The As Is Situation - Consumer Debt

So far I've talked about the house and the car. These are arguably the two most excusable debt items we should carry. In fact, as far as non income producing debt is concerned, these are the only two debt items we would be excused to carry.

Now I'm moving on to a very painful subject for me. Credit card debt. I have about $xx,000 in high interest credit card debt. This is the debt that is sucking the life out of our family finances.

My grandparents grew up in the Great Depression. They've never owned a credit card in their lives. They never earned a lot of money. They paid case for their house, their cars, and still write checks or pay cash for everything they buy.

My mom grew up as a young adult in the seventies. She has always owned a credit card, but has never paid a penny in interest to a bank. She too has never earned a lot of money. Her house is paid for. Her and her husband's cars are paid for (eight in all - they collect them). She will be able to retire at age a very young 60 on three acres with money to spare. She too writes a check or pays cash for everything she buys.

I grew up as a young adult in the nineties. I too have always owned at least one credit card, and I have paid tens of thousands of dollars in interest. I make more money than either my Mom or Grandparents have ever considered. I am the only one in my family with a college degree. My job takes me all over the world. I use sophisticated tools like online banking, buy things on interest free credit deals, and usually stumble in to more credit card debt and as such I have a negative net worth with no end in sight.

A large reason for this situation is my inability to handle our consumer debt.

At least once every four years or so I get inspired. I'll spend about a week, creating a spreadsheet to track everything, get a spending plan in place, and start to attack the debt.

And at least once every four years, I look back over the previous four years and wonder, "how in the heck did we get this far underwater?!"

My take on it at this point is that we lack discipline. We bankroll our lifestyle through credit rather than through means.

I've talked with my grandmother and my mom about this fact and I will share with you a bit of what I'll call Memaw's wisdom. As is often the case with family finances the answers are quite simple.

Memaw says, "don't buy it, if you can't pay for it"

Time to get the spreadsheet out and figure out what I owe to whom and when it's all due.