistakes rather than my own.
7 years ago I quit my job to focus on my writing. I felt strongly that this was where I needed to go, and that was emphasized by a great deal of prayer and soul searching (i.e., panicked whimpering from me and firm instruction from Him). I was able to follow through largely because I had no debt, with a paid off car and money saved for the time I expected to be “jobless.” With a great deal of help from a higher power I’ve lasted 7 years. I still have no debt. In that time I’ve published four books, helped my mother through her fight with cancer and am now the primary caretaker for my father who has dementia.
In the last 7 years I have learned to live on next to nothing, and I’m always stretching the boundaries of my self sufficiency. With what I see coming in the future, I think this training period will serve me well in the future.
Giving up is not an option. 🙂
👍
Thumbs up to you, Lauren, and all ya been going thru/ have been thru
“Fight the good fight”
Triumph
Lauren I’m going through the same kind of thing with my parents right now. My mom is in a home (she’s 89) and has dementia. My dad had a stroke 2-months ago (recovered almost 100%) had his Gallbladder out 2-weeks ago, came home for a day and had tto go back in the hospital for internal bleeding and is now in a rehab home for a few weeks till he gets his strength back. He’s 90-years old and still drives even after the stroke he is all there.
A few years ago I sold my home (a double-wide mobile home) banked the money (bought silver as I don’t trust banks much) and moved in to take care of my aging parents. It’s lots of work but it needed to be done and none of my siblings were going to do it.
I will buy another home once they pass on, but till then ‘m here to help them every day.
My mom is in the home for the rest of her life and interaction with her is just going to visit and spend time with her. But my dad and I go out and do things, we play with Amateur radios (he’s working to upgrade to General class) we go on day trips to museums, we go camping out on the lake, we target shoot.
None of these things (other then talking on the radio) he would be able to do very well on his own. But we both enjoying doing them together, I don’t have many years left to do things with him as he’s over 90-years old. We both enjoy the things we are doing.
I don’t see it as a burden as much as something you do for family.
Thank you Chuck for being such a good kind man. We need more men like you. Bless you
Hi Chuck,
I haven’t heard from you for awhile from the other site and it’s so good to know you are okay. I’m glad you appeared here. Take care!
Chuck: I would love to have more income, and do fun stuff with Dad, but it’s proven impossible to both stay home with him and also make a living. Maybe you could provide some suggestions on how to start a business? I’ve tried and I’m lousy at it.
Chuck
Both of my parents have passed on. I had the pleasure of helping both of them in their last days. Some times it was difficult and I got aggravated but I would not change it for the world. DW was awesome in her care for them. I could not have done it without her. Treasure every minute you have with them. You are an honorable man and a good son. God Bless.
nice article Lauren, look forward to seeing more.
Thanks!
…I feel kinda outta place here…
I’m still a (very) young adult, and all I’ve done is save up my money in preparation for times that I’ll need it.
(Although my Canadian blood forces me to go to Tim Hortons and buy some donuts on occasion)
Youngster
Welcome
No need to feel outta place here.
We are all here for a reason, a glimmer of hope, answers.
And the Tim Hortons thing….a few of us can relate to.
What’s on you mind?
Welcome Youngster, That is a good start! keep on reading and learning,.Keep on saving and buy wisely things you need, not wants…and knowing the difference is best learned early… stops a lot of problems as in Lauren’s article.
Just Saying
👍👍
(Although my Canadian blood forces me to go to Tim Hortons and buy some donuts on occasion)
At least you have an excuse being Canadian spending time at Hortons, I’m not Chinese so I have no excuse for going to Chinese buffets…
Youngster, I am proud of you for coming to this sight. It shows that you have insight into what’s going on in this world today. Keep coming here for inspiration. You will find leadership and instruction to help you weather whatever storm may come our way in the future. Store up the information and act on it as finances allow. We can never do it all at once but we can keep pecking at it. Each time we add something, whether big or small, will help us feel a little more secure. Money saved is important but don’t wait too long to diversify. Keep up the good work!!
