Always Real, Money

Antique Mommy’s Bail Out Plan – Step Three

Step 3 – This is where it gets complicated.

We need to look long term for solutions to this crisis, beyond this current financial cycle, beyond the bears and bulls and far into the future.  This is a many-faceted problem.  One legislative act, one plan, one bail out is not a real solution.

I think we all recognize that we are a nation of consumer gluttons. Our appetite for consumables is insatiable.  We gorge ourselves on product and purchase, always shopping and shopping, never satisfied, never really enjoying anything for very long. All we can think about is what are we going to buy next?  We gulp it down and look for the next thing to purchase. It is a joyless, empty cycle. And it is killing us.

Add to that scenario that money is an emotionally ridden issue and that so many of us don’t understand beans about financial management and you’ve got a recipe for a very toxic stew.

What Can Government Do?

A few things come to mind, but I would love to add your ideas to the list.

Heads must roll. Consequences must be paid by those who participated and profited in this financial train wreck. Heads must roll and psychologically, Americans needs to see heads roll.

No pork please. The Bail Out Bill needs to be a single issue bill. Nothing unrelated to the bail out should be in this bill. No pork please.

The deplorable practices of the credit cards companies need to be illegal. Every week I get blank checks from my credit card company.  I immediately feed them to my shredder.  I resent that I have to own a shredder. I do not like having to worry about what happens to my blank checks when the mailman has a bad day and puts them in the wrong mailbox.

Yesterday I got an email from a reader saying that several times a week her three-year-old gets a credit card application.  Another reader said her son at college is beset with credit card applications.  Mailing out unsolicited credit card applications contributes to identity theft and other abuses of credit.   It’s reckless and it’s irresponsible and it needs to stop. In order to get a credit card, one should have to present oneself in person at the bank.  Period.  You can go here to alert your senator to this issue.

Pro Bono. I think there is a segment of the population who needs a little help getting a mortgage. As doctors and lawyers and all professionals do, the mortgage industry needs to do a percentage of pro bono work in helping these people get suitable mortgages. If there had been no profit in providing people mortgages they couldn’t afford, we wouldn’t be in this mess.

What Can You Do?

Take personal responsibility.  Learn to manage your money and live within your income. My husband is amused that I of all people would be writing a post about finances.  The truth is I hate thinking about money, it bores me to tears, but it has to be done.  Antique Daddy does the bulk of our money management, but I keep up with it too because it is my obligation and responsibility as a partner in my marriage.  It is unwise for women to abdicate their financial responsibility to their husbands and it is wrong not to share in the burden. Women need to have a hand in and be aware of the family finances.

Don’t revolve credit, never ever. Credit cards are a great financial tool if you pay them off in full at the end of every month. If you can’t do that, cut up your credit cards because you shouldn’t have them.

Don’t buy a new car. This one kills me because Good Gravy! – I love me some new car smel!  It’s a concession I have made to my uber-financially responsible husband. I have not had a new car since the year before I met him. To be sure, I have a nice car and a car I love and a car that is paid for.  It’s just not new or anywhere near new, but it’s a small price to pay for the financial security that I enjoy.

Work towards having a years worth of income in savings.  I’ve heard  some say 4-6 months is enough, but trust me, in this economic clime, a year is better.

Save something for retirement every month. You cannot start too young.  Even if you are only 20-years-old you are not too young to start saving for retirement.

Teach your children about money every day in some way. There are many many ways to do this.

Several readers asked what I think about allowances.  Certainly allowances are one way to teach financial responsibility and a noble work ethic, but I don’t think it’s the only way.  I think each family needs to figure out what works for them.

I prefer to “hire” Sean for certain jobs, which he can either accept or decline, which gives him a little power.  Or if he wants something in particular, he can ask me if I have any work he can do to earn whatever it is that he wants. That works better for us than an allowance at this point.

If you are going to do an allowance, you have to be consistent and stay on top of it for it to be effective.  I don’t want to be a supervisor and have to keep up with what work has been done or not done because I would end up doling out money when no work was done and then it becomes an entitlement and that defeats the whole purpose of earning money.  If you like charts and you can stay on top of it, the allowance system is great.

