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A Life Without Debt: Grudgingly Taking the Punishment

By , July 7th, 2009 | 13 Comments »

The other day I was feeling punished for my good financial habits. My savings are earning pitiful interest, thanks to the low rates in place to prop up the economy. There are no mortgage or housing breaks for me, since I don’t carry a mortgage. My credit cards have had their limits cut and interest rates raised. (Not that this really matters to me because I don’t carry a balance and have rarely approached the limits. Still, because it wasn’t my choice it grates on me.) I have to pay more for everything and every month is a battle with my banks to fight off the new fees they want to slap on me for products that were previously free. My taxes are going up and will continue to do so to cover the debt that the government is racking up at an alarming rate.

None of this has anything to do with me, personally. It’s all because the irresponsible banks, corporations, and individuals dug themselves into a deep financial hole and now they are trying to find any way to make money or trap people into paying more than they should. It’s annoying to me because I’ve done the right things. I’ve been responsible, I’ve lived below my means, I’ve saved and invested, and I haven’t relied on the government to save my butt. But now it is I, and others like me, who are feeling punished for being careful. It makes me cranky.

Then I saw this article the other day and I realized that things are likely to get worse. The credit card rewards programs that I like so much are likely to disappear. Annual fees on credit cards might become commonplace. Credit card companies may start charging interest the moment I swipe the card, not after the payment date passes. (And, by the way, that will be the day the credit cards are gone from my wallet and cash takes over.) The article made me feel even worse. I found myself thinking I might as well just chuck the debt free lifestyle and start racking it up like everyone else. What’s the point in being responsible these days when everyone is punished, even the responsible ones?

And then came the capper. A friend called to tell me that her house is about to be repossessed because they’ve defaulted on their two equity lines. They have no money, no credit, and no way to change things. They can’t even find a place to rent because their credit is so poor and her husband has no job. They will be homeless very soon unless they can find some family to take them in. I knew things were bad for this person, but I had no idea that they were that bad. There was nothing I could say or do to make it better, no advice I could give. Maybe months ago I could have helped, but now it’s too late. I was sympathetic to a point, but since I knew that most of their debt was from too much spending, not emergencies or medical problems, it was hard not to think, “Great. Another person that I’ll be paying to support in the coming years.” Admittedly it’s not a charitable attitude, especially toward a friend. But I just couldn’t help it that day. And I didn’t like myself for it. I knew right then that I needed an attitude adjustment.

So I sat down to think for a minute and see if I could adjust my attitude. Yes, it stinks that I am paying (and will be for many years) for the irresponsibility of others. It stinks that my financial goals are now more difficult to reach because everything costs more and I’m earning less on my investments. It all stinks. But regardless of how much it stinks, I’m still better off than many. No matter what happens, I own everything in my life and no one can take it away. I have a choice about my credit cards. If they get too annoying, I can dump them because I don’t depend on them to live. I might not be able to do anything about interest rates, taxes, or the fees my bank is chasing me with, but I can shop around for better products. And I have the money to cover the increases without it wrecking my life. If I lose my job, I can still make ends meet for quite some time. I decided that I don’t like feeling punished and, frankly, screwed over at times, but the impacts on me are minimal compared to the situations in which some, like my friend, find themselves.

Being debt free has kept me insulated from many of the problems of this recession, at least more so than many. My life will go on, much as it always has even through this recession and after. I won’t suddenly wake up to find that I owe twice as much on my credit cards because the card issuer jacked the rate. I won’t lose my house or my cars. I’ll still be able to have some fun. I don’t like this economic mess and I’ll still write my congressman to tell him to stop spending my tax money left and right. I still believe that the banks and credit card companies are greedy, soulless corporations. And I still believe that people need to step up and take responsibility for their spending choices. It makes me angry that I’m suffering because of the bad choices of others.

