My SO got me a European charge card from his bank the other day so that we can use Euros for the coming year from his bank account over there. (This is the year we'll be making about half of our salary for education pursuits).

It got me thinking again about the book that had the 50%Needs, 30%Wants, 20%Savings strategy that I've been using for the last year. Pregnancy has affected my brain, so I can't remember the title, but it's a great book.

Anyhow, the writer's talk about how in the 1950's a person COULDN'T really go over their credit line, and COULDN'T spend more than 25% of their income(or so) on their house and the banks WOULD NOT loan the money for a new car that they didn't think you could afford (using much stricter guidelines than they do now). Etc., etc., etc. Their point was that "fixed" expenses were much much lower than they are/can be today. Hence, many people are in straight jackets because of their fixed expenses.

Back to this charge card thing... SO tells me that I have a credit limit each month, but that the bank automatically takes the payment out monthly and pays the card off in full. He didn't have to sign up for this, they just don't have "credit cards" where he's from, they have "charge cards" like the American Express card that HAS TO BE PAID OFF and if you don't have the money, they revoke the card. That's it. End of story. Is this why Europe has a higher savings rate on the whole than we do? Which brings me to the question at the title of this entry, at what point should financial institutions be held accountable?

Isn't this a little hard on the individuals who borrow this money to be in such financial difficulties? How does it affect a person/family's quality of life if they're in debt up to their eyeballs? Yes, I know, people need to take responsibility for themselves at some point, but that would mean they'd need to be educated as well... kind of like those hazardous messages on cigarettes. If a person hasn't been taught, how are they to KNOW? It took me a long time to get out of debt. What would life have been like if I hadn't gotten into debt in the first place... ? Did it kill me to eat macaroni and cheese dinner 4 nights a week because my house payment and credit card bills took up almost all of my paycheck? Nooooo.... and it's my fault. I just wonder for the rest of our kids, our future, "what if?" What if companies were forced into more reasonable borrowing percentages? And what if credit card companies were required to have higher minimum percentages on the balances owed? The list is endless and this is long. I just got that charge card application in my hand and had to wonder how it is that we're going to compete with the rest of the world when we as a people have no savings.

J
P.S. Contrary 1 - couldn't figure out how to send a private email like the old set-up on the site. I'll keep looking. And baselle... I don't get the emails when comments are posted, but see above. I'll keep looking.

My credit card statement holding year end totals arrived in my inbox yesterday. This prompted me to take a look at how my money situation has changed in the past year.
This is what I found out:

In 2005...
- I did not spend any money on credit card finance charges (a first since my first year in college)

- A combination of stock increases, savings, and debt reduction increased my net worth by 14% (this has since gone up more with the student loan payoff)

- There is $1,000 in an emergency fund (unheard of in my life)

- My worries about money began at "often - at least 10 times a day" and have decreased to "every now and then - once a week or so"

- I started spending allocated money for self-improvement and not feeling bad about it

I hope 2006 has as much or more to offer.

I am so excited! There are three debts that I have/had. One is the mortgage, one is a private loan that could be considered an equity loan and the other was a private loan for college costs.It's a "was" because, well, my debtors (i.e. loving grandparents) decided that they could afford to forgive my student loan! I got the letter in the mail today. Holy smokes. That's just awesome. Which means... that way back in August when I made the goal of paying at least $3K towards my debt by February 2006 has been met. Granted, I was only actively involved in putting a little over $1K in the pot, but everything counts if it lowers the balance! Yipppeeee!!!! This bumps up my net worth by $11K.