If you have your savings, and the habits that allowed you to keep them, then you’re set to “adult” for the rest of your life in a way most people simply can’t. Keep it up. Glad you’re here!
Tim Horton donuts, been there done that 👍😉 Youngster have you ever listened to or read Dave Ramsey? If not, YouTube him. His ” Stop Throwing Your Money Away ” video is a good start. But hold on to your seatbelt! He no holds barred just like we sometimes need 😉
For 99% of people in JimBob’s position they would never even look at a Prepper Blog and would do what people normally do when their income goes up. That being their expenses grow with their income and in more then a few cases they go into more debt. 15 to 20-years down the road they have 100 K to 250 K of debt and are at a loss as to how it really even happened.
3-days ago I was talking to a customer and he commented that it cost him a fortune even when he sits in his condo and doesn’t go out. He had me in to re-wall paper the living room (old wall paper looked good to me) and he was having new carpet installed the next day. And again the old carpet looked very good. But his wife wanted a new look so they spend money like crazy…
Mindset of being frugal and to focus on prepping is just not there with 99% of the population.
For many people it takes a real slap in the face before they wake up, sad it is this way, but that is how it goes…
Having went through a personal-SHTF I learned several things.
You can get by spending less then you think.
Debt is evil and a thing to be avoided.
To spend less then you take in.
That you can still enjoy life doing things that don’t require you to throw massive amounts of money at it. I got into photography as a hobby (not that I really needed a new hobby…) and bought a used Minolta digital camera off E-Bay for $12.00. My brother had the same camera and was very happy with it. He found one on E-Bay and I got it. For less then $20.00 (I bought a few extra memory cards) I have a hobby that I enjoy and can easily spend endless hours doing.
Frugal is not a bad word but more a creative word to make your dollar go farther.
And most importantly the World at large doesn’t care about you and if you sink or swim it doesn’t make a difference to others. This mad me look at my life and lead to self-employment and that is what dug me out of my ecnomic hole.
I now make more then I ever did but still live a frugal life of no debt and living below my means. I now can afford things that in the past were way beyond my means unless I bought it with debt. I recently bought a new Ham radio for $850.00 and a $350.00 antenna to go with it. I paid cash. Even when I worked at The Nuke Plant making good money I could not spend over $1,000.00 for a toy as I was married and had LOTS of bills to pay every month, the cash just wasn’t there.
As a side note I’m not a person that loves to work lots of hours every week. I want no more then 4-days of work per week. I want to enjoy life not see how many hours I can slave away. I get by well enough economically and if I do need or want extra money I just learn a new skill and sell it to customers and wham, more income. If you work for someone and learn a new skill you hope (mostly in vane) your boss will bump your pay from your new skill that makes the company more money. But when your self-employed you learn a new skill it generates more money right away as you charge customers for it and they pay you. Years ago I bought a set of PEX plumbing tools for $150.00. I had no planned work to use them on. But I let customers know I had them and within a week I had them paid for. They continue to make me money as I get about 3 plumbing jobs a month. If I worked for a company I would not likely have made much extra money from them if any at all as most companies are strapped for cash and won’t reward you for learning new things.
Living frugal with no debt and being self employed is what made my life much better.
Wonderful article Lauren, thanks.
IN GOD WE TRUST
Thanks Lauren for the article. I’m still in the learning stages but I am learning. Trying very hard to keep paying down debts and not add to them. If everything holds together for another year I will hopefully be debt free. That is “if” the washer doesn’t break, the car keeps going, etc.
