Dear Abby, Dear God


By Louise Ure

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DEAR ABBY: How can I make my husband understand that eating out every Sunday after church is not only a waste of money, but also makes going out for special occasions not as important as they could be? I try to explain that we could do something besides eat out, but he only wants to do that.

We spend anywhere from $80 to $100 each week on dinner out. My husband puts it on a credit card. Now, I’ll admit that I’m not that "up" on how credit cards work, but I know we’ll have to pay them off eventually. We don’t have the kind of money to splurge every week. How should I deal with this?

    — TIRED OF EATING OUT, HAMPTON, VA.

I probably should be posting about what a fine time I had at the Los Angeles Times Festival of Books. It was truly grand to catch up with old friends and reconnect with such fine booksellers as the folks at the Los Angeles Mystery Bookstore, Book ‘Em Mysteries, and Mysterious Galaxy. I’m still reveling in the weekend and I’m sure the heat rash I developed will be gone by the time I get to the Edgars® celebration on Wednesday.

I could also be writing about how much I’m looking forward to attending my first Edgar® Awards banquet. I’m especially proud of our Northern California nominees, David Corbett (for Best Paperback Original) and Michael Chabon (for Best Novel). Add to that a long lazy lunch with my favorite agent in the whole world, and the trip sounds like heaven.

Or I could be talking about that curious peace I’ve found this week since I’ve sent in the final revision to Liars Anonymous and am hovering over the opening page of the next book.

But I’m not thinking about those things. Instead, my attention did a double flip dismount and stuck the landing last Thursday when I read the above letter to Dear Abby.


“I’ll admit that I’m not that ‘up’ on how credit cards work, but I know we’ll have to pay them off eventually.”



WTF????

I know the banner at the top of this blog says “Mysteries, Murder and Marketing” and this post has nothing to do with any of that, but I can’t keep quiet about this.

Who is this idiot? Clearly she’s an adult – a woman old enough to be married, anyway. The letter doesn’t say anything about her educational background or whether she has kids or a job outside the house. But is there truly anyone in America who doesn’t know how credit cards work?

I have the same reaction every time I see the flight attendants demonstrating how to put on a seat belt, for all those folks who have never seen one before.

Okay, Eating Out in Hanover, VA. Here’s how it works. You show the card. You eat. You get a bill for that amount, plus some extra for having used their money instead of your own. Now you owe more for that dinner you couldn’t afford than you would have if you’d paid for it in cash.

Good Kind Christ. No wonder the economy is in the toilet.

I haven’t always understood the finer points of finance. Back in the late70’s, when I was spending more money on recreational drugs than I was on rent, I ran up a credit card debt that was bigger than my entire annual salary at Foote Cone & Belding. A co-worker named Jill took me across the street to The Rusty Scupper, bought me a double shot of tequila, and melted my credit cards in the ashtray. It was the nicest thing anybody has ever done for me.

I started saving my drug money and bought a house. I spent wisely. I invested well.

And I got smarter about finance.

I learned about the pitfalls of debt and interest and commodity futures. I taught myself to read balance sheets and annual reports. To understand that supply and demand are only  part of the equation. Fear, crowd mentality, and “irrational exuberance” are equally significant factors.

So last July, when I took a look around at the craziness going on in this country – in our divided politics, in our spending and lending practices, in the stock market, in car purchases and gas prices – I could no longer validate the key underpinnings of the market that allowed me to believe that we were on solid footing.

I cashed in everything.

This year has brought about other changes. I paid off the credit card balances, then transferred any remaining debt to lower interest cards. I entertained at home more often then I went out. When the vacuum cleaner died, I still replaced it with a Dyson, but I bought it off Craig’s List.

Most of us are feeling the pinch. Maybe we’re using the library more. Walking to the corner store instead of driving. Going to one convention instead of three. But that’s only the beginning of the changes.

Things are going to get worse before they get better, and I don’t just mean the stock market. I mean the foreclosures, the ballooning credit card debt, our kids’ inability to get student loans, a quadrupling in the price of gas, and shortage of rice around the world.

And we still have people like “Eating Out” who say that they “aren’t ‘up’ on how credit cards work?” Honey, you’re part of the problem.

Feel free to vent, my Murderati pals. Do you know anybody like “Eating Out?” And how have you been economizing this year?

LU

 

35 thoughts on “Dear Abby, Dear God

  1. Mark Terry

    Your post actually reinforces at least a part of the problem with the economy–lack of confidence. I’m one of those folks who believes mass psychology is a significant aspect of the economy and one of the leading causes of recession. I know most people think “The only thing we have to fear is fear itself” actually refers to enemies, but he was actually referring to the economy when (was it FDR? I think so) gave that speech.

