Tuesday, June 17, 2008

Death by plastic


Have y'all heard that Ed McMahon is on the verge of losing his home? He's over $600 grand in arrears. TMZ.com is reporting that much of his financial woes are due to his wife's out-of-control shopping, reportedly racking up a credit card bill of around three quarters of a million dollars. Yikes!

Don't feel TOO bad, Ed--you aren't the first person whose spouse almost spent 'em into the poorhouse.

Can someone please explain to me why people just don't seem to get it? You can't spend more than you earn! It's that simple. Yes, we use credit cards, and we used them extensively (and creatively) when Ken was working the plan to dig out from his divorce debt. We don't carry a credit card balance now, and pay them off every month. Credit cards have their place for their convenience, ease of use when shopping online, and as a way to handle home emergencies (although a person should try to put money aside for such emergencies). But to completely finance your lifestyle and to finance compulsive shopping? No way.

Ken made it pretty clear to me early on that he didn't have much tolerance for the hobby-of-the-month mentality, and luckily, that's not my style. Nothing against anyone who loves their crafts and hobbies, but it can definitely cost you some cash. A while back I was on a jewelry-making kick, and I made some nice earrings for myself, friends, and family. A little while later, I developed some kind of allergic reaction and can no longer wear pierced earrings. That was the end of that! Ha! Luckily, I didn't spend a ton of money on the supplies. It's easy to get caught up in doing these things, but it pays to be cautious and not jump from one hobby to another. As for clothes shopping, I love a good bargain as well as anyone, but I've learned to think about it and decide if I really need it. At least 75% of the time, I put it back because I decide that no, I do NOT need it. I've got a closet full of clothes--do I really need more? I'll still pick up something if it's a great deal--I got a pair of Lee jeans that fit me perfectly for $12, for example--but I'm learning to think twice.

If I have a real weakness, it's books and movies. I'm trying to buy used books (unless it's authors that we collect) and cheapo movies. Ken cautioned me the other day about not buying too many movies, and while I didn't like hearing that at the time, he was right. We have so many already that we can watch, and while we'll continue to pick up DVD replacements for our favorites, we have plenty of time to do that, and plenty of things to watch in the meantime.

Credit card debt is a serious trap, people. I once knew someone who put so much on credit cards--a Rolex watch, guns, electronics, Mont Blanc pens, what have you--that he had to declare bankruptcy and ended up in a crummy efficiency basement apartment in a bad area of Indianapolis. What a pathetic loser! This wasn't due to medical bills or unforeseen circumstances--that can happen to anyone and can happen to the best of us--this was nothing but greed and overspending. And you know what? When compulsive shoppers rack up so much debt that they have to declare bankruptcy, who do you think picks up the bill? You and me and everyone else who is responsible with their finances, that's who. That is one of my absolute pet peeves.

Don't fall prey to credit card companies who WANT you to overspend. Be prudent and cautious in your spending and think twice about whether or not you need something or simply want it. The current state of the economy warrants extreme caution--stopping all spending won't do the economy any favors, but take care of yourself and don't overspend. Overspending is what the credit card companies want you to do. You don't see THEM declaring bankruptcy, do you?




buckoclown said...

The cool thing about credit cards is that if you pay them off every month, there is no interest, but you still get points and "stuff".  We have a gas credit card where we get rebates, we have a Upromise card for groceries that puts money away for the kids college, and AMEX for household items and neat items we can get free with points.  The points have been redeemed for a small pool table, a pair of binoculars, and we now have a 125,000 balance - for some golf equipment or workout equipment.  Love those special deals :o)

deshelestraci said...

Poor Ken wouldn't care for me much.  I'm not a hobby of the month person but I do stick with scrapbooking, knitting, spinning.  I have a bunch of stamps for card making.   But I don't spend money on each hobby monthly.  
We don't have any credit cards.  I've been listening to Dave Ramsey for over 10 years now.  He is a wonderful financial counselor who has a national radio show.  

queeniemart said...

I am in Chapter 13 bankruptcy and it is not due to credit cards nor buying too much "stuff". Sometimes a good person gets in over their head, makes a few mistakes, and has to find a way out. In Chapter 13, a person pays back every dime owed. Life can be very rough and many lessons are learned.
I hope Ed McMahon does not lose his home. He has worked his whole life and it saddened me what is happening to him.

jimsulliv3 said...

Nice graphic! Plastic is easily acquired and hard to get rid of. Ofttimes that problem is solved when they take back the card for non-payment. Ed should know better.


pchilcoat1 said...

Great Advice...:)




frankandmary said...

I have a community college degree I got at night while working full time, running a small business & cleaning peoples homes ;-0.  My friends at the time were having a great life, but I was always working, saving & investing money.  Now I have certain things, which I pay in full for, save my house which I bought over time from Dad.  All my working, investing & saving seemed boring to my friends at the time. Worked for me in the long run.  The LONG RUN seems to be the problem for many people.  THEY WANT IT NOW. Now is expensive.  Also a real sense of entitlement comes forth from some who really haven't done all that much to achieve what they say they "should" have.  ~Mary

mpnaz58 said...

I hear you about hobby shopping...seems I've done my fair share.  I have golf clubs (not cheap) and I took golf lessons...I've never been out on the course because I can't hit the ball straight.  We took some stained glass classes, and bought all the equipment (not cheap), and it sits.  Why?  No time.  Scrapbooking stuff galore (not cheap), and I've not scrapbooked a single page!  No time.  Now I just took a class on Photoshop Elements, and note card making.  I haven't purchased anything yet...maybe I've broken the cycle!  Or I'm broke!
xoxo ~Myra

markonit said...

... I wish that I had taken better care of my credit ... when I thought I would just 'fight' my way out of debt and it didn't happen ...

... I got caught up in college ... should have known better ... credit cards are such a trap, and I was trying to be a fianacial anylast ..!  Anywho, now I am a 'do as I say, not as I did' example ...

jmoqueen said...

Interesting entry :)  I steer clear of credit cards.  I'm scared if I had one I would buy so many frivolous purchases.  My ex got me into the mentality that i don't need to buy another dvd etc cos I have so many of them at home that I don't use etc.  Which is good at the mo as the income is rubbish and the bills are expensive
:(  Hey ho!!!