We've been doing it all wrong!

[Larry Ashcraft]

So, Sandy and I are 56 years old, and we are sitting here feeling broke.  House needs repairs, tractor needs a battery, bills need paid, projects need finished.  Business hasn't been good at all this year, and the last one that gets paid is me, of course.

Then we look around at people we know.  They have newer cars, 4-wheelers, give big Christmas gifts to their kids.  Us, our cars are older, but well-maintained, and paid off.  I have a decent gun collection and four John Deeres, all paid for with cash.  We have a decent retirement plan set up, we won't be rich, but we will eat.

But we are broke.

The answer? Our friends use credit cards, we don't.  We don't owe a dime, except for the house, and it will be paid off about 14 years early.

So, we are doing it all wrong.  I want a new truck, four wheeler.  Sandy wants some diamonds and some fancy clothes.

We are going on a shopping spree with credit cards.  I know it's OK, because everybody else does it.  Heck, it's the American Way.

See Y'all later, I'm gonna buy a whole buncha stuff.

[grampster]

Sounds of screeching brakes and crumpling metal.

I've worked for 37 years to get where you are, so put down the bong, slap yourself, and go out and shoot some chupabacra, chapucabra, barcarchubra, oh hell, possum.

[Guest]

I remember when I was growing up. My parents sent me to a private middle school because the public schools around here really suck. I was always upset that the other kids' families had way better stuff than we did. They had ATVs, swimming pools, a nice new car every two years, vacations in Hawaii etc. Fast foreward to college and suddenly all of my friends find out that their folks dont have one thin dime to help them go to school, more is the point the kids will be supporting their parents in their old age. As it turns out all those "rich kids" families were living an image that involved prodigious quantities of debt, it turns out that my parents made more than them, they just werent stupid about how they spent thier money.

Today, those parents are looking at mooching off the meager wages of their children, and mine are trying to decide if they want to go on a tour of Russia, Norway or both for this years vacation or if they should just take another cruise on their sailboat. Yeah, im a tad irritated that my parents waited untill they were retired to start spending money on impracticle things, but it is the smart thing to do.

[Standing Wolf]

I use credit cards now and then to sustain my good credit in case I ever need to use lots of credit in a hurry. You don't actually have a credit rating any more unless you own a house and/or use cards. Weird.

[Fly320s]

Larry,

Good idea.  Remember, once you max out your credit cards, to declare bankruptcy so you don't have to pay all of your bills.  Don't worry, someone will pay for you.

Almost forgot... get another mortgage or two.  Spend that cash on good investments, such as plasma TVs and boats.

[TarpleyG]

Remember, once you max out your credit cards, to declare bankruptcy so you don't have to pay all of your bills.  Don't worry, someone will pay for you.

Not anymore.  Now you have to repay the debt even if you declare bankruptcy...you just get time to do it.

Greg

[roo_ster]

Larry:

I know how you feel.  My family's only debt is:
1. Mortgage on 1300sqft house
2. 16 more months on a 3 year car note* (Honda Element)

I make more than the mean or median household, yet we regularly must cut off all spending a few days before payday.  Putting things on credit cards is generally not an option**.


* Replaced 9 year old small coupe when we realized we were having a kid.  Our other car is 8 years old...with noplans to replace it, despite its 130K miles on the odo.  This is our last new car.  Used for us from now on.

** Home improvements/remodeling generally goes on credit card to:
1. More easily track HI spending to our budget estimates
2. Not cause us to eat beans & franks for a month if we implement a $1000 HI project
3. Generally paid off with savings at project completion

[El Tejon]

Mortgage is enemy; mortgage must be destroyed!

I say that every morning while shaving.  Sort of like "Carthage must be destroyed!":D

Larry, from one small bidness owner to another, I feel your pain.  I take solace in the fact that I am out doing eeevil on my own and have no one to report to (other than the IRS and Indiana Department of Revenue).  *evil laughter*

[Paddy]

DON'T DO IT!!  The stuff is not worth it, you won't be happy and you'll have more debt accruing a high rate of interest.

[Art Eatman]

Credit is a tool, just like a screwdriver, a tractor or a gun.  Used with common sense, it can lead to profits.  Otherwise, forget it.  I've never used credit to buy frou-frou stuff.