That’s where the jar comes in. Every spare bit of change (and in my case all $1 bills) goes in the jar. I have other “savings” for fives (car expenses) and tens (charity). Not much goes in them at this point because I have little income, but when I was working I could easily amass $1000 a year in those separate “savings accounts.” Then your washer is paid for before it breaks or the car repair is $100 on the credit card instead of $500. You adjust the strategies to fit your circumstances. If all you put in the jar is $10 per month (and seriously, how many sodas or cookies have you purchased because you had change in your pocket?) that’s $120 that you don’t have to borrow at Christmas.
One of the biggest lessons to learn is that a credit card is just another form of payment. It is no different than a debit card,cash,check or the change in the jar that Lauren speaks of. it sounds like you are getting a handle on your debt so congrats for that. Using a credit card is fine as long as you understand that the bill will be there in 30 days so you better have a plan to pay it off. I myself use credit cards for a large amount of my purchases and earn about 1000.00 a year in rebates and points without paying any card fees or interest but then I do have the self control to not go over my limit. As CD said having the cards and credit in an emergency can be very important but even then you need to have a plan to pay them off in x amount of time.
Lauren
Unfortunately, suggesting that people stop spending, save some money, or spend wisely, is not what most wish to hear. Successful people have gotten rich by enticing you to buy stuff.
Two trends have emerged; find something you can sell cheap (under $19.99) and promote the hell out of it – but because you are lucky, they throw in a second for only shipping and handling.
The other is to find a range of competing products, do an on-line comparison, and feed sales to one or the other for a commission. eg. “a place for mom” , hotel rooms, used cars, trade services (Angie’s List) …..
I guess there is another – become a politician, rake in as much as you can in office, and then do the tell all book, on a publicity tour .
Lauren;
Very nice article, well done, thank you for contributing.
JimBob and Julie are so very much typical in the Country it’s of epidemic proportion. It seems everyone is shocked and ignorant to the National Debt of ~$21-trillion, yet the true debt is more like $270-trillion, and nobody seems to care. Frightening.
There is no end to the zeros and ones that are hidden so well in computers and in debt, I watch some that would never think of handing over a $c-note yet will charge $300 for a dinner and drinks with a few friends on that hunk of plastic. Absolutely insane; as most in .gov and Banking believe “just print more money”.
You used a word I’m very much attracted to, “Lifestyle”, people having financial responsibility is a ‘Lifestyle’ of its own, NOT leaching off the .gov aka Taxpayers/Hard-working-people, NOT sucking the life blood out of ‘credit’ and never intending or being able, to pay it back.
I do agree with CD in Oklahoma (not a first, BTW hehehe) that having Good Credit in good standing is a must. Having $30K available in CC credit this day and age is not unreasonable….. BUT knowing how to manage money and Credit is a MUST!!!!! Yes Mildred, having a good credit rating is also a must, if one never uses credit, you will have no credit rating and will not have the resources if **‘IF’** needed. Yes there are times you need credit, that Truck WILL break down sooner or later. Additionally if you do need to make a large purchase, charge it, that PAY IT OFF in a week if you actually have the money.
The “Lifestyle” of smart money management, JimBob and Julie, like so many, learned to arrive at a crossroad in life. I sure hope anyone reading this article and if in debt will think long and hard as to what is being handed to upcoming generations.
PS: Been there, Done that. GREAT to be on the other side of “Credit”.
I have a credit score in the 700’s, and I use my card maybe once or twice a year, then pay it off immediately. Each time they offer to raise my credit limit I accept, even though I don’t use it, because credit is for emergencies and there’s no telling how large the emergency might be. My debt ratio allows this BECAUSE I never buy anything.
However, there are many people out there who do not have the self control (yet!) to deal with credit–they deal instead with the illusion of free money because that’s what our society teaches. Until they learn the skill of having credit without using it, probably better not to have it.
Lauren,
My daughter has a CC and has a very high credit score, well last month she had a couple emergencies and had to use here card for a hospital bill, well with some of the other things going on she paid half the balance and will pay the another half next month. She checked her credit score and freaked out because it was down two points haha. She takes great pride in having a high credit score and works really hard at keeping it that way. ( she is super good at managing her money).
