Think of what you could buy for 2.6 million dollars:
- A house, paid for.
- Several vehicles, paid for.
- College degrees for your children, paid for.
- Nice vacations, paid for.
- A very comfortable retirement, paid for.
If people turned around and saved the same amount of money burned up in interest payments, they would be millionaires by the time they retired.
But no, we've trained ourselves to satisfy our every want, on credit, with little thought to how much money we are throwing away in interest due to our impatience and greed.
In the early years of my marriage, my husband and I paid over 15% interest on a $40,000 home improvement loan. We refused to think about how much money we paid to the bank each year due to our inability to wait until interest rates dropped dramatically or until we saved enough money to pay cash. We thought everyone operated this way, that living with debt was normal behavior. And based on our government's modus operandi and example for us to follow, that's the dysfunctional truth.
I never had $15,000 debt on my credit cards, but I did my fair share of interest payments and late fees and even bank overdraft charges in my younger years because I was ignorant about managing my personal finances. And I wasn't disciplined enough to change my sloppy ways until it finally dawned on me how much money I was throwing away every year.
One of the few people in the media promoting debt free living is Dave Ramsey, and it's exciting to listen on the radio when a person or couple calls in to do their debt free scream. I hope to be able to do that one day. Ramsey is a rare voice of sanity and self-control in our out-of-control, over-indulged culture.
Today, I use one credit card to earn travel miles, and I pay it off at the end of each month. Credit card companies are the modern day loan sharks, and they're laughing all the way to the bank as they prey on folks' ignorance and weaknesses.
The credit card companies’ term for people like you and me who pay their credit card bills is deadbeat, meaning they can’t cash in on long terms and interest because we don’t have anything to apply said interests to. While we are still valued customers, their primary focus are those who are borrowing heavily and are paying in increments. As you’ve said, these are the ones who end up paying way more that they borrowed in terms of compounding interests on their cards. Sadly, most people are built around this can’t-wait-want-it-now mentality, which the credit card companies are riding on to get their profits.
ReplyDeleteJaden Allred
Amen, Jaden! I wish our public school system did a better job preparing kids to manage their own finances well. I'm sure the material is being taught, but it's not meaningful enough to stick in real life for too many students. I heard a lady on the radio today who was losing her house because they skipped about a year's worth of house payments to try to get her and her husband's student loans paid down rather than keep a very modest roof over their heads. Where did they learn that kind of prioritizing?
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