I have no gripes.  Had a lot of fun, had a lot of toys.  I just didn't race on the grocery money.  Had my toys one-at-a-time, and mostly it was used stuff that I fixed up and made better than new.  My ego trip was to buy a used race car off a guy, and then go out and beat him in his new car.  (Not nice. )

I was talking to a real estate fella one time, and he told me to "get a lot while you're young".  I misunderstood him and bought real estate...

, Art

[kudu]

You sound very depressed Larry, it's nice to go on a small spree now and then, but don't let it get too out of hand.  And when you bring back that new 870 28 ga, let us know how it shoots.  

[P95Carry]

Larry - odd ain't it - we can get to older age - with plenty of ''stuff'' and yet feel broke as regards current liquidity.

I can sympathize and know how it feels.  We are ''rich'' in so many ways and yet - those damn bills cannot always be met when needed.  CC's are Ok - if controlled and useage planned - but oh my - way to easy to abuse.  My first CC was actually IIRC the firsy major CC in UK - I earned good but still abused the plastic - it was sooo easy!!  I eventually sold a small insurance policy off at a loss, paid off the CC and cut the sucker in two.

Now I keep one and an Amex against emergencies but endevor to not use them otherwise.

Thing that really concerns me a lot is the folks who bend plastic to the max - to buy trivia and over-priced crap to assuage their kid's demands for Christmas presents and stuff - only to spend the coming year in penury for their excessive spending habits.

Soldier on Larry - crises come and go and with determination and patience, things can perk up - and anyways, if you do play a bit with CC's, just keep it moderate!!

[Guest]

Remember that while one cannot pay one credit card with another credit card that cash advances can be spent however you want!

[Brian Williams]

My wife and I recently remortgaged our house and we got a lower credit rating because we had no balance on our credit cards.  The rating was still high because we owed nothing but the original mortgage and still owned 3 cars.
I use CCs for emergencies only.

[Zundfolge]

The wife and I are in pretty much the same boat. No debt to speak of (other than mortgage on house) and only use credit cards for mail order and to purchase large ticket items (that we then pay off from savings when the bill comes).


Revolving debt is slavery ... stay away from it.

Borrowing money and paying interest for disposable items or items that depreciate in value is a real bad investment (yes, even getting a loan to buy a car is a bad idea).



[tinfoil hat]I honestly believe that the American people are being set up ... easy credit, easy debt and you can get most people so far in debt that they truly become slaves ... then you foreclose.

Someday there is going to be a giant foreclosure on the United States and those of us who aren't up to our eyeballs in consumer debt are going to be the only ones to survive.[/tinfoil hat]

[Larry Ashcraft]

I started this thread partly with tongue in cheek.  Sandy and I were discussing a couple we know who are about to go through a nasty divorce.  They have been married about as long as we have, and the husband has become increasingly abusive, to the point that the wife is leaving him.

I told Sandy she needs to get a lawyer to make sure he doesn't end up with all their possessions.  Sandy reminded me that although they may "have" a lot of things, they don't "own" much.  They will most likely have to declare bankruptcy.  That's one heck of a legacy after 35+ years of marriage.

Yes, Chris, we got in trouble many years ago with CC's, we paid them off and got rid of them.  We have one for emergencies or for renting cars or getting plane tickets.  We also have a Sears card so we can save on their sales.

Business is bad, but it could be worse.  I own my own building, so I can soldier along even in slow times.  I just feel bad when I can't bring a paycheck home because then Sandy has to scramble to get the bills paid.  Sandy makes good money, but she pours most of her check into the house payment, because we want the house paid off before we retire.

[jsalcedo]

You can go max a buttload of credit cards and just not pay.

After 7 years it's off your credit and you can do it all over again just not with the same people

There is absolutely nothing they can do to you because it unsecured debt.



Of course it's not moral or ethical.

I did the credit card thing in my early 20's got into massive debt  then fixed it and have been living
cash ever since.

Best way to be.

[Zundfolge]

jsalcedo, they just changed the bankruptcy laws, so no you can't do that.


But yeah, Larry, I know how you feel sometimes ... I look at lots of people I know who make what I do or less and they seem to have more than me ... better car, nice new home electronics, they go out to eat just whenever, etc.

