Ever feel like you are working harder and yet still falling further behind? You may be right. Average salaries haven’t increased in 30 years and the cost of living has increased 200 – 300 percent. For the average person this means they are paying more for their housing, food and transportation costs on less money than their parents had.
The credit industry counts on this to lure people into getting credit to sustain a lifestyle they can’t afford. They get college students into credit card debt and young workers into mortgage debt that neither group can really afford. Remember credit card companies don’t make money off of you if you pay your balance off each month. They actively look for people who can only make the minimum payments. Resist borrowing at the amount a lender tell you that you can afford and instead look at what you feel comfortable borrowing. A good rule of thumb on a major purchase, like a house, is could you afford to pay it off in 15 years, and could you still manage with reduced income.
Payday loan companies are even worse. They prey on people who are desperate. A person may need to cover a month’s rent with a short term loan, but because of the huge interest charged they can’t pay the loan off at the end of the term. They go to another payday loan company to get a loan to cover the first loan and soon the $300 they borrowed has ballooned to $3000.
We are told that we need. So we get into the debt trap hoping that we can afford it. No longer do people save money for things before they buy, they get credit to cover immediate wants and worry about the payments later.
Fewer and fewer of us can afford all the things we are told we need to be successful: a computer, cell phone, big house and a car. Debt in the industrialized world is out of control. In the end we either need to change the way we define success or fight for living wages for the average person.
7 responses so far ↓
1 Tim Ramsey // Apr 21, 2008 at 12:00 pm
I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.
Tim Ramsey
2 Aaron Wakling // Apr 21, 2008 at 12:30 pm
Good Blog. I will continue reading it in the future. Nice layout too.
Aaron Wakling
3 kim // Apr 21, 2008 at 12:48 pm
I am in this position right now. My mortgage went from 2000.00 in 2005 to 6000 by mid 2007 and when the interest rates went down our mortgage didn’t. Therefore, credit cards we had to use to pay for things. It was horrible. I understand this all to well.
4 cindy // Apr 22, 2008 at 7:14 pm
Amen to that. Something needs to be done…great blog.
5 PaydayLendingRep // Apr 24, 2008 at 10:59 am
“We are told that we need.”
Critics of the payday advance industry claim are telling consumers that they don’t need payday advances and they have made it their mission is to take a financial choice away from consumers.
The opinions of millions of hard-working payday advance customers have been lost in the debate over payday lending. Their voices are overshadowed by critics who have never actually used the service. Our customers are real people who use payday advances to solve real problems.
Consumers need to be able to choose what financial products fit their situation best.
6 Who should I blame? // May 2, 2008 at 2:35 pm
I agree and disagree. The media makes it appear as though we are all gullible and subject to easily being swayed by the “need” for consumption. We tend to blame individuals, entities and sometimes, entire industries for all of our problems instead of taking any kind of responsibility for our own decisions and actions. I am the only one of my siblings who is not a home owner and it’s because I know that I’m not ready for the responsibility. I refuse to jump into a mortgage that I know I can’t afford just to keep up with the rest of my family. Some circumstances are not in our control, i.e. job loss, pay reduction, decreased value of a dollar, however, many things are, including a decision whether or not to take out a payday loan.
7 myworld // May 7, 2008 at 6:52 pm
Sounds like you have made the right choice for you. Home ownership is great if you can afford not just today but tomorrow, especially considering the unpredictability of some of the circumstances you mentioned. Good for you for knowing your limits and sticking to your guns.
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