As most of you have figured out by now, I'm what you probably call "old fashioned." Other words to describe me would probably be frugal or thrifty.
Sometimes I listen to Dave Ramsey on the radio. For those of you unfamiliar with Dave, he gives financial advice to people who need some major help. I think part of the reason I listen to it is to make myself feel better about my own personal financial situation.
A typical caller would be something like this: "Hi Dave. I've got a situation I'd like to have some advice on. I've currently got an older car that is worth about $3,000. I owe about $10,000 on it. I drive a lot and need a reliable car so I'm looking at a $50,000 BMW. I don't think I can qualify for a loan for the car because I've got about $25,000 that I owe on four different credit cards and haven't made a payment on them in several months because I only bring home about $1,000 per month. I've been at my job for 30 years and have built up my 401(k) to almost $70,000. I was thinking about cashing in most of my 401(k), paying off my old car and paying cash for the BMW. With what's left over, I can start to pay down the credit cards. What do you think, Dave?"
Dave, to his credit, normally very calmly explains the stupidity of the plan.
I guess I don't get what some people are thinking regarding their finances. When I was growing up, I was taught that if you didn't have the money to buy something, you didn't buy it. It's really not a very hard concept. Why is this so difficult for so many people?
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Funny you should blog about this now. In the local paper this week, there is a list of bankruptcies. People who owe $200,000 with a credit of maybe $1,500...go figure!!! I guess I'm old fashion too. If you can't afford it, you shouldn't own it! Great post Dan!
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