Kenmore Undressed

Mr. Freeze, The Financial Curmudgeon - America’s Social Disease

 

The Financial Curmudgeon was listening to the “financial experts” talking last week about all of the bank failures, the volatile Stock Market and a myriad of other problems facing the average American family. Indeed, we are living in challenging times. It reminds me of Venice in the 16th & 17th Centuries. At that time Venice experienced an utter collapse of its world trade domination as the  New World began to transform world markets. The Venetians became complacent and so have we.  

Dan Catts, a contributor to flickr.com, provided this picture of an original mortgage. He writes: “When we moved into the house we found a box with a whole bunch of documents in. Someone else has numbered them all and unfortunately number 2 is the earliest one we have.”

In today’s world of electronic documents, faxes, pdf files, email, etc., we don’t often reflect on the fact that there are actual documents backing up financial transactions. These documents represent promises and obligations to pay someone back. It’s almost as if we’ve forgotten that these papers have tangible meaning and NOT paying them back results in consequences. Yes, Virginia, there really is a debt out there! I don’t know about you, but the current mortgage/credit crisis is but a reflection of how reckless borrowers (AND LENDERS) have become regarding lending and taking on debt. To me, it’s a a sort of social disease here in America: purchasing too many things without having the money in the bank to pay for them; believing that somehow one doesn’t need an adequate income to qualify for a loan; never saving for a rainy day; carrying 5 or more credit cards with huge balances and wondering why they can’t ”get ahead.” The largest and most destructive symptom of this disease is our belief that the world is going to stop so we can get off. In the long term, Venice never recovered from the huge economic shifts that occurred and I have a sense that Americans are going to experience a decline in their standard of living, perhaps not as dramatic as Venice, but changes nevertheless.

So here’s what Mr. Freeze, the Financial Curmudgeon, suggests: Take a deep breath, pull out all your debt “documents” (credit card contracts, mortgage, bills, everything) and start pondering just how many people you owe. Then make a plan to eliminate as many of these debts as possible. Mr. Freeze has a simple way to start: buy yourself a little notebook and start writing down every single penny you spend every day for 1 month. By doing this you’ll discover exactly what all your unnecessary purchases are (YES, YOU HAVE THEM). Isolate those monies and start paying off your bills. Mr. Freeze, the Financial Curmudgeon promises to have more tips in the near future.