Just keep plugging along and pay off those credit cards. Don’t borrow on your house to do it. You’ll make get them paid off quickly without a house payment.

The reason the debt creeps in on us is we have begun to manage our personal finances the way big businesses manage their daily cash flow. They borrow money one day to cover the cash flow they will need by 10 am the next day. After the daily receipts have been counted and they’ve collected enough to pay it back and pay for the next day’s cash flow needs too, they pay back the over night loan. These over night loans of cash cover everything from employee paychecks, tax payments and company vehicle maintenance to supply purchases. This cash is what makes the American economy work. But what also makes it work is it’s very short-term borrowing at very low interest rates.

Small business doesn’t operate this way, and neither do households.

We consumers don’t have daily cash coming in like big business. We borrow month-to-month to cover our cash flow short falls, but don’t pay it back as soon as we have enough money to cover that short fall. We should also be able to manage our budgets without daily injections of borrowed cash followed by daily repayments of borrowed cash. We have a much smaller system and we can cover our cash flows on our monthly, semi-monthly, bi-weekly or weekly paychecks. Or at least we should be able to do so.

I’m glad you like my blog and I hope you’ll return regularly to read the content or subscribe in the righthand sidebar.

Sherri

I say keep paying on that house (it looks like you intend to stay)…it will be completely worth it. I finally got mine paid off, but I still have 27,000 in CC debt, which is amazing to me. My husband and I are reasonably smart people but the debt sure creeps in.

Some people still don’t have power and some stop lights are still out. Many stores and shops are still operating under reduced hours and limited supplies.

Since New Orleans wasn’t hammered and flooded the national news didn’t report on the huge amount of destruction in Baton Rouge. Gustav was the worst hurricane Baton Rouge has had in at least 50 years. We’ve had Betsy (1965), Camille (1969), Andrew (1992), Katrina and Rita (2005) and now Gustav (2008). Gustav is the worst. We were very fortunate that Ike went farther west than Rita did in 2005. We are devastated enough. A second hurricane 12 days after such a bad one would have really been horrible.

If you are inclined to give generously, please give to the American Red Cross disaster fund. Between Gustav and Ike, that fund is really in need of donations.