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 ...
“I make one departure from that for my car which I lease.”
I financed my current car. At 2.8% (plus I got all the cash incentives) it makes more sense, as my cash has been working for me making more than that in the meantime. My credit card gets paid off in full each month.
Does anyone think that the Dave Ramsey workshops, on living
Debt Free, that go on all over the country are causing this pay as you go story? I see signs for Workshops by Dave about every 6 weeks in the Dallas area.
AM
Additionally, my CC, and many others, double the warranty on purchases. It adds a year to five-year warranties. So there are advantages to using one on major purchases. Put it on the CC, then go home and immediately pay it off.
Carolyn
Carolyn
Could be the effect of Dave Ramsey. I think it is more likely that it is simple demographics. The peak year of the Baby Boom was 1957-58. Those people are all 50 now, and that seems to be an age where people really stop and take stock of where they are. Most 50-year-olds know they are not likely to get a higher paying job and most have kids about to go to college. They realize they are only 15 years away from retirement and a lot of them haven’t put enough away. They are in the house they intend to stay in until they retire and they have already bought all the stuff they need to put in it. People who are 50 realize that nobody cares what they look like anymore so they stop spending so much money on clothes, shoes, handbags, cosmetics, even hair coloring. It is most important to them now to start seriously saving for college and retirement, and there isn’t much stuff they really need or want to buy.
“In fact, I’m MORE LIKELY to spend recklessly when I’m just pumping money out of an ATM.”
This is why I said, don’t have an ATM and do it the old-fashioned way.
I don’t think anyone was accusing you of being anything in particular.
What we ARE saying is that our theories would be the norm, and not the exception. The fact this story is printed about credit, et al, is proof that the majority of people don’t get the benefits of credit (or ATM) as you do. They *don’t* see what they’re really spending using credit and just use it up the wazoo.
IOW, it would seem you are the exception and not the rule.
Thank you RS for your very kind post...I appreciate it :)PaMom
I also pay for everything on one credit card (which I pay off at the end of the month), more so I can get a better idea of where all the money goes. It’s nice that most online banks allow you to download your transactions to your PC accounting package
Using them for regular purposes and carrying a balance over time, however, is not wise.
You know why divorces are so expensive, do you not?
“The generation that lived through the Depression as adults has not been around to provide counsel for the last 10-15 years”
I lived in the depression and i’ve never paid interest on anyrhing but one home mortgage and it’s been paod off for 20 years.
If you haven’t got the money you don’t need it.
I’ve never in my life had less than 6 months earnings in reserve for emergancies and that’s the minimun.
Because they're worth it.
DING DING DING! Never gets old, because its so true.
Here's the thing about an economy that depends entirely on service and customer spending: it inevitably puts itself into a Catch-22 that can't be circumvented. The jobs depend on the spending, and the spending depends on the jobs.
Did you know if you buy gas with a debit card theyput a hold on a certain amount of money in your account and don’t release it for 24-48 hours ?
If you are doing errands one day, you may find yourself over your balance and your bank will charge you fees.
Thank you. Pretty much what I said back in post #2 before someone else told me that what I'm doing is not what I'm doing. I know for a fact that since I started using the card more often and having everything lumped on one bill, my spending is more constrained and I know where the money is going without being nickel and dimed all over the place.
Moreover, since I'm not breaking the bills in my pocket, I have less spare change to throw away on the silly things, the impulse buys (a buck or less kind of stuff) that will add up over time.
Does that make us jaded or old and wise?
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