With the advent of credit cards, I can now buy big-ticket items without actually having the money!  Suddenly, I can buy a car, a big-screen TV, several computers and even buy groceries without actually having the cash to support it.  In many ways, this is a great thing!!  No more waiting to save up.  I can do it over time.

The problem with this cycle is I will continue to buy big-ticket items.  I won’t really care about how much I owe because I’m still buying stuff that I want.  Soon, the credit card companies want me to pay, except they don’t.  They’re perfectly fine if I pay $20 a month for a $4500 bill because they’ll get more money from me through the interest.  But the average credit card user doesn’t know this (surprising, isn’t it?)

I left college with a little under $15,000 of credit card debt.  That’s right.  I was determined to pay that it off within five years.  I took a hard look at my budget, pinched everything I could.  It took me two years to finally pay it off!  I’ve been debt-free since August 2008.

I didn’t pay this off through free money.  I saved every penny I got.  I cut back on all my spending.  And through discipline and toil, I was able to pay it off and still save money!

That’s right!  I still was able to put money away for saving!

I don’t get paid that much.  I’m a firm believer that you can save no matter what you get paid.  Most people don’t because they are under the impression that they need every penny.  This is simply not the case.

The auto industry has only itself to blame for getting into this mess.  The problem is three-fold:

1. Making products that very few people were interested in
2. Encouraging people to buy big expensive trucks and SUVs when they didn’t need or want them
3. Folding into union demands (I’ll cover unions in a future blog)

The auto industry has done little to save itself.  They saw the tide turning years ago when Toyota sold out of its first hybrid model.  They refused to listen to reason when Congress demanded them to create fuel-efficiant cars.

The sad part of the auto industry is that many other industries rely on it.  I am willing to admit that it is sad that possibily millions of people will lose their jobs for their companies mistakes.  But these same people often haven’t saved.

When people complain about the stock market and how much of their retirement they lost, I have no sympathy for them.  What these people fail to realize is that there is absolutely no guarentee that their retirement funds will grow.  If they wanted a guarentee, they should have invested in government bonds.  But they didn’t.  They have only themselves to blame.  (Note: I have investment accounts that have lost money.  I have never blamed congress or banks for this mess.)

When people complain about losing their jobs, I have a bit more sympathy.  No one can really be prepared to lose a job.  But everyone can be prepared for emergancies.  Having a savings plan in place before you have to use it is always smart, but rarely exercised.  I have no sympathy for people who have no savings.

The auto industry and its works have brought this situation on themselves.  To expect the American tax-payer to help them is tantamount to me asking the auto industry to pay my mortgage (that is, if they were healthy).

Yes, millions of jobs may get lost.  But perhaps there is a lesson to be learned from this: save!