The U.S. dollar is becoming worth less and less each day. In the morning paper market analysts make predictions about the stock market and how it is about to crash. People are defaulting on their credit cards and bankruptcies are soaring. And everywhere you hear of folks who are on the verge of losing their homes to foreclosure.
For the U.S. consumer, buying a home is supposed to be the American Dream coming true. But many of us bought into an illusion. We thought we could have it all. We’d have the nice house and car, put the kids through college, take vacations—life is supposed to be good. No matter if the mortgage payments are a little steep. We’ll figure out how to handle those interest increases when they come. There will be pay raises, promotions, a second job if need be. We want to believe that, believe we can afford things and pay later.
But many of us are realizing that we were sold a bill of goods by some pretty shrewd operators. The snake oil salesman has been here and is long gone down the road. As it turns out, we can’t actually have it all. There is always a price to be paid somewhere down the line when we get something too easily. Some commentators compare the mortgage lending situation with walking into a casino where the dice are loaded and the odds are stacked in favor of the house. It was too good to be true. And we signed on too easily.
The old saying, Caveat Emptor, “Let the buyer beware” would have been the best advice to heed, but many of us weren’t listening to wiser voices. And often, wiser voices are drowned out by those who want to make a buck at our expense, at the expense of our children’s future.
Home loans were issued to people who clearly could not afford them. Financial institutions issued loans without requiring any documentation proving that the borrower could afford such a loan. It was all so easy.
My Dad used to have a calendar in his workshop with a picture of a man playing the flute—the pied piper? The caption underneath the illustration read, “When you buy something for a song, watch out for the accompaniment!” Nothing is as easy as it looks on the surface. Medical bills come, new babies are born, accidents happen, expenses multiply that never occurred to folks who were just learning what all this responsibility really meant.
Now we learn in the news that the Federal Reserve is cutting interest rates to try to remedy the situation, but that will help the dollar decline further. And many foreign investors have decided to take their money elsewhere. Though organizations and agencies and the greedy folks at the top certainly set up the odds, we can only make headway on a future for ourselves and our children, by taking a reality check, a realistic assessment of what is possible. Now it is time to pay the piper, as they say.
Time to accept responsibility for ourselves and get down to working toward solutions that are affordable.
For those of us who can find a lender who will work with us to avoid foreclosure, we’ll have to take this reality check into every area of our lives. We need to become financially literate by reading, talking to advisers, learning to put off some of the things we thought we needed, learn to resist pressure from the kids for the newest toy and fashion trend to come along.
It’s still possible in America to realize a dream, but let’s make a realistic plan. Learn what the price of anything is first, and carefully analyze just what steps will be needed to get there. Learning to live within our means—to be satisfied with a smaller house, the fuel-efficient car, some clothes from a second-hand store, simple pleasures like enjoying local parks instead of traveling to Disneyland—will be necessary if we are to find our way out of debt. There are so many creative ways to make money and invest it, but we must be willing to give up the false hopes and dreams and do the research to find just what is really doable. |
