Tuesday, August 11, 2009

Our Money or Theirs?

Credit or Debit? We go over our limit to have the things we wish we could afford, we say we can afford the minimum payment and get excited when the minimum payment goes down and it turns out you are paying it off even slower. out of your 50 dollar minimum payment 35 goes toward the interest 5 goes toward you protection plan and you are actually paying 10 dollars off of your principle. Instead of building the credit we thought we were going to we miss a payment or two and owe an extra 60 dollars and soon you are so far behind on all of your 50 dollar a month payments from numerous opened credit cards that you start getting numerous calls a day from ruthless creditors that wont budge. Even if you pay them your credit is still scarred. You now find yourself paying more on every loan you have and it ends up costing you even more in the long run. How could we avoid this?
We can live one step below the amount we make, you will be able to pay for everything you need and you will have a surplus (even if not much) in case of emergency or for the future. We long for earthly possession and win people over with the fancy car or purse, the nice dress, the elaborate house. Instead we need to think about the families we have, the amount of room we need the furniture we will use, the car that will be most efficient for the children (if any) and husband. Do we need 2 car? Is it close enough to walk or ride a bike? Is the extra office in the house worth the extra 50,000 dollars.
Once our credit is ruined it is a hole that seams to get deeper and deeper. soon we are buried and we are avoiding the phone and throwing away mail before we open it.
When my husband and i were married we were negative without me even being aware of it. He had made many college mistakes that he didn't think would affect his future or his future families.
We now have a strictly cash budget which stops us from over drafting our account or getting deeper into credit issues. We have envelopes that we save and it only comes out if it is being used for that purpose. If you don't get holes in your pockets it may be a good idea for you.

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