Posted on 02/05/2008 5:48:11 AM PST by xtinct
For more than half a century, Americans have proved staggeringly resourceful at finding new ways to spend money.
In the 1950s and 60s, as credit cards grew in popularity, many began dining out when the mood struck or buying new television sets on the installment plan rather than waiting for payday. By the 1980s, millions of Americans were entrusting their savings to the booming stock market, using the winnings to spend in excess of their income. Millions more exuberantly borrowed against the value of their homes.
But now the freewheeling days of credit and risk may have run their course at least for a while and perhaps much longer as a period of involuntary thrift unfolds in many households. With the number of jobs shrinking, housing prices falling and debt levels swelling, the same nation that pioneered the no-money-down mortgage suddenly confronts an unfamiliar imperative: more Americans must live within their means.
We dont use our credit cards anymore, said Lisa Merhaut, a professional at a telecommunications company who lives in Leesburg, Va., and whose family last year ran up credit card debt it could not handle.
Today, Ms. Merhaut, 44, manages her money the way her father did. Despite a household income reaching six figures, she uses cash for every purchase. What we have is what we have, Ms. Merhaut said. We have to rely on the money that were bringing in.
The shift under way feels to some analysts like a cultural inflection point, one with huge implications for an economy driven overwhelmingly by consumer spending.
(Excerpt) Read more at nytimes.com ...
And when you see it all at once, it's on HELL of an eye opener. (Kinda like what it must've been like before "withholding".)
Helps me save, and I get 1% or more back, so the discount's nice.
Yup. I finally got smart, moved all of my credit card debt to one card where I’m getting 3.99% for the life of the balance. It will be paid off in a year...and everything else we need, we pay with cash now.
Its ok to charge if you pay if off every month, same as carrying cash. Don’t spend more than you make is the key.
For 20 yrs, I used a CC and paid it off every month, Zero interest. Why is that so difficult? (I quit using it when debit cards came out.)
I’ve never financed anything except my house and my car except I did have to take out a loan to pay off divorce debt but that will be paid off this month.
Her behavior will completely destroy the US economy if it becomes widespread. I'll bet plenty of bankers and politicians needed some extra Pepcid AC after reading this quote. ;)
Well, in today’s political climate, you will pay-as-you-go or pay-as-you-stay...
But, either way, they’ll make sure you PAY.
Deflation?
Exactly what I do, it works great I charge everything and pay it at the end of the month. Anyone with self control this is the best way to budget. I have payed it off every month for the last 6 years and will always do so.
As opposed to who? To which other country?
Frankly, I'm getting a little weary of this "bash America" slant on so many of these types of articles.
“With the number of jobs shrinking...”
The NYT has been waiting a LONG time to be able to start getting that phrase into articles.
NYT, the anti-capitalist paper, trying to get more people to NOT spend money.
We finally have a winner !
Debt destruction is reducing the money supply at an accelerating pace and there is nothing the Fed can do when there is declining trust in the banks' solvency and transparency.
Sorry, but I don't see this as a bad thing.
Now if we could only get Washington to live within its means (that means you, too, Pres. Bush).
Now that time has passed and consequences of these and other decisions have finally caught up top them, they have fled their home and migrated to another state to rent a house from a friend...creditors holding the bag and a house in foreclosure.
A situation like this, which has been years in the making, now looks like a statistic of the "Bush economy"...even though very few want to address the fact that individual choices; not some bureaucrat in DC, is to blame.
I don't know if you ever listen to Dave Ramsey or not, but according to him, only about 3% of people who plan to pay off their card every month actually do so. For those with really good self-control, it works. For most people. . .the intentions are good, but the will is weak.
Carolyn
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