My other daughter though has no CC and is very hesitant to get one, her boyfriend has a massive amount of cc and student loan debt so she is seeing how hard things are with a lot of debt. I have tried really hard to teach them good financial skills so they don’t make some of the same mistakes I made.
Ranchers Wife Please keep in your daughters mind that once you get married or even co-habituate in some states His Credit rating gets so-mingled with hers.
I have been startled by discussing things with my millennial friends how many found that fact about credit out until after they tied the knot. Three ladies were very hurt to realize that their “man” was well behind in child support payments that they DID not even know he had children with other women!
Stinks to be responsible with credit AND find out you have to fix “His” AND pay child support.
Love can be Blind, Credit is Not!
NH Michael,
I know I really worry about this situation she has great credit and he doesn’t but he is working pretty hard to get everything paid off. I have told DD to not help pay these debts she said she wasn’t. He is a good kid but I really do worry about it as you said love is blind.
Ranchers Wife you know if he successfully pays off his debts, gets his credit rating above 700 AND is kind to YOU (always said see how a man treats Momma and you know how he treats wife) he may be a Keeper.
Better a harsh test BEFORE Marriage 🙂
NH Michael,,
He is good to us, comes and helps DH if he needs it, always gives me a hug when he sees me. He is a good kid I just really worry about the financial side of everything. He went back to school ( lots of student loan debt) this past summer to finish getting certified for a fed. LEO wanting to work the parks so was out of work most of the summer but he did find odd jobs pretty much the whole time. ( he did try getting a full time but when he said he would only be there a few months never could get a real job) Did just get a job several hours from here so will spend the next 6 mo. gone so we will see how it goes. I figure if they survive this it might be ok Haha
Hi NRP
Does 2008 bring back memories? Well, subprime is back for autos and houses – what could go wrong? We the responsible ones are going to carry the debt load of the looters and irresponsible once again.
hermit us;
Had to chuckle, thinking NRP is the “responsible” one HAHAHAHA Even Blue had to laugh at that one. 🙂
Sub-Prime again…… unreal, people have NO idea (or care) what they are getting into. the World of instant gratification is at it’s peak.
Honestly, I still don’t understand how it does not all come crashing down
NRP
Well, if you have not tapped that 100k line of credit yet, I would consider you as responsible. 🙂
Many forget that we also pay the price for shoplifting, stolen ID, welfare fraud, illegal voting, corrupt politicians, public union demands, tenure in teaching institutions, …… we are like Atlas, carrying a heavier burden each year – so what would you suggest he does?
hermit us;
I believe there are many MANY here on this crazy BLOG that have and are doing exactly what is needed.
A simpler life, down-sizing, doing more with less, realizing that the ‘Shiny Trinket’ is not really that appealing.
YES!!! we need to enjoy life and live it to it’s fullest, but tis it not like going to Church? I seem to ask if one is closer to God in a $30million building, or sitting in a field next to a stream on a blanket under what God really made?
But live within your means and knowing there actually may be a tomorrow when that extra $1.oo is needed.
NRP
Sure, your comment reminds of the Obummer library being built in a deteriorating city of crime and bankruptcy. I too will take any neck of the woods over that urban decay.
HERMIT ,,,,,,,SHRUG
yup
Sounds reasonable!
H Us, And the business cycle is generally 10 yrs. The last real correction was ’08.
CR
I have heard so many say, “if the country economy goes to hell I’m not going to worry or repay my debts”. Not sure how this will play out but I prefer not to have to look over my shoulder to see if someone is going to collect the debt.
Hermit,
Better to just be debt free,
Hell or high water i should be able to pay truck
Folks who think they can walk away from debt are foolish. The Great Depression is full of stories of how folks lost their homes, farms and freedom over tiny amounts of debt that WAS going to be collected by the Banks Via the Sherriff.
