Dec 162015

Right now everyone is in full holiday mode.  Running around, shopping at stores, shopping online, getting ready for family visits, parties, decorating, and traveling.  I know, because they are all here on the island screwing up traffic and clogging the store aisles.  It’s hard to avoid the madness.  Stores have been advertising since August.  All the other holidays before hand have just been warmups to the big end of the year events.  By now, with just a week or so to go, holiday revelers are going at fever pitch, and here is where one has to very careful.

Getting caught up in the holiday mindset means making a lot of last minute and spur of the moment decisions.  Finding a special deal on some present, changing last minute travel plans, or dealing with some crisis which may or may not ruin the season unless it gets corrected right now.  And many times, when said decision comes up, the result is spending money one does not have nor can afford.   In other words, accumulating debt to pay for said holiday.

It’s real easy to just blow off the consequences of spending a little extra here and there so one can make the holiday just right.   If it means a certain present is bought, or the decorations get some extra sparkle, or adding some exotic dish to a party is necessary, so be it.  You can deal with the consequences later.  As long as the holiday goes off just perfect.  Trouble is, come the middle of January, another present comes in the mail.  The credit card bill.  And suddenly, the memories of said perfect holiday become faded as one realizes it’s time to pay up.   All the food has been eaten, the decorations are stored away for another year, and the presents which were opened with wide eyed glee are put aside and mostly forgotten.  The realities of overspending and getting caught up in the hype are staring one in the face in the form of 26% interest on money one will never see again.

Folks, if you have been reading the Fritter for any length of time you know my stand on debt.  Namely, don’t have any.  None.  Debt is a killer.  It destroys dreams, lives, and prevents one from having the freedom to make decisions to make one’s life more better.  I know, all too well the dangers of debt and what it can do to a person.  At the turn of the century, the 20th/21st smart ass, I thought I had it all going for me.  A good paying job, a house in the burbs, new motorcycle every year, kayak, satellite dish, even some savings.  But something was wrong.  I always seemed to be owing money to somebody.  A mortgage, bank payments for said motorcycle, and of course, credit card debt, the worst of all.  I sat down one day and did some maths.  I added up all my assets, of which there were many.  Then subtracted all my debts, of which there were also many.  And at the end of the adding and subtracting, had I sold everything I owned except for the clothes on my back, I would still owe a significant amount of money.  And there seemed to be no end.  The mortgage always looked like it went just to interest.  Trading in a motorcycle every year for a new one was cool, but I wasn’t gaining on the loan payments.  And the credit cards sometimes got paid off, but it seemed like I was always using them for something else, especially around the holidays.

The debt was crushing me.  I could not make any major changes to my life.  The job, even though it paid well was not working out.  And I knew it would end soon as the owner of the business was getting ready to retire.  I was over owning the house.  It had become more of nuisance than an asset.  I was tired of dropping money into maintaining it along with the mortgage payments.  And, as for the motorcycles, I was burned out.  It was time to do something drastic and so it was then I discovered minimalism.  Slowly, but surely, I started to downsize.  I got rid of the last of the motorcycles.  Shut down the satellite dish, and began selling off most of the junk I had accumulated over the years.  The more I got rid of, the better it felt.  I already had my eye on moving to the Keys, and eventually it happened.  I was able to down size to a jeep, a sailboat, a computer, some clothes, and a couple of cats.  Gotta have priorities.

Most all of my debt was gone except for the damn credit card.  I used it liberally to make the move to Key Largo, and when I started up the paddle board rental I used the card to finance the business.  Big mistake.  But, fortune favors the foolish, and because of some unusual circumstances, I was able to pay off said credit card right at the time when the credit card company graciously thanked me for 30 years of servitude by doubling my interest rate.  When the balance was paid off, I closed the account and have not had a credit card since.