And I have a right to be angry. But it also makes me sad that so many people have gotten caught in a perfect storm of debt and layoffs and other troubles that is causing them such hardship. Yes, some bad choices were made, but maybe they just didn’t know or think it could end up like this. I feel badly for them, much more so than I do myself. Obviously I didn’t have a crystal ball when I decided years ago not to take on debt, but I realize now just how important that choice was. Were it not for that decision, the punishment I’d be taking now would be so much worse. So I’ve resolved to shut up and take the punishment being heaped upon me. It still makes me cranky, but it pales in comparison to the problems of others.

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  • Julia says:

    The default and late payment fees banks and credit card companies are charging now are truly extortionate. I hope some new legislations come into place, and this situation improves.

  • simpleyme says:

    I am so thankful I am debt free I am not sure how I would survive all these new taxes that are being passed

  • Myrna Garren says:

    I am angry because those bankers that got bailed out by the government are still playing their games and not being charged for fraud or worse, in other words they bailed out a bunch of crooks that should be looking at the world thru bars of a jail cell.

  • Anne says:

    Great article.

    That’s the way society is now. The responsible people (who live below their means) are constantly expected to bailout the irresponsible people who lived above their means. I am really tired of it and I have a hard time feeling any sympathy for these people. Sometimes people have to learn things the hard way.

    Credit cards are dangerous, especially in the hands of irresponsible people. Things are starting to go back to the way they were in the old days. If you can’t afford it then you didn’t buy it.

  • baselle says:

    It stinks, I feel the same way.

    But in the big picture it feels like there’s less money around. So if you quietly have some real money and you keep what you have while others are loudly losing their fake money, its a consolation.

    But storing money in a mattress is starting to look better and better. It doesn’t earn interest but it doesn’t get taxed either.

  • fern says:

    I understand how you feel. While I haven’t figured out yet whether I’d cancel a credit card rather than have to pay an annual fee, i have discovered in the past year or two one thing: I hate banks, especially the big ones.

  • Julie says:

    Great article and I agree with you completely. I am so glad that I am debt free.

  • anonymous says:

    You are going to really shake your head when you see your friend finally be forced out of that house, but as a last straw trying to stuff everything she owns into a $100/month storage shed, as if her very soul resides in all that stuff. Please tell her to sell all her crap now. It usually takes several months of living miserably in someone else’s guest room before you realize all that stuff is just crap and that six months worth of storing it away could have bought two months’ dignity of living independently, even if in some hell-hole.

  • Jay Gatsby says:

    #8 – unfortunately, her friend won’t listen. You have to let people fail before they will learn from their mistakes. If her friend has children who will go hungry or naked without clothes, perhaps she can give them some food and clothing that would otherwise go to Goodwill. Unfortunately again, her friend would probably have too much pride (or ego) to accept such charity. Yet that’s part of the lesson. You must learn to accept charity when it is offered. People don’t extend charity expecting to be paid back, but rather that you might “pay it forward” when someone needs your help. That used to be the way in America. Not anymore.

  • EOD says:

    As frustrating as it feels, you are right. You are still better off. Bailouts have replaced personal responsibility.

    I am working to become debt free, except the house, with only $3,000 of student loans left to go! We will never borrow another dime! ๐Ÿ™‚

    Personally I have decided that credit cards aren’t worth the trouble or the risk, even if we were to pay off the balance monthly. If I don’t use them, it’s one less thing I have to worry about.

  • minny says:

    Same here in the UK. When I think of the government’s catchphrase when they came into power in 1997 -things can only get better – and they began to create a ‘miracle’ economy based on massive debt both personal and state.

    What a good time so many people had! Living

  • Diane says:

    I am also thankful to be debt-free. The current financial crisis is still frightening, but so far we’re surviving.

    In the past month I’ve had $750 in unexpected car repairs and an $800 increase in homeowners’ insurance. I feel fortunate to have the money available to pay the extra expenses.

    I might consider paying an annual fee to keep one credit card, but if they start charging interest from the date of purchase I won’t likely use it!

  • Richby30Retireby40 Blog says:

    It doesn’t pay to be disciplined. It’s about joining the crowd and reaping all the rewards. Look at Goldman. They got a free $10billiion bridge loan from the gov’t, paid it back and made billions. They got it right.



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