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Wednesday, October 15, 2008

Thanks Mom and Dad!

I guess it all depends on how you were raised and the mentality of the era in which you were brought up. I look at the people going "belly up" these days with the bad economy and my first thought is about how easy it would have been for them to avoid such travail if they employed some common sense. I wonder if common sense is even part of their vocabulary.

My parents were in their mid to late thirties when I was born and I used to lament the fact that they were older and a bit less vibrant than the parents of my friends. As time passed, I changed my mind as I realized they instilled some old fashioned values in me that have lasted a lifetime.

For example, I was taught never to let impulse take the place of good sense. I think of that these days when I see the foreclosures happening around me on homes in supposedly upscale north Scottsdale. Young families have gotten into unmanageable loans on homes and cars and are losing it all. When I was their age, I would never have considered the debt burden they have assumed. I was married five years before I thought of buying a home. When I did buy in the early 1970s, I had a payment of $220 per month on a 30 year loan. Before we signed up for that kind of debt, my wife and I put a lot of pencils to paper to be sure we could handle it. We also did something that seems unheard of these days: We SAVED our money to apply a nice down payment on our house.

Today, we are inundated by ads on TV and the newspaper to "Buy now, no money down, no interest payments until 2010!" Then there are the ads for the suckers who got overextended on credit cards to go to a service where they will "cut your credit card payment in half and get those pesky creditors off your back." Guess what? There will still be a payday on that stuff. The 70s may have been the "me generation" but today is the "I have to have it NOW generation" and many are paying the price for bad credit decisions on silly material items.

It doesn’t seem fair. I have always used common sense in my financial dealings but because others haven’t and lenders have been foolish, I now have to pay the price for their mistakes by having my investments drop in value. However, I do have an ace in the hole. My house, cars, and everything I own are long ago paid for. I will never be involved in a foreclosure and I thank my parents for teaching me the value of living within my means.

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