financial reflections

Americans have a continuing love affair with debt.  I’m not sure when all this stared, but it seems that the marriage between consumers and debt began with the arrival of the first “gold card” about 25 years (or so) ago, and has only strengthened.

But if you’re faltering in your indebtedness, I’ve come up with a sure-fire guide to keep you up to your eyeballs in debt:

You’ll likely stay in debt if you prefer…

• Debt consolidation to debt elimination - I’ve tried this one and it works.  First I tried to consolidate my credit cards onto another card.  Then another.  And another.  Then I lumped some of the cost into my second mortgage.  Maybe debt consolidation gets some people out of debt, or rescues them from bankruptcy.  But for me, it was a great way to stay in debt.
• Credit cards to cash - Go after those bonus miles, cash back bonus or whatever the credit card company is throwing at you.  Remember, studies have shown that you buy more stuff when you use plastic instead of cash, so you’ll be sure to keep those balances high.
• Long term mortgages - There’s 40-year mortgages out, and now even 50-year mortgages in California, according to Bankrate.com.  And if that does offer you some prayer of actually owning your home in your lifetime, you can do what I did and get a interest-only mortgage, so you’ll never pay off a dime of debt.
• Long term auto loans or leases to auto ownership - There’s at least six year loans on new cars now, and you can even lease a used car.  Don’t secure a shorter term loan on a quality used car from a place like a credit union before you buy.  You may end up owning the thing!
• Seat-of-your-pants money management to a written budget - This worked great for years.  I’d just kind of judge the balance on my checking account and go.  Now that I do a budget, the money just seems to stick around.  I end up using some of it to pay off my credit cards.  I’ll probably pay them off this year!
• Using your credit cards as your emergency fund - As long as you are flying seat of your pants with money, forget the parachute as well.  This worked wonders for me as well.  I’d pull out plastic for a car repair or medical bill.  It built up the balances so I couldn’t pay them off each month.

That’s all I have for now, but I’m pretty sure it’s more than enough to keep your net worth negative like mine is.  If you work really hard, you could be one of the thousands (maybe millions) who files for bankruptcy in 2006.

Of course, the whole list is tongue-in-cheek.  I posted a similar list of my money mistakes before and it was a pretty good tool to show me where I went wrong.  Likewise, this post has shown me where the traps are as I dig my way out of debt.  I hope you’ve found it helpful as well.

Have another way to stay in debt?  Post it below.  If I get a full list, I’ll have a better idea of the potholes in the road to financial freedom.