Cash Or Credit

Despite the government giving so much free money to banks many individuals' lines of credit are drying up. People are genuinely surprised to learn that a lender has reduced or even eliminated their source of credit. Equity lines are frozen for some while others learn too late that their AMEX card has been cancelled without their knowledge.

Banks and mortgage lenders are scared. The economy affects us all. Even when an institution has money they tighten their belts as we consumers tend to do. In tough economic times one cannot count on sources of income or credit that had been previously available. These are times when discretionary spending must be reigned in.

Suggestions that one eliminates their daily latte or start to carpool have become trite. Simply staying employed is enough of a challenge. We have gotten so used to credit being the same as cash that we, as a nation, have truly hurt ourselves. Our notions of what a dollar buys have become skewed. God forbid we save that dollar rather than spending it.

I have had a wake up call when it comes to my own finances. Each year my wife and I take a vacation to Toronto where we inevitably spend thousands of dollars. This year we have so many credit card bills to pay that we must spend our vacation at home. It will only cost about a grand but we will still have fun and not get into further debt.

We must all start to think in terms of cash only. Money should be spent only when it has to be and only after spending time thinking about whether it is a need or a want. Credit should not be in the picture. Checking account debit cards with the Visa or Mastercard logo would be best for purchases or payments. Saving for the future while lowering debt must also be made priorities. Frugality is not an easy mindset to develop. It is a mindset that can only lead to financial security and prosperity. Anything less is the path that leads to eventual ruin; for us and for our nation.