Yes, times are tough: people are upside down on their mortgages or even going through the foreclosure process, the banking industry is in turmoil, retail stores are closing at a record pace, jobs are being lost. It is certainly difficult to imagine that all of these events are happening all at the same time, but things happen that are beyond our control. Now, we have all these people across the country taking all this time to protest against the 1%, corporate greed, taxes, and other “important” issues. Everywhere you turn people are crying for help, and pointing fingers everywhere except for where they should be pointed. Here is a novel idea, though: take a good long look in the mirror and see who is truly to blame for you own personal situation: you!
For years, people have been worried about keeping up with the “Jonses”: their neighbors, family, friends, emulating what they see on entertainment tv programs. They go out and purchase cars and houses that consume most of their take-home pay just to say that they drive this car or that car, or so they can say that they live in this zip code or that city. They struggle to live paycheck-to-paycheck using almost every last cent to pay for the luxuries that they thought would bring them status, but only drive them deeper into debt. Did they not think that one day this would all catch up to them?
For years the national savings rate was at historically low levels under 1%. A majority of the country wasn’t concerned with saving, just outspending and upstaging the next person. Savings accounts? Emergency funds? Retirement savings? Most reports concluded all of those things were virtually non-existent. What happened once the ARMs started adjusting upward? Foreclosures increased. Defaults increased. Banks, which are not in the business of selling real estate are seeing their risky lending practices come back and bite them in the rear. Then the layoffs come, and there is no savings account, no emergency fund. What do people do? What else, blame everyone possible without taking personal responsibility for their own actions and decisions.
It’s really quite simple:
- House in foreclosure? Blame the bank for giving you a mortgage that you swore you could afford
- Gas prices too high? Blame the oil and car companies for colluding to trap people into a dependence on both
- Car being repossessed? Again, blame the bank
- Job loss with no money in the bank? Blame the employer for making a rational business decision
- Credit cards maxed out? Blame the bank yet again for giving you a line of credit that you couldn’t use responsibly or society for making it so easy to spend.
- Credit rating in the toilet? Blame everyone else for expecting you to pay your bills on time and the credit agencies for calculating credit scores the way they do.
Sometimes, people need a good slap in the face to wake them up to the fact that they are responsible for each of these situations. It’s not the banks who extended the line of credit. It’s not society (totally) for making you feel that you needed to keep up with those who actually have the means to afford their lifestyles. It’s not the former employer that had to let you go in order for the business to survive. Ultimately you are responsible for where you are right now. You decided to buy rather than rent even though you knew you couldn’t afford it. It was you who purchased a luxury car versus the affordable sedan even though the payments, insurance, and fuel costs would be stretching your budget. You are the one who made the decision to spend your bonus and/or raise rather than fund your retirement account, savings account, or emergency fund. It is all on you for living above your means, and you have no one but the person looking back at you in the mirror for where you are at this very minute.
Obviously this is not the same for everyone, but for the great many people who brought their current money woes upon themselves, this presents an excellent opportunity to learn something about yourselves and about money. Look back to see how you got to this point. See what you could have done differently, perhaps sought out a financial advisor, or read a book on money management. Sit down and make a plan, outline your priorities, just do something to come out of this situation a more informed, more responsible consumer.