However when the subject of debt and finances comes up they are all amazed that we have no debt.


I too "got in trouble many years ago with CC's," ... the weight of a heavy credit card debt ends up being worse than not having a bunch of shiny new toys

[Monkeyleg]

Larry, I know your were posting tongue-in-cheek.

Business is bad for me as well, and my wife and I are just scraping along. Fortunately we have a small, inexpensive home (and a small mortgage payment), and only one small car payment. (The payment's small, not the car ).That's pretty much it.

My retirement savings got wiped out five years ago, so when I get business going well again, there still won't be money for all the extras. Every extra dollar will go into savings.

The TV I watch is a 14", and that's fine with me. Our main TV in the living room was a 20 year-old Quasar. We recently got a large-screen TV for free (my wife helped an out-of-town friend liquidate her late father's estate, and the TV was part of it). Otherwise, we'd still be using the Quasar.

I know many people who were living large, and then lost their jobs. A $1500 to $2500 mortgage payment suddenly becomes a real albatross.

[jsalcedo]

"jsalcedo, they just changed the bankruptcy laws, so no you can't do that."

I'm not talking about bankruptcy.

You just don't pay

[jsalcedo]

Unsecured revolving debt.

Credit cards, Dept store cards etc... have high interest rates because the debt is unsecured.  They are taking a risk by giving you credit to buy items with just your name and supposed credit worthiness.

You can get two dozen credit cards max them out with vacations, jewelry, cash advances whatever.

Then you just don't pay them.

They will try to call and hassle, threaten.. just change your phone number and make it unlisted.

They can't call you at work (against the law). They could possibly try to sue to collect damages but that very rarely happens because each invididual debt is comparatively small.

Eventually they will report you to a credit agency and you will get some strongly worded letters until 7 years are up then the bad credit is pulled from your report.

I'm sure people are going to call BS on me but it is all true I have first hand knowledge of at least 6 people who have done this inadvertantly because they had no money to pay off their revolving debt.

Personally I did it the hard way..took me 6 years to get out from under it.

[Moondoggie]

I'm self-employed also with no cc debt and no mortage.

I took the plunge on a new pickup a year ago because it was zero down and zero interest for 48 months.

We had cc debt in our younger days, and it sure feels great to have it all paid off.

[Larry Ashcraft]

You know, I wish we'd known that when my mom was struggling under thousands in credit card debt right after my dad died. She paid every cent back, which I respect and admire.

My grandmother died in 2, at the age of 94.  The one thing she was the most proud of, right before she left, was the fact that she had paid her own way, all the way, with no help from medicaid, medicare, or any other gov. agency.  And she left a little something for her children.

Blackburn, I'm proud of your mom.

[caseydog]

One of the easier ways to deal with credit card debt and still be able to look in the mirror and smile before you're completely buried : Take your CC bills to a small office lawyer , ask him to write requests for payoff to each company/bank. Typically when a lawyer requests these for you the payoffs will be between 1/2 and 2/3 of your full balance stated on your bill (more or less depending on the age of the debt and accrued interest).
Write the payoff amount on each bill and take the bills and the letters returned to the lawyer to your local bank , tell them you need a debt consolidation loan , show them the bills and tell them they can pay them directly. Of course the state of your credit history will determine how much you can get unsecured at the bank.

Typically if you have been paying the CC bills on time so your credit is intact you'll get a loan at about half the interest rate or less compared to the cards, your payment will be half or less than you were paying the CC companies , and your term will be fixed so in 3 , 4 or 5 years you are free and clear and you didn't welch out , you negotiated your way out. Everyone is happy , the CC company , the bank and most of all you. You don't take a hit on your credit report. A lawyer friend told me about doing this for a few folks , and I recently recommended a good friend to him , he wanted to get in a position to buy a house in a few years but he couldn't get rid of the CC debt fast enough even though he was paying 50% over the minimum , the interest had him backpedaling. Now in less than 3 years he'll be free and clear plus he's using the extra money he has now to save for a downpayment.

CC companies fight giving up principal , but they are pretty flexible when your debt is aged and you paid in most of the original principal (even though your balance looks otherwise). So if your debt is young , don't expect this to work as well.

Ray