Be different!  Opt out of the culture of consumerism! Be the weirdo in the neighborhood who refuses to participate in the keeping up game. It’s fun!

* * * * *

Check out these sites written by people smarter than me about this kind of stuff:

Dave Ramsey – His bail out plan is a little more detailed and thought through than mine.  Dave’s got no fancy financial secrets or investment methods, just good common sense – my kinda guy.

I also like Suze Orman too because she’s plain spoken and direct and passionate about money management!

Several readers said ING Direct was a great site for helping kids learn about finances.

38 thoughts on “Antique Mommy’s Bail Out Plan – Step Three

  1. umm….Antique Mommy for President? 😉

    It’s extremely frustrating to me to be one of the people who was responsible, have paid our dues (and bills for that matter), worked the system as it exists (you know taken out just enough credit to have good credit), put our money away, invested like we’re supposed to and NOW, well right now I’m pretty sure we’re not retiring EVER and the girls need to be on full scholarships for college. We live in a dream neighborhood and what would be a very expensive house in most places, but just middle class for here.
    So far our home hasn’t lost value, but if it does, how is that right? We worked hard to get here, but somehow my house (and retirement fund) value is suddenly gone because someone else was greedy?

    And, I can’t even get to the part where my KIDS have to pay for it???? I agree we need to do something so the economy as a whole doesn’t tank, but I also REALLY agree w/the trading/selling assets for jail time. That’s a stimulus package I can get behind.

  2. oh, we have a “marble economy” in our house. Even the 2YO is learning about earning. Once they earn a certain amount they can redeem for things they want or can save up for bigger things. I helped them create the lists & then we attached values to them. Hubby wants to start taking away for negative behavior, but I think it’s more effective as positive only. So far, it’s eliminated a lot of tantrums and the beds are made, dishes are clears and playrooms are picked up a lot more these days.

  3. Living within one’s means and not keeping up with the Joneses…that is going to take time. That’s not just about wanting wanting wanting, but, some lack of self esteem and confidence I think. It’s such a 30’s game. By the time people reach 40 some get over it and become more genuine, but not all.

  4. Ah, the consumerism and entitlement, how to retrain people on that?

    There are trailer parks around here where the families can’t even afford a decent home, but they GOTTA have their shiny trucks with giant tires and roll bars, their ipods and cell phones, their Dish network, their big screen TVs, their cruises.
    We don’t have any of those things, and I buy my clothes at rummage sales and the Salvation Army, but we do have a good, almost paid-off house in a good neighborhood on 2 acres of land.
    We see it as some case of skewed priorities with a lot of people, fueled by the whole consumerism/entitlement thing, and media advertising. Ack, it’s a peeve of mine.

  5. I’m with you. When the lease was up on my van (we swore never a lease again.) we paid cash we had been saving for another car (used) and I got Terry’s old accord. Still very nice, although it was nicer before the kids and I got hold of it.

    We are debt free spare one card we used on vacation this past summer. But it gets a big chunk taken out every month.

    Great post! Hope more people will get out of the culture we’re in and learn its ok to not have something! Or even a lot of somethings.

  6. No pork would be a dream. And it’s sick to see the people who voted “no” before taking a 2nd look because there IS pork in the 2nd version.

    Like that makes it more palatable. You don’t want us to spend $700 billion? hey, how about MORE.

    Something just seems very wrong about this whole idea.

    Re: allowances. We give our elder children a small allowance every week. They help with chores, but it’s not tied to the chores. I get a bit of spending money each week too – and I save it for whatever. I love having something that isn’t marked for a set category already. But this allowance isn’t for teaching them about working (though they can do certain jobs in the house for money, and Mac already does babysitting jobs at church) – it’s more about savings/planning what you spend. I don’t buy impulse stuff for them anymore – they can buy it themselves if it’s so important. Amazingly, now it’s “their” money, they are less likely to want things enough to buy them!

