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Dec. 13, 2006 Today was a sad day. You see, I work in the service industry where the gratuity of strangers keeps my head above water and food on my table. This week I have made about two-thirds less than usual. Also, today my consumer debt, compiled with more consumer debt, has put me into financial straits in the middle of the holiday season. Happy holidays, everyone. I can't afford your gifts. But, my fellow Americans, who is to blame for this fracas? Me. The culprit is my previous greed and it has drained my bank account. The thing is that I don't feel so much alone in my problems. You see, most Americans have this problem, just not as visible as I am putting out there. According the Morning News' Kim Souza, "the Federal Reserve Bank reported in September that consumer debt had escalated to an all-time high of $2.4 trillion -- and that doesn't include mortgage loans. Consumer spending as a percent of disposal income skyrocketed from 65 percent in 1980 to 110 percent in 2006. Simply put, that means the average American spends $1.10 for every net dollar earned." On average, most of us have little or no money left at the end of the month. But that doesn't stop us from buying things. In the past year I accumulated thousands of dollars in credit card debt. And what do I have to show for it? Over $50 per month in interest. Between that and a car loan and student loans, I pay a week's salary just to interest. So it's going to take a long time to pay that off with what little disposable income I do have. Most Americans don't have varying income like I do. Some weeks I get more money, sometimes I get less. So what can you and I do to better the situation? Borrow more money? Take out the equity in our homes? That's good if we show discipline but not if we go on spending sprees. Our government doesn't do much better. Running a deficit for the better part of a decade, we've sold parts of our debt to foreign entities. And this under a conservative government? Hopefully we can all make a New Year's resolution to be better with our money. I know I will be. Here is my plan: -Buy more groceries and eat at home. Spending money on going out can be upwards of $300 per month if you were to only go out three times per week. -Buy less impulse items. Instead save for a one-day spending day a month. That way I get some toys but don't affect monthly bills. -Put money daily into a savings account. As little as $5 per day can be almost $1,500 per year just for the working days. -Pay more on the higher interest credit bills. As little as $10 per month can mean $120 per year more and can lower interest payments. -Get rid of unnecessary bills like premium cable or give up coffee shops. The less I have to pay per month, the more I can pay for what I already have. Do you realize that a latte a day for five days a week is $20 per week? That's over $1,000 per year. Simple solutions can lead to financial independence and less stress about money. Remember that the Joneses, the ones we keep chasing after and wanting to be like probably have more money than we do. Our mistakes are in assuming that what we own will bring us happiness. Usually our purchases are only a temporary fix. Keep it real. ------------ About the author: Nicholas Olson is an aspiring playwright and former journalist. He spent parts of his high school, college and professional life as a journalist, serving as a military journalist from 2000-06. Mr. Olson is an avid writer and enjoys political opinion. His views are not that of any particular party or of the country he once served: They are his own. Email: nicholasjolson@yahoo.com Comment on this article here! ------------ All articles are EXCLUSIVE to Useless-Knowledge.com. Please link to this article rather than copying and pasting it onto your site (which would be unauthorized and illegal). |
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