An absolutely critical step in emergency preparation is getting out of debt. JoAnneh Nagler used an electronic version of Envelopes to categorize her money and allocate it to her different budget categories, so she’d have money to spend, money to save, and money to pay off debt.
I came up with a simple division of bills and daily needs, from food, fuel, dry cleaning, and household items. And then ways to make savings meaningful by creating free multiple savings accounts. In my household, we have a travel account, car repair accounts, short-term savings accounts for unexpected expenses, and money for Christmas and the holidays. You have to make savings real for yourself. If you want an outlet shopping day, great, make an account for that.
Debtors usually are mindlessly spending on [what they think of as] daily needs. We might spend $300 on a bulk warehouse and expensive wine. We have no accountability. Now, with a spending plan, you learn to prioritize what you need and love. It’s not a constricting tool—it’s an eye-opening tool.
It’d be worthwhile to have a “year’s supply” account, too.
via How One Woman Paid Off $80,000 in Credit Card Debt – US News and World Report.
Claiming that it doesn’t matter how deep into debt the government goes because “we owe it to ourselves” is one of the most idiotic apologies I’ve heard.
Who ows it? The taxpayers, and only the taxpayers employed in private industry.
To whom do we owe it? To the banks and to the holders of bonds, most of which are in foreign — and largely Chinese — hands.
I don’t owe myself $48,848.52, the government owes it to its creditors, and it’ll have to take my money to pay for it.
The public debt transaction, then, is very different from private debt. Instead of a low-time preference creditor exchanging money for an IOU from a high-time preference debtor, the government now receives money from creditors, both parties realizing that the money will be paid back not out of the pockets or the hides of the politicians and bureaucrats, but out of the looted wallets and purses of the hapless taxpayers, the subjects of the state. The government gets the money by tax-coercion; and the public creditors, far from being innocents, know full well that their proceeds will come out of that selfsame coercion. In short, public creditors are willing to hand over money to the government now in order to receive a share of tax loot in the future. This is the opposite of a free market, or a genuinely voluntary transaction. Both parties are immorally contracting to participate in the violation of the property rights of citizens in the future. Both parties, therefore, are making agreements about other people’s property, and both deserve the back of our hand. The public credit transaction is not a genuine contract that need be considered sacrosanct, any more than robbers parceling out their shares of loot in advance should be treated as some sort of sanctified contract.
Any melding of public debt into a private transaction must rest on the common but absurd notion that taxation is really “voluntary,” and that whenever the government does anything, “we” are willingly doing it. This convenient myth was wittily and trenchantly disposed of by the great economist Joseph Schumpeter: “The theory which construes taxes on the analogy of club dues or of the purchases of, say, a doctor only proves how far removed this part of the social sciences is from scientific habits of mind.”
via Do We Really ‘Owe It to Ourselves’? by William L. Anderson.