    It’s one of the things I’ve been trying to get a handle on. Which of the three presidential contenders will have the kind of charisma that will inspire economic confidence in the American public?

    Because, you see, when you’re convinced the economy’s for shit and only going to get worse, you cut back, stop spending and in general, make decisions as if the world is going to end. Which makes matters worse.

    Which isn’t to suggest there aren’t actual infrastructure problems with the U.S. and world economy, there are, or to even suggest that saving more and spending less or at least using credit less, is a bad idea–it isn’t, it’s a great idea, I highly recommend it.

    And hell, I’m from Michigan. You think the U.S. economy looks bad from where you’re standing, try it from where I’m at. This is getting ugly.

    Still, we’d better have some confidence it’s going to get better or we’re really in trouble.

    Reply
  2. J.D. Rhoades

    Good point, Mark. But on a microeconomic level, sometimes people can amass debt because of OVERconfidence, the assumption that just around the corner, we’re going to be making scads of money off the lottery or an anticipated raise or bonus, or whatever. And then it doesn’t happen. Or it happens but it’s not enough to keep up with the usurious interest rates.

    Reply
  3. Mark Terry

    I was oversimplifying, JD. Americans probably don’t save enough and probably buy too much on credit (or too much in general, but that may be a philosophical issue re. materialism) and I know entirely too many people who have ridiculous credit card bills. And it’s not like we’re completely innocent of this. We’re trying to pay down some credit card bills that got out of hand last year (book promotion, anyone?) as well, although compared to the average American, we’re totally frugal. Still, I’m not sure that acting as if it’s the end of the world and burying your money in your backyard is going to help matters any.

    Reply
  4. Louise Ure

    Mark, I appreciate the opinion, and I do in fact believe and hope that things are going to get better. But I don’t believe in magic and hype. I’ll invest again, in companies that have decent P&E ratios or new technology that will be in demand.

    In the meantime, it’s hunker down time. And if that means that it will take longer to work our way out of this hole, then so be it. I wasn’t the cause of the problem; I won’t be the patsy in the solution.

    Reply
  5. Tammy Cravit

    Well, we’ve paid off our credit cards (in full), and are working on doing the same for our car loans. We’re eating out less (good for the waistline as well as the wallet) and saving more, and we’re working on other sources of income (my writing and photography, and my partner’s music) to supplement the coffers. Oh, and we’re putting more in our SEP-IRAs this year.

    As regards the larger issue, I do happen to think that the American public’s confidence in the economy can’t possibly not be impacted by their confidence (or lack thereof) in those driving the bus in DC. Whether the next election will help or hinder that problem remains to be seen.

    Oh, and Eating Out needs to rent and watch Maxed Out (http://www.maxedoutmovie.com/). Seriously.

    Reply
  6. Karen Olson

    I paid off my credit cards 15 years ago, and my husband and I pay the balances on our two, yes only two, credit cards every month. We paid off one car and paid cash for the other. The only debt we have is our house, and we’ve been making extra mortgage payments on that for the last five years. We do like to go out to dinner, but we’ve cut way back on that in the last year, making nicer meals at home, and I take the bus to work to save on gas and parking. Our daughter is going to the cheap town camp ($50 for five weeks!), with only one week at an expensive one this summer so my husband and I are staggering vacation weeks to make up the rest of the summer.

    I paid $3.75 at the pump yesterday, happy I only fill up every month. But with prices like that, we really need to get a reality check.

    Reply
  7. Louise Ure

    Karen, you and Tammie sound like you really have your act together. There are so few people living within their means these days.

    Tammie, I haven’t seen Maxed Out, but now I’m going to.

    Reply
  8. Stacey Cochran

    I’m with J.D. on this one. It’s not a lack of confidence that is troubling. Our entire country has moved in roughly 75 years from one where people carried very little (or no) debt on a mass scale, to one where no one thinks twice about carrying a 200,000 mortgage, a 35,000 car loan, 80,000 dollars in student loans. Most weekly budgets are fixed around, in part, how much debt a family can afford to carry.

    Our entire economy has shifted to a credit-driven economy in about 75 years.

    It’s important to understand that before WWII, people did not borrow money from banks to purchase homes. That is a phenomenon that arose roughly after 1940s.

    Reply
  9. Zoë Sharp

    Hey guys, just be thankful you aren’t paying $10 a gallon for gas, and 17.5% sales tax on just about everything you buy, like us poor saps over in the UK!

    I heard a lovely tale about when they first started paying the British Army direct into a bank account. Most assumed that, if there were cheques in the book, there must still be money in the account, so went monstrously overdrawn. And when the bank wrote to them to tell them about the amount they owed?