When an economic crash occurs the Poor suffer and the Banks aside from some reorganization do just fine. Example the coal mine worth 1 million dollars in a crash does not go away when the owner defaults and some Bank or Rich man buys it on the steps of the Courthouse for 10,000 dollars. Crisis investing is the basis of many Wealthy families wealth.
I use the envelope method for a couple of things. I put it in just one envelope and on the front I have written what the different amounts are for. I pay car and house insurance once a year and a couple of other things semi annually it is much easier for me that way.
I know a couple of people that think I’m a tight wad. I just try to live within my means and unlike them have not had things repossess or claimed bankruptcy.
Timely and good article Lauren ,thank you. It is too bad that personal finance/ money management is not taught in the government school system today.
I speak from the experience of learning the hard way about personal money management . The wife and I flushed a lot of $$$ away very stupidly in days past, it is so easy to do .Thank God we woke up to the realities of things without going bankrupt and did a lifestyle change for the better.
Some things that helped us throw off the financial shackles of debt slavery .
Don’t spend more than you take home . Learn to distinguish between wants and needs . Make logical decisions instead of emotional ones . Write a financial gameplay for yourself . Save money for a rainy day because life will rain on you from time to time .
Not to start a fight but Personal finance and money management are not the governments job to teach. The job for that falls on the parents and yes I know that most of them have no idea of it either but imho a large part of the reason we are in the shape we are in is due to everyone wanting someone else to take the responsibility of educating our children on what WE should be teaching them ourselves.
Or just wanting someone else to take responsibility. If the .gov is going to do it, we don’t have to, right? Everything from self defense to education. We’re living in a socialist country, it just hasn’t acquired the label yet.
Poorman I strong believe that almost 90% of the problems of our once great country is from Parents not doing their jobs. The vast majority of my peers have a weak grasp on Personal Finance and they are near retirement with no real plan on how to pay for retirement. They are upset that Social Security will not pay for it.
At least with the Millennial’s I chat with they are willing to learn a little about basic skills like cooking, shopping and some advice about finance. Weird that folks will share intimate details on Face Book and jump into a sexual relationship but Money Talk is Taboo.
NH
As a child my family did this weird thing called sitting down to dinner together every night. Strangely enough at these dinners my parents taught us things like respect,morals,money management and how we should act and treat other people. I did this same strange thing with my children. Go figure they came out well and do the same with their kids.
Poorman your “weird” thing is what most of our troubled, sexually confused kids did NOT get growing up. You did a good job 🙂
Sad part is that given “Normal” is the mean average of those around you makes your good children-adults AB-Normal in current social mores. And thus with out compromising what is good and true have to socially mask it to fit in and not be a target of every troubled soul around them.
Something in the Bible about be as wise as serpents as not to be sheep to the slaughter. Yes a scriptural mishmash but worthwhile?
At least JimBob and his wife learned, there are so many out there that never learn. My Sister is one of them her husband makes really really good money but they are always broke, of course having to have name brand everything, going to woop-di-do land, among lots of other places. She has had to call my dad and ask for money for medicine, but then the next day they are on FB eating out. Drives me nuts especially when she is whining about not having enough money for this or that.
And food storage haha, she sent me a picture when they were under the last hurricane warning all proud of what she had, one case of water a few canned goods and a few large cans of dehydrated food. of course I didn’t ask her how they were going to rehydrate the dried food with only one case of water.I keep hoping someday she will figure it out but I am pretty doubtful that it will ever happen (and she wasn’t raised that way)
Great article and most timely for us!
Our dishwasher finally died and it’s not worth repairing. DH said to get another one once we check out the prices. I said nope. DH has a bad habit of not looking forward to see what we’ve already planned on getting. Like paying the remainder of the cost of our new pup, getting her spayed, shots etc. And of course, big gov wants to have me pay for license plate stickers yet again. Had to remind him that we don’t want to incur debt. We save up for what we want, pay by CC and then pay it off.