Now, here I am, 15 years later.  I have little in the way of assets, income has been a problem mainly because I refuse to work with people nor corporations anymore, but at the same time, I have no debt.  Sure I have the usual monthly bills, rent, food, phone, but not much else.  If I added up all my assets and subtracted the debt, which is zero, I now have a positive net worth.  It ain’t much, but it’s positive and significantly more than where I was when I owned all the crap.

It’s a helluva feeling to realize you no longer have crushing debt holding you back from making intelligent and important life decisions.  Income will improve in the coming years, and soon I will have the ability to actually go live in Hawaii, come back here to Key West, sometimes travel to points in between, and not be held down by debt nor possessions.  And I intend to keep it as such.

I’ve been tempted to get another credit card for travel purposes, get a quick flight, rent a car, and things of that sort.  But I remember how tempting it is to use said card for regular purchases.  Use it at the grocery store because I’m a little more hungry than usual.  Grab some bit of clothing or upgrade the computer.  I can always pay off the debt next month, no problem.  But then problems come up.  Something unexpected, or income doesn’t come in as planned.  Suddenly, once again there is debt to be paid.  And there is no running from it.  It has to be paid.  For now, and hopefully permanently, I will not have another credit card.

I know it’s a bit late in the season to be harping on this but it’s never too late to stop spending money you do not have.  It’s okay to buy the presents, decorate, visit friends and family, and travel, as long as you keep within a manageable budget.  It’s not okay to mortgage your future with high interest rates and months or years of making payments on said holiday.  Now is the time to put the credit card away, and not use it again unless it is a real emergency.  And I mean a real emergency, not buying extra gewgaws nor crap in the belief it will make a difference in what kind of holiday one will have.  Don’t buy into the hype of all the advertising just to keep up with some unobtainable dream holiday.  Most likely, even if you spend the money, it won’t be ideal.

I have a family member who does something rather amazing every year.  She starts up an old fashioned xmas club account.  It’s a simple account, gathers virtually no interest where she puts in so much every month.  Come October she has several thousand dollars to spend on the holidays, if she choses to do so.  She knows how much she has to spend, never uses the credit card, and in the end has a very enjoyable holiday season.  And come January, no bills come due.  It’s incredibly simple and easy to do.  All you need to do is apply the discipline to start the account and then pay into it regularly, just as if you were paying a credit card bill, but without the high interest.

Again, and I cannot stress this enough.  Debt is a killer.  It is easy to accumulate, and sometimes impossible to get rid of, much like my ex-girlfriend.  If you have debt now, do everything you can within your means to get rid of it.  The faster the better, especially the credit card debt.  There is no getting out of it either.  If you incur the debt, pay it off.  But the more better solution is to not incur debt.  Those low interest rates, easy payment plans, we finance anybody schemes are there to take all your money.  Do not fall for them.  Pay cash up front.  If you do not have the cash, you go without.  It’s that simple.  No, really, it’s that simple.

Sit down like I did and do an assets vs debts assessment to see where you are.  Do you have a positive or negative net worth?  No matter which, how much debt do you have?  Your priority now?  Get rid of the current debt and do not add any more.  Once you are debt free you will be amazed how much life opens up for you.  Choices which seemed impossible in the past are now available.  As long as you don’t go into debt to obtain said choices.

It’s simple.  It really is.  No debt.

So go out and enjoy the holiday.  Just don’t spend what you don’t have.  Stay within a budget so when the middle of January comes around the mailbox is empty.  It is possible to have a great holiday season without over spending.  If you are over budget, stop right now.  Do not waste another penny until you have your debts under control.  Start an account instead for next year.  Keep a clear head about how much you will or will not spend and stick to it.  Pay cash only or go without.  Trust me, you’ll be glad you did.  And you’ll regret it if you don’t.

Have a safe and debt free holiday everyone.

Capt. Fritter


  2 Responses to “You’re Gonna Regret It…”

  1. It still amazes me that we have a higher net worth now than we did when we were living the American Dream before we discovered minimalism. Yup sold the house and nearly everything in it to move into an RV. Even now that we are back out of the RV we live simply in a rented apartment with DIY furniture from IKEA and are very happy with that.