  7. Aw, thanks Antique Mommy!

    Sorry to get preachy here, but it needs to be said: In spite of the current situation, Americans have a lot to be thankful for. Even our poorest are better off than the majority of the world. Shucks, even our HOMELESS are usually better off–most of them at least have the option of shelter and food if they want it, and that shelter usually nicer than, say, a grass hut or a ram-shackle place put together from pieces of trash from the dump, as millions around the world live.

    What’s going on is frustrating, for sure, but I think it’s important to have perspective. Attitude is everything when you’re trying to pull yourself out of a pit.

  8. Okay, I thought I commented here. pardon me if two comments show up!

    I am not sure that the bailout is the best option for us, but it does seem to be going through. I wish I had a better answer (if someone would listen to me!). I am a bit sickened by the way that they’re pushing it through – oh, you didn’t like $700B? Let’s add something here and there, and now it costs more…


    Allowances: We give one that isn’t tied to the chores (though chores are expected). It’s in the budget – everyone gets an allowance every week. Even the parents get an “allowance” – or spending money – to save or spend as we choose, without having it under one of the categories. I guess ours is not a lesson about working for money – that lesson comes in other ways – but it is a lesson about savings/spending/making choices. It’s amazing how those impulse buys are less and less because it’s THEIR money they have to spend.

  9. Palin talked about personal responsibility last night, along with smacking the predatory lenders. I think personal responsibility is so much harder to swallow, because the onus is on us, not the “big bad corporations”
    or something.

    This all is nothing new. It reminds me of the stories about the beginning of the 20th C., the “company store” where people could buy things on credit, especially in farming and mining communities, but it just put them more and more in debt to the owners. And when the poor schlocks tried to move, they realized they owed more to the company store than they could ever pay. Just another word for indentured servant. I don’t know what happened to that scenario…but I think credit cards are just the natural outgrowth of the same issue.

  10. One thing that has help us be able to put more money in savings each month is that we cut up our credit cards. Even though we paid them in full every month, we found ourselves spending more on credit than if we had to pay cash or deduct it immediately from our checking acct. This one change has made a tremendous difference in our savings.

  11. Thanks for laying it out there and saying the tuff things. We ALL are responsible you are SO right! We are a nation of spend thrifts! And I might add it is one of the top reasons for divorce…..lack of discipline in spending. It dissolves marriages, families, and nations!

  12. Sorry Jeana, but I respectfully disagree with your point – not completely, but partially, because I’m older and my perspective and situation is different. I think when you’ve lost what you’ve got through your own bad management, then yeah, don’t whine, I don’t want to hear it.

    But when you’ve worked all your life and played by the rules and you lose what you’ve earned through no fault of your own and someone else walks away with your wealth (with a golden parachute), then I think you are entitled to whine. Let’s say you are mid-50s and nearing retirement and have no way to recover and all you’ve worked your entire life is gone, are you just supposed to say Oh well, I’ll get me a nice shelter.

    Somebody needs to whine loud and clear so this doesn’t happen again. A nation of Baby Boomers have lost their pensions and retirement, not just homes. Trust me, this is going to get bad.

  13. Girl! Can I volunteer to be your running mate? You are SINGING my song!! Just one question — why, why, WHY are the “greedy bankers” to blame for our current crisis, as well as the housing problems of earlier this year, when we give the “poor, pathetic mortgage holders” a total pass when they took out a mortgage on a house THEY COULDN’T AFFORd???

    Live within your means. Doin’ it. Hate it. BUT, Dave Ramsey says, “Live like no one else so that later you can live like no one else.” It’s true — and, I’m in my 30’s! (marathonmom mentioned folks in their 30’s had to keep up with the Joneses). The school my children attend gives plenty of opportunity for a never-ending quest for things and greed. I refuse to play along.

    AM — you totally have my vote!