Since we have a smallish kitchen with limited storage, I took advantage of the dead dishwasher and turned it into a mini pantry. Why waste valuable kitchen space when it can be put to good use?
When life gives you lemons, think outside the box.
kk
I use ours to store the tubs for washing & rinsing the dishes. Personal can not see washing the dishes–to wash the dishes in a machine. Oh, an the family members leave the water running, reason I bring paper plates when the family gets together.
And make lemonade!
Excellent article Lauren. It is a good reminder to all of us about the choices we make. Some of us learn from our mistakes the first time and some of us take a bit longer. Sadly some never catch on. And there are many that have issues beyond their control that take over their lives for a period. It is how we respond, with God’s grace, that determines the outcome. Your article got us all thinking….thanks!
BTW, it is snowing again!
We have a calendar that we write the months bills on and which ones get paid with each payday. We pay bills before we blow any money. We also have a small savings account for any unplanned expenses. We like to use lay-away when we can instead of credit. The only debt we have is the golf cart payment. We avoid convenience stores. And we are always on the lookout for a bargain.
Jimbob is likely in the next tax bracket after receiving the raise and has less annually in his pocket than before the raise
Fred, nothing like a truth bomb!
Always remember that the people telling you that it’s OK to be in debt and to pay it off with inflated dollars are either government toads or banksters, both of whom can create “money” with the stroke of a pen or keyboard. You, mundane, cannot. The banks go insolvent, they get bailed out by Uncle Sap (“too big to fail”). You, a mere mundane, can neither create money or expect a bailout when you get tapped out. ALWAYS REMEMBER THIS.
Years ago I mentioned to a friend that I owned my house free and clear. He thought I had just advocated infanticide or something. “Why don’t you borrow against the house and use the money for investments in the stock market?” and similar fantasies. I countered with, “We both work in a very volatile business and we could both be out of work tomorrow. I don’t want to be out of work and have a creditor dunning me for a $1500/month mortgage payment.” He still thought I was nuts.
Well, I kept my house free and clear, saved money and, sure enough, one day the layoff notices came out and both of us were on it. I just smiled and looked forward to my vacation while my friend spazzed out. I found a new job about three months later and never missed a meal all the time I was unemployed. My friend, on the other hand, had to file Chapter 13 bankruptcy a few days before I started my new job.
Simple rule: if you own someone, they own you. If you owe nobody, then nobody owns you. It’s amazing how many people can’t seem to learn this.
I have a BIL like that. Lots of investments, but they don’t even own their primary residence. I seem to remember something about the depression, and people losing their homes because they mortgaged them to “play the market.” But that would never happen today!
Right.
Sorry to say Lauren I personally know 2 near peers of mine that have mortgaged the “equity” of there homes to play the market ON MARGIN. For those who may be unaware Margin is when you BORROW Shares from your Broker and put down only 20% of the price for an agreed amount of time.
So your hope (I cannot say Plan here) is that your stock price increases in that time period and you make money when you finish paying the other 80% of the agreed price. Margin is also called Leverage. So you can get into Profit or Loss 5 times as fast this way. Both of them bought Face Book and are in Pain right now praying to break even next month.
Oh BTW you WILL pay the full price for those stocks when the time is up.
I don’t have a CC, cancelled it a few years ago. I was one of the ‘responsible’ people who paid the balance off each month, and got points! I learned that the points weren’t really worth it (restrictions) and that being ‘responsible’ still meant a bill each month. Now I use cash and, occasionally, debit card. Once something is paid for it is paid for, no card statement coming later. I also think Ramsey is correct in that cash keeps one aware of their spending. Lastly, cancelling the CC means one less account to be hacked. Had an experience with debit card fraud a few years ago, credit union really shown through, now I pay cash when I can, hard to hack cash.
