Greetings Gentle Reader,

Considering the financial news of the day, this might be a good times to discuss finances: We have been reminded on a regular basis that there always have been, and there always will be, tricky times in the financial world. The ticket for us is to be prepared. Unfortunately, that can be more easily said than done.

A good man of my acquaintance said that he had put himself through college by being a janitor, and now, he was putting his children through college by, once again, being a janitor. That dear man always had at least as many expenses as he had money. He will probably never become rich, but he has always had enough for his and his family’s needs. Such people learn to be frugal, and that frugality stands them in good stead, when the financial world gets the hiccups.

So, how about the rest of us? Have we learned to keep ourselves out of financial deep water, or do we tell ourselves (regularly and often) that it will be okay. After all, we know how to swim.
The one thing we may have forgotten to tell ourselves is the unpleasant fact that financial deep water tends to be full of sharks, and sharks really like naive swimmers. They make a tasty tidbit, and few of them have the financial expertise to recognize a shark, especially if he has a sufficiently charming smile, and a genteel manner.

Many sharks have promoted types of mortgages that are close to impossible to repay. Others are true professionals at convincing couples, especially young couples, that they really need new furniture. It’s not simply that they want it, but they truly need it.

Once upon a time, a friend told me their neighborhood had become so dangerous, with regular home invasions and the like, that they had sold their house and moved to a safe neighborhood. Unfortunately, the deteriorating circumstances in their original neighborhood had caused property values to drop, so they didn’t have enough money to buy their new house outright. That was unfortunate, but they compounded the problem by convincing themselves that their nice, new house needed nice, new furniture.

As a result they ended up with such an increase in expense that they continually struggled to avoid financial ruin. All other expenses were cut to a bare minimum, and still, they barely made it from month to month.

The temptation to declare bankruptcy is ever present, but it should only be indulged in the most extreme circumstances. A loss of employment can create conditions of dire poverty, as can catastrophic illness, but it is imperative that we avoid declaring bankruptcy, unless all else fails. The most important element in avoiding bankruptcy is a determination not to spend more money than we have. If we have ten dollars, never spend more than eight.

In today’s America, luxuries have become necessities, so we are going to have to retreat to the values of our parents and grandparents. They were pretty simple: If we can’t pay cash, we can’t afford it.

That may seem too simplistic, but it actually works, and nothing else does.

Until next time,
Muriel Sluyter

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