Watch your spending habits; don’t fall in debt

Since I last spoke to students on the value of pinching pennies, an epidemic in our economy has many a person watching their spending. Everyone is on alert, like a new trend; saving money is the new chic.

I’m not surprised by this, it IS cool to recycle, renew and reuse. Whether you got it or not, people everywhere are looking at the value of their dollars and what they can get for it. Any money spent is based on several factors; Do I need it? Is it worth it? Can I get a better deal? Can I borrow it from a friend? Will it hold its value? Is it green-friendly? Can I afford it? Can I do without it? It all comes down to choices.

The New York Times Business Day, April 11, featured the story, “A New Exercise in One-Upmanship: Outsaving the Jones,” by Matt Richtel. In which Richtel, interviews Martha Olney, professor of economics at The University of California, Berkeley. Olney, who studies the Great Depression say’s “the times, implies the re-emergence of thrift as a value.” Shouldn’t it have been all along? It has to me, but for millions of America the last 2 years have been a real wake up call. Our downturned economy has made us take a step back and see the worth in things. Perception has indeed changed for us all.

No longer just the poor college student, the mass population is suffering as consumers and advertisers alike take a bow. Allstate Insurance opened the floodgates using the word “recession” in their now famous commercial and became the first to state the obvious. These days it’s as though every ad on T.V or radio reflects current economic conditions, using words that sympathize with the consumer. Advertisements are reaching out to their patrons with a new understanding that the marketplace must go on. A deeper empathy, expressed in values and deals has replaced the traditional sales pitch. Are you buying it?

Yet other financial institutions seem to thrive on the backs of its creditor’s debt. Debtors like me, who recently went over my limit by less than 5 dollars. My interest rate went from 1.99 to 28.99 percent! At first I was so shocked I couldn’t even respond to it; the fee hikes and over limit fees had me reeling, resulting in me ignoring it altogether to the point the bill itself was late getting paid by 2 days. I finally mustered the courage to call and try to make right the whole incident to no avail. I didn’t receive compassion or any fee reversals nor did they tell me they would reduce the interest. I debated the severe penalty for less than five bucks and how they even let me go over my limit? I wondered out loud, “it isn’t fair!” Is a payment 2 days late really worth a thirty nine dollar charge? I think not.

I watched as my hundred and fifty dollar payment was now almost completely eaten by interest. For 2 months I watched my money get nowhere near my principle. I was sick about it and closed the account. I was late again, this time I was bombarded with phone calls in all totaling about sixty calls in 8 days. I’d had enough and called after letters starting arriving at my house. I was put on what’s called “debt liquidation” with a reasonable monthly payment and an interest rate reduction to twelve percent. I am dealing with where my choices led me, though quite on accident. Students do not make the same mistake. Watch your limits and spending habits. Let this be a warning to you all don’t let it happen to you.

As the current administration continues to look for a balance between creditors and debtors, anyone with bills must pay attention that means you. Congress is in the works to protect consumers in the future, but what of those dealing with huge interest spikes and fees now? The stability of debt is weighed on the judgments it’s given based on its value we have for it. Think before you spend.

This second depression of sorts has us all on our toes wondering how best to manage. The N.Y Times wrote an article about how cool it is to save money and be thrifty because it is. For now, I know I’m adding to that mantra. Whatever you’ve got make the most of it this semester and always.

Remember, “The real winners are not those at the top but those who have come the farthest over the toughest roads. Your victory may never make the headlines. But you will know about it, and that’s what counts.” Ernest Fitzgerald

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Watch your spending habits; don’t fall in debt