When I was on the East Coast last spring I kept seeing signs similar to the one above – announcing “Guaranteed Credit Approval.” Hmmmm, I wonder what sort of percentage they charge for guaranteed credit? I saw these signs on everything from department stores to automobile lots to trailer parks. Why, oh why is credit everywhere and why is it so easy to get?
As a whole I do not like the idea of credit. I am concerned that if I do not have the money to pay for something today then I probably also will not have it tomorrow. I am also concerned as to society’s inability to differentiate between a “need” and a “want” when pursuing credit options. If a person needs a car to get to work, it is a legitimate need – that may mean they need to take out a loan. Yet, they need to keep in mind, they need a car to get to work, but do not need a brand new SUV. A modest car is appropriate and okay. Medical debt is something a necessity, particularly with health insurance limiting coverage and so many Americans completely uninsured…… Yet, it amazes me when people go into debt to purchase a pair of designer shoes or a special purse or even a birthday present for a loved one. We need to be careful and understand that debt is a scary beast we want to avoid.
My partner and I have a very strong rule in our home – we do not spend money on anything if it cannot be paid off at the end of the month. We have no credit card debt. In fact the only debt between us is our mortgage and an old student loan of mine. We drive a car that is over 11 years old – it is not so pretty, but it runs beautifully and we own it. I am guessing we will be able to drive it at least another ten years if we take decent care of it. Yes, a shiny new car would be fun, but definitely not necessary.
In our home we have seen room for improvement. We do not spend money we do not have, but we also purchase things we do not need. This is a problem both with spending and also with the limited space in our apartment. We continue to challenge ourselves to not purchase anything unless we are willing to get rid of one item in exchange. This takes practice and we are not so great at it, but are always striving to get better. We have so much “junk” in our home, most of which we do not really need. I want to work to purchase less junk and instead spend money on family adventures or special bonding experiences (theme parks, trips, etc.) Or better yet, just save!
It is my hope that we will be able to be frugal enough that we can work to pay our mortgage off early. Then we will need to concentrate on saving for retirement. Gone are the days when we expect to live a wonderful old age on our own retirement and our inheritance – there is no inheritance for either my partner or myself – we need to plan accordingly. At this point it is my main desire to put away enough money that we are not a burden to our children in our old age. I worry because one figure I heard said that we will need 80% of our current monthly budget when we retire – I know of very few people who are able to put away enough today to maintain 80% of their current budgets when they retire. I like to think I will need less money, as my mortgage will be paid off and the kids will be out of the house…. but with inflation, I suppose you never know. My question is, “how on earth can we really save that kind of money for retirement?” If that is what we really need, are we heading towards a generation of growing geriatric poverty?
Today, 219 days ’til 40, I am conscious of my spending and my saving. I will not buy into the credit craze and will challenge myself to question what I am spending and why.