  14. Sorry, I’ll try to be more clear:

    The financial institutions behaved like scoundrels, as did the congressmen who passed the laws enabling them to do so (in exchange for hefty donations, of course). I think there should be hefty penalties, and these people should be out of a job, no question. Demanding accountability and the assurance that this will not be allowed is not what I would call whining–I completely agree with all 3 parts of your plan.

    But after we’ve fought the battle and we’re facing our personal losses, I think it’s important to keep a clear perspective, and remember just how good we have it–all of us Americans–compared to the majority of the people in the world.

    Let the unfairness of it all inspire us to fight for better laws for ourselves and our children, and to put more effort into improving our own personal situation. But whining and complaining, by themselves, don’t accomplish anything and only makes the situation seem worse. There is great power in choosing to be grateful, even when being treated unfairly. ESPECIALLY when being treated unfairly.

  15. Bravo AM!!! Bravo!!!

    I am finally debt free and when I use my credit cards I pay them off in full by month end.

    I will need a car soon and I will not by new. My son found a great used car for a fantastic price. He is thrilled with it. We do not need as much as we think we need.

  16. Another resource that I absolutely love is Mary Hunt’s daily Debt-Proof Living email tips and ideas. Her site is here and she has a wealth of valuable resources and ideas.

    I’m working hard to eliminate the insane excess in our home. We also just went from a 2200 sq ft house to a 1600 sq ft home. I’m tired of the stuff. And I certainly don’t want to add more to it. I’d rather see the green stay in our account.

    Great series, AM! 😀

  17. Amen, amen and amen!
    I’ve been branded “cruel” and “elitist” for saying that not everyone should own a home. Not everyone has the financial maturity to understand that the mortgage companies will put you in a bigger home than you can afford and you will spend the rest of your life trying to dig out of that hole. My husband and I bought a lot LESS house than we were advised we could afford. We’re sure glad now, after the market has tanked!

    Like you, I have not had a new car since my husband and I started dating. I drive the 1999 Jeep I bought new in ’99 and keep it well maintained so it will last a long time! We carry no debt other than our mortgage, and we have paid $50,000 on that in just under 5 years!

    Our government has encouraged people without financial savvy to get into debt with the idea that Uncle Sam will always be there to fall back on. That’s stupid, foolish and dangerous and WE need to stop it!

    Thanks for such a brilliant series of posts! I read your blog daily and have always enjoyed it, but this is the first time I’ve felt compelled to comment. You hit this one right on the head, AM!

    If only we could get people to listen (especially the ones heading to the polls looking for more handouts!).

  18. Great Blog! Ever consider a life in politics?

    I always wonder why I get credit card offers when I don’t have a job. It makes ZERO sense to me, but hey, what do I know?

    Not keeping up with the neighbors…how shocking! Just kidding. I live in the land of “keeping up”. It’s the culture here on Long Island and it’s driving me INSANE…I know it’s not a long drive. I’m glad you mentioned this one small fact…for a moment, I thought I was the only one sitting out of this game.

    Thanks for a great post. By the way, it’s my first time visiting, but I’ll be back.

  19. We have become a nation of more, more, more. We have super sized in every area of our life, and are now paying the price. We cannot eat giant portions, drive giant cars, live in giant houses, carry giant credit card debt and not suffer the consequences.

    The piper has played my friends and needs payment. I hope this is a cleansing time for our nation, and we readjust our mentality. We have confused wants and needs. Hopefully, frugal will become the new chic.

  20. Wow!! Can we forward a copy of your last 3 blog posts to CNN and Fox News? You are saying everything that we are trying get thru to our kids and our parents have taught us for years.

    Grace and I went to a craft fair the other day. She had 10 dollars. She wanted 3 things…her total was going to be $14. She came home with 2 things because her mommy wouldn’t loan her money and give her a line of credit. Gotta start somewhere!!

    I wrote my senators for the first time this past week. Dave Ramsey got to me and I was on fire! I think that these rich law makers and their lobbyists should go, too!!

  21. I dont think its fair to blame the entire mortgage crisis on any one thing. Yes there are people who were put into mortgages for houses they couldnt afford, but there are several other things to consider as well.