    They simply wrote them a cheque…

    Reply
  10. JT Ellison

    We’re like Karen, and it’s the greatest freedom in the world. All the business expenses do ad up, but if you pay attention it’s easy to stay on top of things. A little foresight, planning and budgeting works wonders. It’s a shame that economics isn’t required in schools anymore.

    That said, we’re not there yet, folks. We still haven’t had 2 consecutive quarters of negative GDP, which signals an actual recession. We’re in a big ass correction, yes. But the Europeans are suffering from slower growth and will have to drop their interest rates which will send the Euro downward against the dollar soon or they’ll be in serious trouble.

    As my darling economist husband just said, historically, some of the largest gains in stock values occur as the economy, remaining in recession, begins to shift from the bottom to growth. A lot of investors believe we have hit a bottom and are now buying. They could be early, but not necessarily unprofitable over time. Remember the old saying, buy on fear.

    There’s a lot of media craziness about all this too. Just spend your stimulus check. (If you have no debt, obviously.) That will help.

    Despite the moaning, things are coming back. The lead on the news last night was how well Nashville’s real estate market is doing — UP a net 10-15 percent. In this “bad economy.” So don’t pull out of the market now. Things are going to be just fine. Markets shift, and we’re at war. Nature of the beast.

    Reply
  11. R.J. Mangahas

    Louise,I remember reading that letter too. MY GOD pretty much says it. No wonder this country is in so much debt. AS for myself, I used to be pretty bad with this. But as of now, my credit cards are shredded and I’m on my way to financial freedom. It may take awhile, but at least I feel like I’m going in the right direction.

    RJ

    Reply
  12. Louise Ure

    Stacey, you’re right about the structural shift in our economy. My father said he wasn’t against credit, but he’d only use it once he’d saved enough money to have paid for the entire purchase with cash anyway.

    And Zoë, I know that we’ve had it easy with gas prices and taxes versus the rest of the world. In all fairness, our gas should be selling for at least $5 a gallon here.

    Your cheques story reminds me of my mother. She always wrote a $50 check to “cash” every week, for pin money and smaller purchases. But it took us years to convince her to deduct the amount from her balance. “Why? I still have the money right here.”

    Reply
  13. Louise Ure

    Like your economist husband, JT, I think the market will soon begin to rebound. But positive changes on Main Street will take a hell of a lot longer than those changes on Wall Street.

    Hi RJ. I’m not at the point where I can shred the cards, but I’m sure not carrying the debt I used to!

    Oh, and that “stimulus check,” JT? It’s going to the credit card. Is that going to be any kind of stimulus at all?

    Reply
  14. Tammy Cravit

    Louise, you should *definitely* watch “Maxed Out”, but only if you’re in a mood to be scared witless. People talk about the evils of debt, but even the (relatively) recent “reforms” to the bankruptcy laws in this country haven’t woken people up to the truth: the credit industry’s most profitable customers are those with the least ability to pay their debts. Don’t believe me? Ask someone who’s recently filed for bankruptcy how many credit offers they get now.

    The credit industry makes billions of dollars a year from people like Eating Out. That’s the reality people sometimes forget: the card companies don’t lend out money from the goodness of their heart. They do it because it’s immensely lucrative.

    Reply
  15. Louise Ure

    Tammy, part of what shocked me about that Dear Abby letter was imagining Eating Out’s life. Even if she’s not the bill payer in the family, how does she shop for groceries? When she buys clothes, does he give her money? Does she ever wonder whether they can buy a new car or take a vacation? It’s hard for me to even picture a life of such submissiveness and incuriosity.

    And her husband may be no better. In all likelihood, they are those people that the credit card companies covet.

    Reply
  16. Louise Ure

    RJ, I have an emergency card, too. But it’s recently become by “book promotion expenses” card, too. Hardly an emergency, but a necessary expense. I wish I could keep it for real emergencies.

    Reply
  17. jeanne Ketterer

    Very little extras, few dinners out, commuting by bus, weekly boxes of veg’s from farmer’s market (better value for dollar), no credit cards. It’s an absolute culture shock at first, but it’s doable.

    Jeanne

    Reply
  18. Louise Ure

    Jeanne, I admire the discipline it must take to stick to that. I’ll bet we’re all going to be following your lead.

    (And I’m so glad Typepad’s back up after that hiccup of theirs! Was it something I said?)

    Reply
  19. Tom, T.O.

    Using a credit card to eat out?

    I could never understand paying next month for something I poop out the next day….

    Reply
  20. JT Ellison

    Re: paying your debt with the stimulus check… sure, that counts too. It let’s you get rid of the interest, which in turn makes your purchasing power increase. More to spend.

    Because face it, we’re all gluttons. We’ll end up spending more anyway. : )

    BTW — what was Abby’s answer?

