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So Bret and I woke up early to go to a local restaurant that advertises free WiFi with coffee and donuts. Apparently, nobody ever shows up for it since they didn’t have coffee or donuts. That’s a bad sign.

I went out to eat and had a dirty fork, I asked for another, they brought me a dirty fork. That’s a bad sign.

Falling back on credit cards to pay for basic expenses, not that’s a really bad sign.

Believe me, I understand what it can feel like to be broke. That was a long time ago now but those feelings and fears never seem to go far away.

When faced with needing to buy food or put fuel in the car, it can certainly be tempting to place it on the handy plastic. The most elusive thing at the moment is logic or rational common sense. Instead we have excuses and rationalizations and that’s human nature.

Here is the basic fact that escapes us at the moment of the no money purchase. If we don’t have the money to pay for whatever it is, how are we going to have the money to pay the bill when it arrives. Typically that bill arrive on top of yet another tight week or month in which more expenses land on the plastic because the money was not available.

The cycle continues until either one of several outcomes occurs:

  • A desperation payday loan is sought.
  • Money is borrowed from a family member.
  • 401k money is drained to pay the bill.
  • Income is increased to make ends meet.
  • The bills go unpaid until you are introduced to your new friend, the debt collector, who by the way is in collections themselves.

So what are the signs that make me concerned for YOU. Let’s look at the tea leaves and see what we come up with.

  • Credit card delinquency rates rising. “Credit card delinquency rates hit a 4-year high of 4.53% in February, according to Moody’s, a debt rating agency.”
  • Amount of consumer debt, rising. “The Federal Reserve reported Wednesday that Americans’ credit card debt jumped 6.7% in the first quarter of this year to $957.2 billion.”
  • Number of foreclosures is rising. “Mortgage delinquencies will continue to rise over the next six to 12 months as home prices decline and economic conditions remain difficult, according to one forecast released Monday.”
  • Gas prices continue to rise without a ceiling in sight. “Retail gasoline prices increased for the sixth straight day and hit their fifth consecutive record. Drivers now pay 21% more for a gallon of gas than they did a year ago, according to AAA.”

Now I have been positive about the future and not all doom and gloom. In fact a recent post of mine talked about the good news that 95% of people are employed. And I mention these twisted tea leaves only as a warning that unless we are each conscious about our own financial realities, misfortune is not that far away.

In times of stress and trouble the chemistry in our brains, like an addiction, whispers for us to go shopping to silence the voices within. A little retail therapy never hurts, or so we tell ourselves. Even I’m not immune to those voices.

2007 Suzuki Burgman 650 ExecutiveNow that I’m back in the U.S. I want a new motorcycle. My nephew Bret accuses me of abandoning cool because the bike I want is the Suzuki Burgman 650 Executive. If I let the advertising messages override what I truly want I’d get a big testosterone laden Harley with a killer exhaust, cool shades and a leather jacket to impress, who?

Just because I write about money credit and debt doesn’t mean I’m not immune to some of the same emotions and pressures that you are. The only upper hand I’ve got is just a bit more awareness of the warning signs and outright fear of being back in the shit again.

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Steve

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