    5 years ago when we bought our house our mortgage was 635 a month. our monthly bills for gas/food were around 800 a month. now our mortgage is 695 a month(escrow changes not interest) and our monthly gas/food has gone up to about well lets see our GAS costs alone have gone up to around 1000 a month and thats not even getting to the food…
    our electric bills have gone from an average of 60 a month to an avg of 120 a month….
    we just happen to be very lucky in that even though our bills have more than doubled in a lot of cases because of my husband changing jobs our income has tripled.
    we carry no other debt but our house
    the cars are both paid for his is a 98 and mine is an 03, the thought of a new car though intoxicating for a moment or two is not even a remote possibility for at least three more years when we plan to have most of the house paid off….(we are making 2 payments a month so one goes to principal alone)
    but i dont know how people in most industries make it, there are so many layoffs and hiring freezes in place.
    we live in a rural area that is somewhat economically deprived in the first place and really cannot seem to get much worse except that groceries and gas are starting to kill everyone around here. its pitiful to find that my kids are two of the total 5% in their school district….not just their school their district who do not qualify for reduced/free lunches @ school.
    considering the entire district is about 900 students that means mine are two out of 45 who pay full price for their meals.
    there are a lot of people I know who are having to choose between putting the gas in their car to go to work or food for their families and in one case i know the mom quit her job to stay home because if she did they could qualify for food stamps and that gave them greater benefit than the 200 a week she was earning that was paying for mostly gas.

    more economic cars you suggest? well gee to do that most of us would have to replace them out here every year or so because the roads suck so badly that it would tear them up its why we do drive trucks and suv’s… it is my van is still really too low and we spend more $$ replacing tires and an A/C wire that hangs down than should ever be considered reasonable…

    a friend of ours had a reasonable mortgage…20 years 800 amonth, not bad…her bank sold out the new bank raised her payment to 1200 a month…they have 6 years left on the mortgage and are being harrassed by the bank to pay it off sooner. they are not behind, they are living paycheck to paycheck but not behind…
    it is not only people who took loans for more than they can afford it is going to affect EVERYONE and its not fair to paint all with that brush.

  22. I’m one whose 401K has tanked. I’ll never get it back. I guess i’ll just keep working and hope i don’t get too old or sick (or that I dies with my boots on!). Just think, what if they had been able to privatize social security?

    If you want to get off the credit card (and junk mail)lists, go to You can get off many mailing lists there, and print out the letters for the ones that insist on hard copy (they do that to make you have to work harder to get off the lists).

    It has to be done over and over again because the next time you buy somehting from a catalog retailer, your name is sold again. But it’s better than nothing

  23. Thanks for the advice. I’m just learning all of this stuff, as I’m in the (real) workforce for the first time. I did start saving for my retirement… I guess 22 is a good age for that!

  24. It’s such a bummer that “pork” is muddied with this negative political meaning [it’s not your fault!]

    Pork is so tasty, and I hate to think of it in a negative way.

  25. Great post. It’s so easy to get caught up in new cars, etc. I actually prefer to buy used. I hate to be the one to take the hit on a car..

  26. Love this one, especially: “Be different! Opt out of the culture of consumerism! Be the weirdo in the neighborhood who refuses to participate in the keeping up game. It’s fun!”

  27. I think this is what the bible was talking about when it says the love of money is the root of all evil. There are so many great things that we could be doing, but our political system is so corrupt and full of lobbyists and lawyers, that it is a completely uphill battle to get any changes through at all.

    This is a big fuss now and it will get a lot of publicity for a while, but soon something else will come along to push it out of people’s minds and we’ll be back to business as usual and the whole time all these companies will be raking in big bucks in any way they can.

    I think the press is the worst of it. There are so many newspapers and news shows and people are addicted to them, even though they rarely print the truth. I swear that recessions are started by newspapers. They pick a slow newsday and start “hinting” that things are not what they should be in the financial world. Then another news service picks up on it and reports it as NEWS and before you know it, people start getting nervous and stop spending and before you know it, we are back in a recession cycle. That’s why I’ve stopped watching the news and stopped reading the paper. I still get all the news I need from the Internet and I can pick and choose my sources.

