Letters to the Editor
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Your Money or Your Life
While I would never spend a nickel on sushi (mercury contamination - HELLO!), I was raised with the philosophy that money is never wasted on travel or education. So I will spend, and even go into debt, for those things. Right now, I'm studying subjects that have no relation to my current career, and not geared toward a new career but are simply for the love of learning. It's my money, and I value it, so I'll do it.
If lattes or meals out or granite countertops or orthadontia are important to you, who am I to judge. But, I firmly believe in understanding the true cost of something. "Your Money or Your Life" is life changing in that regard. I recommend it highly for the debt ridden and the debt free alike. One can always improve one's financial situation, so those of us who are smug about our own lack of unmanageable debt can find something useful in YMOYL.
In my experience people tell their story in one of two ways. If it's a sad story we say, "Here's what happened to me....." as though none of it was a consequence of our own choices. Conversely, when it's a success story, it goes: "Here's what I did, what I do..." as though all of our good fortune was due to our own intelligence and self discipline. The truth is always combination of factors. YMOYL teaches you just how to do the most with the factors that you can control. It's empowering to do the math, and see what you can accomplish, and exactly what something costs you in money, and in time.
Two of my friends stopped at a deli for lunch while on a trip. Mike, renowned among our circle for his cheapness, ordered a baloney sandwich, since it was, at $2.10, the cheapest sandwich on the menu. John, eager to get Mike's dander up, ordered a hard roll for $0.25 and 1/4 lb of baloney $1.25. John forked over $1.50 then went out to the car and made his own sandwich. I giggle everytime I think about this happening. Not that I'd ever eat baloney, it's in the sushi category IMO, but I'm tickled about John's willingness to save $0.60 simply because he could. I'd have eaten just the roll.
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33-Year-Old Calls Borrowing from Dad "Being an Adult"
It's almost an Onion headline.
I remember reading articles 10 years ago about college grads who wanted it all and still considered Mom and Dad to be a fair-game resource. Years later, those kids are writing them--about themselves.
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medical problems
Until my second year of grad school I had exactly $0 in credit card debt. Then I needed emergency dental surgery which I was told would cost approx $4500 (it wound up being about $4000 because the dental surgeon waived some of the fees). With no dental insurance and a monthly paycheck of $1050 out of which I had to pay shared rent, school fees and crappy basic medical insurance premiums, I did not have much choice but to put it on my card at 23% interest(thank God my tuition was waived). One fact though that I think was left unsaid in this article was that once in debt it's saps your will power a great deal. When I would think about the debt I already had , it was easy to say I have $4000 , what's another $25 for those CDs I want. And it adds up. When I graduated four years later, I had approx $15,000 in debt. About $10,000 of that was because of the original debt but the rest was all me. I've now got this down to under $2000 after serious scrimping for 3 years. I'm not sure what the point of all this is, maybe it's just that sometimes crap happens and it snowballs. It doesn't mean that someone is spoiled or a princess(or in my case a prince)it just means that someone made some bad judgement calls or got screwed. I wound up paying $10,000 for essential surgery that a wealthier person would have paid $4000 for. I took responsibility for my mistakes and I think that the fact that the writer has as well is commendable. If she was fortunate enough to have wealthy parents to help her than thats fine. If my parents could have afforded it , I would have borrowed the money from them without a moments hesitation. Better to pay them back than pay 25 cents on the dollar to some random company.
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Some of these "success" stories sound a little fishy to me
"I owed $75,000 in debt and only made $14k a year but through hard work and being responsible I was able to pay it off it 2 years and so can you if you just grow up!"
Paraphrasing, but you get the drift. There have been quite a few posts with that tone.
Sorry, but I don't buy it.
The cold hard truth is that it is very, very easy to reach the tipping point wherein you owe more in minimum payments per month than you make!
Credit counseling? Hit and miss and not the "answer" some people are saying. They ASK the credit card companies to lower their interest rates and ASK to suspend their fees with limited success. I tried it and I can tell ya that at least one creditor flat out said no. Eventually after they got about six more months of interest out of the account (and late fees) they closed it. That tacked on an additional $1,000.
It just sounds a little odd that people are claiming to be able to pay off tens of thousands of dollars in debt -- yet they earn no extra money, still owe the exact same amount on their mortgage, etc.
Unless they are leaving out key details: such as how much they earn. $75,000 may sound like a lot, but if the commentor earns a salary of $150k a year -- then that explains how they were able to "suddenly" make 3x the minimum payment every month and pay it off so quickly.
A lot of people are victims of simple mathematics -- there is mathematically no way to realitsically pay down certain debts AND maintain a sensible household budget (ie, the minimum payments are more than you can afford after the mortgage, car insurance, health insurance, electric bill, etc)
Would we seriously argue it's better to spend every last penny of your paycheck every single month for 5 years to pay down the debt -- meaning no savings, no 401(k), no college tuition for the kids, no emergency savings, no money left in case of a car breakdown or medical problem? You MIGHT be able to get away with that kind of spending for a month or two -- but 5 years or more?
It's math. If you owe more than you earn than something has to give. We need to "grow up" as a culture and recognize that, yeah, Visa is going to have to NOT GET PAID in order for a family to be financial stable.
People who are strongly advocating "doing the right thing" by going broke making minimum payments are actually giving crazy counter-productive advice. Handing over every last penny of your paycheck to Visa simply because they demand it as the "acceptable minimum" is a recipe for financial suicide.