Letters to the Editor
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Money as Debt video
stchrisb, good idea! I watched this movie last year and my jaw dropped. It's available on Google Video - http://video.google.com/videoplay?docid=-9050474362583451279
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Credit Card companies are the anti-Christ
I am a middle-aged, white, college-educated, married w/2 teens full-time-working female. Two years ago I amassed fifty thousand dollars in credit card debt. Doing what? Jetting off to Europe? Shopping at Tiffany? Buying twenty pairs of Gucci loafers? No. By cashing those damnable "free" checks for $2,000, $3,000, $5,000 that the f*&^ing credit card companies enclosed with every monthly bill to pay for my kids' camps and lessons. Two years later I am paying off a $50K home equity loan and have cut up the plastic. The kids do not go to camp. They do not take music lessons. Our two cars combined have 250,000 miles on them. It's a good thing my husband signed for the loan, because no bank would lend to me to get me out of the 30% interest that the credit sharks were charging me.
Sarah is lucky that she escaped with a fifth of the damage that happened to me.
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I hear ya babe!
Yes,
I too am paying off my debt. In two more years I can quit paying off my debt and LIVE again!!!!!!!
My debt was from pay cuts and hospital bills and no I didn't get help from parents at all either. Just good advice and the willpower to do it.
Yes, I'm single but debt affects all of us whether you're married or not. It's all in how you take charge of your destiny and quit seeing money as an enemy but a useful friend.
Ease up on the girl! Debt is no fun no matter what your age or amount.
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Mistakes and back @ Thadeus Crumb
What's a mistake? A third grader incorrectly adding a column of figures -- that's a mistake. Going out to eat and for cocktails week after week when you don't have any money coming in...that's a mistake? Really? You think so?
T. Crumb, the author IS the Salon target audience, at least in part. She probably took some of the NY-based Broadsheet broads out for lunch, looking for advice on the freelance writing life. And paid by credit card. :)
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But Sarah Hepola...
... by her byline, is a Salon editor.
You're right, of course, about the overall Broadsheetification of much of the site. I hope it makes money for them.
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More horrible advice
There were some important points brought up I'd like to address. NOTHING in the article, or my opinion about it, was related to health care, which is a big issue by itself. We have an expensive failure in the US that costs us more than any other nation on earth and leaves millions without care or in debt. NONE of my comments were directed at the unfortunate individuals who find themselves destroyed by medical bills, inadequate insurance or debt from live-saving procedures -- assuming the worst, they are the very people for whom the bankruptcy laws exist and they have every right to use them. Meanwhile, every one of us has the responsiblity to try and change this brutal system to a modern and fair one.
A better article might have been written by someone ruined by medical bills OR a poor family in Detroit, crushed by the changing economy. But it wasn't -- Salon choose instead to have the article authored by a spoiled yuppie princess, with a small manageable debt, a freelance lightweight who wanted to live a BMW life style on a Yugo budget, and who (when she failed) turned to Daddy to bail her out.
There certainly are people who are tragic and unavoidable financial catastrophe. But if you look beyond these extreme cases, there are many millions of people either living beyond their means out of greed and immaturity OR even worse, some examples who posted on this thread, who are actually BRAGGING about how they scammed the system to get free honeymoons and are the same ones who snottily announce "Those nasty VISA people -- huh, I will just show them and not pay my bills!"
Well, who do you think has to actually pay up for your selfishness? it's the rest of us -- the ones who actually read the small print before we got that Visa and who followed the rules about repaying our debts. The idea that in life you can simply say "so I am 8 days late -- so what?" is infantile -- do you say this to the IRS? to your boss? the justice system? your landlord? If you are 8 days late, you have failed to make your obligations, and therefore, YES THERE IS A PENALTY. Because the rest of the world is following the rules. Visa and the IRS are not your mommy and daddy, always allowing you extra time and "do overs" and if you think thats how the world works, you are in for a sorrowful come-uppance some day soon.
As far as the IRS taxing debts you walk away from after 7 years: I am not a CPA or attorney. I heard this first on Suze Orman (a reliable source I believe) and then in my local paper, in a column written by a tax attorney. This refers to a situation where a consumer simply doesn't pay a bill, and the credit card company gives up over time trying to collect it. It does NOT refer to situations where you settle with the credit card company, in writing, for a fixed sum of money. Many people don't know about this, and think they have gotten away with their free vacations and clothes and toys, only to get audited several years later and end up owing a lot in back taxes and penalties.
Another question involved 401Ks, and some posters suggested it was "smart" to drain your 401K or IRA to pay off debt, repair a car, etc. NO IT IS NOT, it is stupid and it will cost you big time. That money was put in tax-deferred (unless it is a Roth IRA, and has been invested for over five years), and so you will owe taxes on it at your current income level PLUS the IRS levies a ten percent penalty. So if you take out $20,000 from a 401K, the taxes and penalties can easily run $7,000-$10,000 -- an awfully big waste of your investment -- PLUS all the tax free interest you will lose for many decades into the future. There is almost nothing so dire that you should destroy your future security like this!
Short of tragic medical situations, if you have made mistakes (and yes, we've all made them), the right thing to do is to tighten your belt, eliminate your splurges and shopping habits, and lead a simple life within a budget -- and a few notches below whatever you think "your lifestyle entitles you to". Most people have no budget, and no idea what they are spending, and will say to me "as long as I can meet the monthly minimums on the credit cards, I don't care". Well, that's stupid -- because you are just one heartbeat away from job loss or poor health or an accident, or any of life's surprises and tragedies.
If you do add up all your entitlement luxuries, I promise you will be shocked. $120 a month for cable TV, $150 for a cell phone (with photo services and text messaging etc., plus overages), $80+ every time a couple goes out for a modest dinner in a restaurant, $100 a month just for fast food lunches, $80 a month for a daily latte at a coffee shop, $450 monthly payment on a new car (not even a very fancy one), $75 for a haircut every six weeks and so on. Recently, we had a letters thread here on Salon about slovenly people, and most posters said "oh just have a cleaning service come out every week" and not even nodding at the idea of adding maybe $250 a month for a simple service that most normal people can do for themselves!
This is the way we dig ourselves into a hole we can't get out of -- one teaspoonful at a time. You can get from there to here -- to an honest, solvent lifestyle that doesn't involve ripping off credit card companies or taking handouts from your elderly parents.
Just grow up and DO IT.