debt

There is much being said about debt recently, and how to get out of it. Today, I will add my two cents worth.

First of all, I think it is fair to note that our economic problems, at every level, are traceable back to debt. High debt, bad debt, debt. Corporate debt, national debt, personal debt. There is too much of it on every level.

Sometimes good advice is hard to follow, but the easy way in life never brings the desired results. Here are my rules for managing debt in your personal life.

1. spend as little as possible. Avoid the more expensive path and take the frugal way every time that you can. Eat cheap. Rice and beans. When I cut up a polish dog in the rice and beans, they go over very well. You know what this means. Stop going out to eat so much, except for Maya's Mexican Bistro. Stop buying things that you do not need. If you are a compulsive shopper, start chewing your nails or popping your knuckles instead. spend as little as possible. Take a brutal inventory of your spending habits and make your bills smaller. Like the Aflac duck said, "smaller bill." That's where good money management begins.

2. when you must buy, buy smart. Do your homework. Check it out and compare. Buy only when you know you have the best deal.

3. Credit cards. Cut them up. Or at least, pay off the balance every month. That practice can even get you in trouble. Many a well meaning person has said they were going to pay them off, but then the balance starts to grow. Cutting them up is best. Pay with cash whenever you can. Wait on a purchase until you can pay with cash. It won't kill you to wait.

4. Borrow only for a home or a car. Avoid buying more home than you need. Easy to say. We have certainly sinned on that advice. Never ever take out a home equity line of credit. Your home is protected in a bankruptcy unless you have a home equity loan. If you do, according to Dr. Phil, you can lose your house to pay the second mortgage. Get a fixed rate on your home as soon as you can. Have a mortgage person keep an eye out for the best rates for you. We had a fellow watching rates and we refinanced a few years ago at 4.875%. Never take cash out of your home if you refi, just work for better terms and lower rates.

5. Cars. Stop buying cars all the time. Some people buy a car every time they need new tires. I have several friends in the car business and I wish them well, but you can lose a lot of money when you trade cars all the time. In most car transactions, the dealer makes money on you twice, once on the car you buy and once on the car you trade in. If you finance with them, they make money on you three times. I choose to drive cheap cars. 2000 Ford pick up. 97 Pontiac Grand Am. Alli has an 03 Neon that we bought for $1000 and fixed up. Cathy has an 05 Honda Civic. The battery died in it yesterday. Hmm maybe we should go buy a new car. Ha! But that is how some people think. When I was a kid, cars were worn out at 100,000 miles. Today, they are just getting started at that age. The thought that you should trade it in when your car gets 80,000 miles on it is silly. It is rich people thinking. What if it breaks down you say? well, that repair is still cheaper than a car payment. And what about the thousands that you will pay in sales tax. You know when your car is really dead. Keep it until it is truly dead, then buy used. You can lose a lot of money trading cars. Be careful.

6. Change your way of thinking. You don't have to keep up with the Jones's. You do not deserve that new outfit or that new car. The world doesn't owe you anything. Learn to live within your means. Manage your life or it will manage you. Joy is found not from getting stuff, but from making good decisions and living well.

7. Think spiritually about your life. My life is not about stuff, it is about being a child of God. We are all stewards in His world, and we have own nothing. We brought nothing into this world, and we will take nothing with us. Regarding money, John Wesley said, "make all you can, save all you can, and give all you can." When you manage your money, however much or little that is, instead of allowing it to manage you, you are much more likely to be able to save some and give some. To have saved for something, to be prepared for a bill is a great joy. To be able to give generously is even a greater joy. That is when money finally makes us happy, when we give it away. Just because we made it, doesn't mean that we have a right to spend it on ourselves. Live more simply so that you can help others. You will be a happier person if you do.

They say that you get what you pay for. This advice was free, so take it for what it is worth, but let me tell you, when I ignored the above principles, my life was a mess. To the degree that I have followed them, I have found great joy. I wish the same for you.

It's a beautiful day in God's world, be sure to see the good.