DLS and friends please remember if you use a Debit Card and someone steals it or the numbers (where did the Wait staff go with my card?) they can CLEAN you out and you have little recourse.
BTW at Restaurants I only pay Cash as too many friends have tales of mysterious charges in the Bahamas’ after restaurant visits. FYI
With a Credit Card you can call the CC Company and limit your damage for false charges to I think 50.00. Also a lot of Credit Cards have extra free warranty benefits for things purchased with that card. I had a power tool problem that the company would not resolve and the CC company fixed it.
Credit Karma has done me well for years for credit monitoring for free and they suggest credit cards you are eligible for that are often quite good. No I have not added extra cards but a lot of no fee ne restrictions cards out there that do not advertise so aggressively.
Wow, I read every comment on here. I guess I’m gonna be the odd man out. Debt is to be used as a tool to garner wealth. Can ANYONE here pay $350,00o in cash for a piece of property? $125,000 for a used 150hp tractor? No, you can’t. This is where credit comes into play. Commercial Agriculture, my business and my life, revolves around a good line of credit. I know a lot of you here are Not gonna agree with me, but with over a 1000 acres to manage each year, I use both short and long term credit to advance my position. These a structured loans, some with collateral and some not. Our homes are free and clear, but some of this real estate I’m still paying on. The way the tax laws are written, paying off early is a HUGE liability, 29% tax penalty. 17.5% social security tax and 12% Income tax on principle payments. The interest is 100% deductible.
My credit rating is very high, so I can get 0% financing from places like John Deere Credit, New Holland, and reduced rates from the Farm Credit Services. I have used CREDIT, wisely my whole life, and I am able to negotiate rates down closer to my favor.
Paying and using cash, along these amounts, will get you an IRS Audit, faster than you can blink, been there, done that.
Small scale, well, debt can be a hindrance. Why? Because most don’t know how to spend money. My Father once told me, “Anyone can spend money, but, not everyone knows HOW to spend money.” A truer statement never spoken .!
Agree or not, there’s 2 sides to every coin.
smg
You are not the odd man out. Business financing is using all the tools available in a responsible way. Home financing is also necessary for most – only within one’s means – no subprime loans.
What most of the discussion is about – the personal credit bubble occurring today. Using credit for frivolous purchases is too easy for many people because the availability is almost endless and temptation is debt’s evil sister.
But I do know some who have scaled back their farm sizes to reduce the burden of the debt cycle – some down to 40 acres and sit debt free. It seems that when the expenses are reduced, the need for all that income are also reduced – called self-sufficiency.
Lauren
I really enjoyed your article, and passed it on to those who would enjoy the content.
Hopefully those who require a heads up for their stupidity in believing it is free money to use,, that is until the bills come due.
I remember, back in the dark ages, taking a “Life” class in elementary school. One whole week of using play money to buy stuff in a fake store and using keeping track of how much money I had left. I think that was the extent of the “official” finance instruction when I was in public school.
Some people think they’re still in that class. “How can I be out of money? I still have checks left!”
I heard another good one today – not a new financial strategy, but even more stupid (in my opinion) than when it was first proposed “we can spend our way to prosperity”. Go for it sheeple and we will watch the outcome.
obamanomics 101
You didnt make that!
I think that was one of the things that solidified my decision to stop producing,
Let them eat sand
Want another? Unemployment at 4% haha Sure when you don’t count them that do not want to work.
hermit us;
I had to laugh a little, I’m wondering if Nailbender is counted as one of those “unemployed”? 🙂 🙂
They no longer count those who want to work but are not, those who are working only part time but want to work full time, those who have been unemployed for more than 2 years, those who fall off the unemployment rolls, or some of the self employed. Retirees over 65 but still working are counted in the employment numbers but not in the workforce numbers, artificially driving the unemployment numbers down.
Unemployment (determined by a complicated calculation that changes on a quarterly basis), inflation (numbers created by a “basket” of goods, and if the price of one goes up they can arbitrarily replace it with another), and the national debt. Transparency, right?
