Over the next week or two many people, especially those who don’t follow this here fine blog, will be getting either a letter in the mail or an email in their inbox. The message contained in the letter or email will be a reminder of just how little freedom and control they have lost over their lives. And it will be because of their own actions. This notice will be the first, and in many sad cases, not the last, of the bills for all the holiday spending, otherwise known as the credit card bills. All the gifts, all the decorations, all the waffle makers and xmas pickles, all that stuff that seemed so important to have a month ago? The bill for all that is now coming due. With interest. Extremely high interest.
Hopefully, you heeded the advice that many like myself have been promoting over the past year and either curbed your spending or kept it all with in limits. You paid cash for everything. You downsized. Or, at least, had the money available for this occasion to zero out the card and move on. But if not, and I suspect there are a lot of you out there who did not, it’s going to be a long cold winter with 25% interest to boot. I can’t offer any solace if you are in this predicament. You rang up the debt. You have to pay it off. No matter how painful, expensive, or long it takes. I’m not going to tell you how to handle the next round of holidays or what to do next year. If you’re looking at a big credit card bill now and no means pay it off, then you are learning a hard lesson in living within your means. And Darwin knows, I have a PHD in those lessons myself. All I can tell you is to do what I and many others have had to do. Suck it up, pay it off, and never do it again.
If you are looking for some inspiration or an example of how to live a minimalist debt free life look no further than our own Federal Government. Currently, as of this posting, the United States Federal Government has accumulated a national debt in excess of $15.3 trillion dollars. And it’s growing fast. The current Gross Domestic Product of the U.S. is around $15 Trillion. That means that if you took all the money, goods, and services produced in this country it would not be enough to cover the national debt. Estimates by the way have the debt well over $20 Trillion in a couple of year. The GDP, not so much. If you want a good example on how to live a lean, debt free, minimalist life, simply do the opposite of the Federal Government or any government for that matter. Don’t spend more than you take in and quit borrowing money. Simple. Or so you would think. Want an example a little closer to your own reality?
11 years ago I owned two properties, a truck, a motorcycle, furniture, computer, satellite tv, appliances, kayak, an IRA, and $40,000 a year income. My net worth after adding up all my assets and subtracting all my debts including mortgages and credit card balances…-$20,000, plus interest. If I sold off everything and even got a decent price for all my possessions, I would still owe $20,000. Today? All my possessions would fit in a backpack. I have nearly no money in the bank and my income is, well, fluctuating towards the downside at the moment. My current net worth? $1,000, give or take a few bucks depending on what I could get for the two cats on the open market. (The used cat market is a bit soft right now.). Would you consider me to be richer or poorer than I was 11 years ago?
The point I’m trying to make here is that you can’t spend your way into wealth. All that borrowing for all that stuff accomplished nothing more than a few moments of pleasure. Now that the bill is coming due, with interest, many of you’ll be stressing and losing sleep over how to pay it off. My own little personal experience is a perfect example of what we minimalists mean when we say less is more. (And despite my lack of current income, I sleep pretty damn good at night compared to 11 years ago.)
There’s nothing we can do about the Federal Debt. The government will continue to spend to buy power and votes. None of the candidates, including the incumbent, are going to stop spending and eventually it will all come around and bite us in the ass. The only thing we can do is each take care of our own house. Eliminate the personal debt, don’t borrow money, and live within our means. I know, you probably get tired of hearing me rant on the debt thing. Well, tough shit. If you are here to read about a minimalist lifestyle I’ll repeat my mantra again for you.
Start by eliminating all debt.
Go take another look at that credit card bill. Hurts don’t it? Here’s a tip: take a picture of that bill. Crop out the personal stuff like your account number, etc. leaving the balance due and interest figure on the image. Save that photo as a wallpaper or screen saver on your computer, iPad, or smartphone. Now, every time you turn that device on you’ll be reminded of what happened. And hopefully, when the next round of holidays comes, or you get the urge to charge it, you’ll remember and chose wisely. You do have the power to eliminate that debt and take control of your life. Now would be a good time to start.