"The long-awaited, long-feared consumer crunch may finally be here. That might not mean an economywide recession, but the pain for American households will be deep."
I find something very ironic here. Just after your initial posting, the advertisers put up a vote for Hillary poll. The advertisements may change but, if that one is still there (and being a poll, it will probably go away) then it should be a sign or us of some sort.
No matter what happens in the next year... and in the subsequent election, we are in for a bumpy ride.
I've been a bit lax in doing some consumer threads but, the theme will always be:
Eliminate your debt by paying off your credit cards and other high interest loans first AND not signing on to any more in the future
When shopping, NOTHING is a bargain no matter what the sale price unless you need it and are going to use it right away. Furthermore, any "savings" is flushed down the toilet if you can't afford a sale item and buy it on credit.
When you get your paycheck, pay yourself first. Put 10 (TEN) percent of your take home pay into some kind of investment (401k, Roth account, stocks, bonds, or whatever works for your financial future.)
Learn how to manage what you have and you can weather the coming storm.
I did notice that poll on Hillary. And just as I opened this post window, there is one up there from Newsmax to vote on the Republican contenders--off to the right there is an ad for smilies to use for posting or emailing.
It is what I refer to as 'funny' how things in life seem to cross paths at seemingly opportune times.
Speaking of opportunity, my comments on the 'crunch' coming are as follows.
All that Enforcer said, try to get it done. Especially the credit cards. I'll elaborate:
About 6 years ago I had credit card debt in the 5 figures. I was good to go. The credit card company, which is a bank, told me so!! Then they raised the interest rate on my existing debt, claiming I 'wasn't being aggressive enough' in my payments. I never was late, I paid the minimum, just as they asked.
Well now, that interest rate increase really made me angry. I developed a plan. A plan for a budget.
And what I did was, I paid all my bills for the amount that was due + whatever over that amount I could. But on that credit card, I never once paid less than the minimum, + $100.00 over that amount.
As the other bills got paid off, I took all that money and added it each month to my minimum + $100.00 credit card payment. In six (6) months I was out from under all my other debt, and in another four (4) months, I was out from that mountain of debt on that credit card.
Then I started chopping away on the mortgage. I paid my regular mortgage payment, then I added all the money that I had formerly been paying to All the other debts, and added that amount to the mortgage payment. I still have a few years to go on the mortgage, but now I use that bank's money!
As an example:
I recently bought new tires for the car, and had a front end item replaced, and the front end aligned. The cost was $768.00, out the door.
So, while I had the money to pay cash, this purchase was made on the fourth of the month. My closing date on the credit card is the 2nd or 3rd day of the month. I charged the tires and front end work!
So, I used that banks money, to my benefit up until the closing date for the next month (28 days) and then I had until the 20th of that next month to pay a minimum. (20 more days).
I paid it ALL off with the same cash I had the day of the purchase! That $768.00 made a little interest in my bank, during the 48 days I used the credit card bank's money, and I did not pay a dime in interest for using that credit card bank's money!!
They make the rules, I play them to my advantage!
Make a plan.
Cordially
CDJ _________________ A ship in a harbor is safe, but that is not what they are made for.
When working at Lucent Technologies I was making the big bucks. REALLY BIG BUCKS. We even had a bank (not to mention a heath spa, in house hospital, two cafeterias, two gift shops, and a legal aid office on the premises.) Anyway, the bank issued us credit cards at 5.75 percent.
I couldn't beat the rate at the regular banks in town so I took the money I needed from existing credit card limits there. And then we got laid off.
So, here I am owing $20,000 in credit card debt AND I'm laid off. It was no big deal until the credit card people jacked up the rates. It went from 5.75 percent to a whopping 29.9 percent in two years. Suddenly I was laid off and owing $25,000 in debt just on credit cards.
Every once in a while one of my other credit cards would offer low rate money for three to six months as part of a promotional. I would take that money and pay toward the high interest card. But, the debt wouldn't go down.
Finally, I had to call the credit card people and tell them to either lower the interest rate or I'd go belly up (and that's no longer an option with the new bankruptcy laws.) They would not lower the rate but, instead gave me four months to pay off the principal with no accruing interest.
Between cash on hand, raising money selling off personal assets, and again using the two lower interest rate cards, I got that monkey off my back. Five years later I've gone from that initial $25,000 + bill to about $4700... and I plan to have that paid off by the end of 2008.
The moral here is that once you owe the credit card companies, you really OWE them. One study said that if you owed $10,000 on credit cards and made the minimum monthly payment without using that card again, it would take you twenty six years to pay it off.
Further, credit card companies say that if you owe more than six months of your salary on credit cards, the statistical probability is that you will not live long enough to get completely out of credit card debt.
If you owe on credit cards, we can help you on the board or in private to find the best way to pay them off. Pay them and quit using them.
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