NRP
Im pretty sure they arent counting me for anything other than being deplorable,,,
“You didnt build that”
Hermit,
Yea, i love that one, locally they trumpet their low unemployment,
1. Almost all of the visitor industry only hires part time
2. We have the highest welfare recipient per capita count in the US
3. “You didnt build that
And to add insult to injury recently they started counting part time workers AND if you, like many of my friends have a couple of part time jobs are counted as # of Employed per JOB so my neighbor who has 3 part time jobs is THREE Employed People in their calculations.
Quotes for the day
“Never Let a Crisis go to waste” Current Chicago Mayor name escapes me.
“When it is important they always LIE”
And our favorite “I’m from the Government, I am here to help”
NHM
I know more than a few people who work 3-4 part time jobs
Thats all there is
Its Putin’s fault 🙂
Food stamp recipients down a half million in a month – so now only about 45 million – but I’m sure they are all deserving haha
Here is a billion for all those shovel ready jobs – none of it went there. We could go on for ever with the lies.
Whats another billion amongst friends
NB, the gimmedats are also in politics…
I have to wonder if JimBob’s raise actually put him into a higher “Tax Bracket” hence actually putting his ‘take-home’ pay is not 15% lower and contributing more to the .gov?
All awhile giving the false hope of doing “better” yet spend that $100 not realizing he is getting less till the Tax Collector notifies him he is not in collection proceedings and the .gov is seizing his assets and sending him and family to the ‘poor-house’?
Then I guess it’s a good thing he decided to cut hundreds of dollars worth of “necessary” expenses. The kids activities were probably easily $50 per month each.
NRP
The “poor house” is now a tent on the avenue. However, some day we may again see debtor’s prisons. – chosen by some for 3 squares a day, a cot, and a gang shower.
Hey NRP
You might want to read the fine print on the new tax code – I think you can claim Blue as a dependent now 🙂 I’m sure Blue identifies as a person – thats all that is needed now.
I read that New York city now allows trans men into women’s prisons – because they identify as such – can you see how this will work out and how many more trans men will want into the system.
I sincerely hope that’s not true. The prison systems already have serious problems with sexual assault, without the risk of pregnancy. Add pregnancy into the equation and they’ll most likely face serious legal consequences.
Lauren
You mean a deliberate pregnancy for that million dollar settlement – no one would do that – sure
No one would ever do such a thing. I have absolute faith in humanity. 😉 Or in the humanity…of the dregs…um…
Great,
Ill just identify as a dog, dogs dont file
Who is Dog Galt!
I guess you’ve been call worse. :):) Interesting argument – who owns you, the tick who lives at your expense or the government who lives at your expense?
hermit us;
Probably not as a ‘dependent’ but can write him off as a medical expense, therapy expense???
NRP
Whose therapy????? I’m not saying you need therapy, but how is that dog food that makes it’s own gravy haha
hermit us;
Blue is for my therapy, so actually a medical expense… no?
You know, like Seeing Eye Dogs, and Rescue Dogs… Well Blue is my “get off my fat azz and do something Dog”.
So I feel I should be able to write his entire expense off my Taxes, correct?
That is a much more sane reason that 50% of the people on Medicaid. I think there are more back ailments than people out there.
NRP
I read that Congress is debating whether you can eat your dog or not. Drudge.
hermit us;
You have GOT to be kidding me???
They will put 90% of Asian Restaurants out of business.
JUST KIDDING!!!!!
Now cats of the other hand………
Not nice to say that about fito.
NRP, Get your Dr to write a statement you need a “therapy” animal… dog…Just has to say you need a therapy dog for some medical reason… almost anyone can get one now.. can be anything from a parakeet to Great Dane…,
and a peacock – but the airline would not let it into the passenger compartment of the plane. Must be racist. Some people go overboard.