With a New Year often come lots of changes. I’m looking forward to 2012 and what it may bring, not just for me, but many people who have struggled the last several years to get their financial life together.
But, with much regret, I will no longer be writing this column. I selected the title “A Wealth of Knowledge” because I believe that it takes so much effort to shield yourself in this economy. As Benjamin Franklin said: “An investment in knowledge pays the best interest.”
For the last several years, I’ve answered your basic personal finance questions every week. My hope was to help put you on the road to wealth. My first column started with an elderly couple that was taken advantage of when they purchased a home without getting a home inspection. The home turned out to need a lot of repairs that would have been discovered during an inspection. “We trusted our real estate agent, who advised that a home inspection was not necessary,” the couple wrote.
Over the years, I received many such letters from people who trusted a company or professional to do the right thing. But, as I told the elderly couple, when Ronald Reagan was negotiating with the Soviets, he famously said: “Trust, but verify.” There are good and fair people out there to help you with your financial situations. Still, you have to verify what you’re being told.
By far, the bulk of the questions were about debt. This question from 2009 was typical of the mail I received: “I lost a job that paid $73,000. I have done everything I can to find any other job, but at 53 and due to the current economy, I have been unable to find work. I have past due medical bills that are being garnished from the second job that I have always had (thank God!). My wife has gone from a domestic engineer to working at a low-paying job at a start-up business. Our vehicle was repossessed, and we still owe $10,000 on it. There is credit card and tax debt. We are hounded by the same companies that Congress bailed out. Before the loss of my income, we were in the process of paying down our debt. I don’t know what to do. Help, I’m drowning.”
Such cries for help continue. I’m so saddened by the level of debt that is still crushing so many families. But, debt is coming down. The Federal Reserve Bank of New York said that overall consumer debt dropped about $60 billion, to $11.66 trillion, in the third quarter.
I was grateful when I received feedback such as this note from a mother of four from Minnesota: “Thank you for providing the great resources, especially the budget planning and expense tracking information. Reading your column has helped me plan better for my future. I am saving and can see a brighter future, including being debt free. Keep up the great work.”
As I wrote to that mother, I understand the pull to live above your means. We are a debtor’s nation. Our government is in debt. Corporate America is still limping along in debt. It becomes easy to think debt is, and always has to be, part of your past and future.
But, it doesn’t have to be.
You can buy a car for cash and not get into auto debt.
You can use a credit card and pay it off the next month without rolling over debt for things you probably can’t even recall you purchased a month later.
You can go to college without student loans. It will be tough. You may have to live at home and stay in state, but it can be done.
And, you can pay off your home before they bury you six feet under.
Times are still hard and probably will still be rough in 2012. But, never give up hope. Save more. Spend less. Stay out of debt or resolve this year to get out of debt. All of this is possible with the right information.
Ultimately, I hope I left with you a legacy of knowledge to live the financial life you deserve.