Monthly Archives: September 2013

Hard Financial Choices in a Difficult Economy

I wish that I didn’t have to sell my structured settlement payment, but at least I can. There are a few wishes that going back in time would have made sense. For a start I wish that high schools would teach some basic personal finance.

At school we are taught the math basics – add, subtract, multiply and divide – percentages and fractions. All very good and needed, but what about the time spent on things like working out areas and things like that – do we ever really need to know the formula for working out the area for a circle? Yes, some people do and go on to advanced math, but personally I think the time could have been better spent on some of the basics like buying a home versus renting and real-world economics.

Credit Card Problems

Credit Card Problems

We could have spent time going over real-world math and economics. For example (and importantly in my case), how to handle consumer debt. Of course my folks didn’t believe in debt, and would not buy anything unless they paid in cash. But they are old and things have changed in today’s modern world. We are the younger generation who ‘get it now and pay later’. So I did, maybe bought a few things that seemed important at the time (clothes, shoes and vacations), and just maxed out my credit cards, all that I could get.

What I didn’t realize at the time was the crazy high interest rate that the banks and credit card companies charge. I’d been listening to the news that said federal funds interest rates were at historic lows and the base lending rate was about zero, thinking that that applied to me. But I’m not a bank, and have recently been looking closer at my monthly credit card statements. Yip, maybe the bank can get loans near zero percent, but my rates are nearer 30% – no wonder credit card companies spend so much on advertising, they are making a fortune from people like me.

So I cut right back on my spending, and found out that even if I didn’t spend anything that month, the credit card balance kept going up, because the interest rate is so high my debt keeps increasing. The credit card companies keep increasing my credit limit, and the debt keeps climbing. So it seems like I am in a never ending increasing debt spiral. Getting a good job in this economy is hard, and currently I am working two jobs to try and make ends meet, which is really hard. Working and working just to give the paychecks right over to somebody else.

Luckily (I say luckily, but I have been in an accident a few years ago, which was not good luck), I have monthly payments of $1,300 coming in like clockwork from an insurance company after the settlement. However it goes straight out again on the debt repayments. So what I plan to do is sell my structured settlement payment and use the lump sum to pay down or pay off this consumer debt, so I can get my life back on track financially again.