    And apologies for the interruption of service — Typepad went down.

    Reply
  21. Louise Ure

    JT: Here’s Abby’s answer. Straightforward and helpful, but not as far as I would have wished she’d gone in telling the woman to learn more about finances and encouraging her to be part of the decision making.

    “DEAR TIRED OF EATING OUT: Have another talk with your husband. If he is able to pay his credit card bills in full every month, then you should stop worrying. If he is not, then you are living beyond your means — a practice that has gotten many thousands of people in big financial trouble. And if that’s the case, to assure your future you both need to agree upon a budget and reorganize your priorities.”

    Reply
  22. Catherine

    Once I paid off my one credit card a couple of years ago it’s been cash only or layby( lay away?) where and when I can. With my present lifestyle I can manage without one.

    However a lot of businesses are geared towards using credit cards for bookings or surety of payment. Biggest I can think of is hotels. As I haven’t stayed in any hotels in the last couple of years this hasn’t presented much of a problem.As I’m nearing the end of my degree I can see this changing.

    To contrast some changes I’ve noticed over here from Australia. When I travelled to the States in 2000 the Aus $ was .51c to the US $. Now it’s about .94c.

    In things that bother me beyond the petrol prices… about ($6 for a gallon this weekend down to about $5 now)…. is that we have book prices still linked to a very stinky tax that has retail prices of hard cover at $43 and tradebacks at $32 and most paperbacks between $19.99 and $16.99

    Reply
  23. Alexandra Sokoloff

    Yike, I’m having a heart attack at those book prices, Catherine…

    It’s hard not to get caught up in the end of the world feeling about the state of the economy (precipitated by our very own AntiChrist…), but I do trust in the US to swing back the other way, eventually.

    In the meantime, I’m happy to give up manicures and pedicures (I really hate sitting for two hours in a salon, anyway…) and am also not so happily economizing by taking classes at the Y for a really low monthly rate instead of spending my usual exorbitant fees on dance classes.

    I can relate to the letter in question only in that Michael is a big spender and not being a foodie, I wince at his restaurant bills. Luckily I’m a cheap date.

    But credit cards? Of the devil, unless you pay them off monthly.

    Reply
  24. Virgil Ikari

    I always use a debit card for everything. It’s as easy as a credit card, with none of the pesky debt problems.

    Louise: On CNN about a month ago, they said that if you had kept your money in the market (can’t remember which index they used) for the past ten years, you would have made about an 80% return. However, if you had missed out on just the twenty best days for that ten year period, you would have lost 17%. Some of those “best days” were as the market just started to come out of a recession.

    Always think twice about taking your money out of the market. You want to cash out at the top and get in at the bottom.

    A friend of mine always says, “The stock market is the only place in the world where people stay away when things go sale.”

    Reply
  25. J.D. Rhoades

    “RJ, I have an emergency card, too. But it’s recently become by “book promotion expenses” card, too.”

    See, “assuming money’s just around the corner,” above. OR, to put it more clearly: me, too.

    Reply
  26. Fran

    What a timely topic! Lillian and I are working on refinancing our home since we foolishly got ourselves into an ARM. We have one credit card, one car being paid off, we’re reasonably frugal. We have a good credit rating, verging on excellent. And it has been a total bloody nightmare getting anything resembling an unpadded, straightforward, written loan estimate from anyone. It’s infuriating.

    I saw a show about a couple trying to get their financial lives back in order, but they couldn’t make themselves give up eating out, she had to have a weekly full-treatment spa session, he needed new clothes every week. Finally the financial advisor gave up on them. That’s how people like “Tired of Eating Out” live, and they don’t understand that there are consequences to their actions.

    Reply
  27. Fran

    Oh, and Catherine, we had some Australians in the shop who told us just what you’ve said, which is why we end up selling books to folks down there. Even with shipping, it’s cheaper to buy books from us than it is in Oz. Scary stuff!!

    Reply
  28. Louise Ure

    Stacey, I’m volunteering for that island!

    And Fran, that’s an absolute nightmare. You’ve got good (to great) credit, you’re managing your funds properly, and even you can’t get a decent loan? Young couples just starting out are going to be having a hell of a time.

    And I have no pity for the nouveau pauvre “I must have my weekly spa treatment” folks.

    Reply
  29. John S

    Twenty-five years ago, I spent about two months working as a bank teller, at a branch near the campus of a prestigious institute of learning. One day, a young man came to my window and handed me his credit card, issued by the bank I was working for, and asked me to tell him how much he owed because he wanted to pay. I did. I handed him back the card and told him how much he owed. When I asked for his payment, he handed me back the same card.

    He was confused and then disbelieving when I told him he couldn’t do that.

    Reply

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