    Other than that, I can just be smart about my own money and teach my children the same.

  28. I just want to say Hear, Hear!
    The current situation isn’t surprising, though. I wondered, lo those many years ago when I was a college freshman and got all those credit card offers, or when Elliot was a baby and got a credit card offer, just how everyone was supposed to pay off all this great credit?

    I was amazed, last year in the US, at how materialistic everyone was. I’d forgotten. I couldn’t play the game but I’ll admit it was very tempting. It’s nice to be back overseas, where people deal with issues of starvation not of getting all new couch cushions to match the season. It seems more real, somehow.

    I like your bail out plan a lot, but I doubt it’ll happen. Too bad. I heard our economy is currently based on credit, on borrowing and lending, not on any tangible thing like export/import. How can such an economy survive? I personally think the whole country’s going down, but I’ve always been a bit pessimistic.

  29. What I wonder about is on those rare occasions when I go into a department store at the mall, who buys all those things, those expensive things? Racks and racks and so many racks of clothes you can’t squeeze past, store after store with rack after rack of EXPENSIVE clothes. Who is buying a $45 t-shirt? or a $200 sweater? All those racks of clothes and merchandise overwhelms me and makes me feel claustrophobic.

    Oh that’s right, people with over extended credit card who want to feel movie star rich, who pretend a $45 t-shirt will make them something they already are not, they buy those clothes. And you and I pay for them.

  30. I drive by the new developments with the new big houses and wonder who can afford them. People with two large incomes and are never home to enjoy their beautiful homes.

    Also, many expensive clothes are bought by teens. (who should be saving for college, BTW) My son is a little better than average because he does save. But as a senior in HS, he works 10-12 hrs per week and gets about $70-80. HE does save about $40-45 per week but spends the rest of his money on whatever.

    He also learned an important lesson in grocery shopping this week. HE wanted (needed) his favorite french vanilla cream and I needed syrup. HE spent nearly $8 on two things!!! He said, but it was only $.50 more than the store brand. I said I buy 100 things a week — I don’t feed our family of 7 as a SAHM by paying $.50 more for each item. (“I get it mom, I get it!”) Yesterday when we had a similar scenario he came home with the store brands and commented that he’d learned.

    WE need to be vigilant in our teaching at all ages.

  31. We participated in making National City’s kid’s site that teaches children about money:
    There are also lesson plans that go with the site on the parents/teachers page.

    I am from Europe, and I think that the deregulation and capitalism here is to blame. We have to throw in a bit of social regulation to make sure big business isn’t taking over and incomes are regulated. It is too bad there is no proper Christian Democratic party here that people of faith would feel comfortable voting for.

  32. Oh I meant to comment on the used car comment too. I bought my car used, but I got lucky. My husbands car was used, and ab-used before he bought it. Be careful when buying used cars! Unless it is from a reputable dealer with a good amount of warranty.

    I am not against buying a new car, because the repair costs are much less and with children, safety must come first. It also helps your credit. I think the key to car-ownership is to 1) Buy a car you can afford and mind the gas tank (A sports SUV is a great alternative to a larger SUV). 2) Maintain your car well. Get regular oil changes, and be gentle on the breaks at the lights. Get regular check-ups and get a good set of new tires. 3) Make sure you trade in your car before the miles get too high, and you will not get any trade-in value.

  33. AM, you might want to encourage the mother of the 3-year-old who receives credit card offers to check the child’s credit report. I read a story a year or so ago about identity theft, and there was a case of child’s social security number being used by an illegal immigrant for years. Can you imagine the shock when you go to get your first credit card and find out you already have “bad credit”? (I’m pretty sure the article I read was in Reader’s Digest. This isn’t the one I remember, but here is a link to an article about a similar case (Reader’s Digest “10 New Money Rip-Offs”):

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