lessons from a watch

I know people everywhere are concerned about the financial crisis in our country. I am too. But just like Antique Mommy, I think not enough energy has been put into just how we got into this mess.

Let me tell you a little story...

When I was quite young... probably late teens... I saw this watch I really wanted. But I couldn't afford it. It cost something like $100 or something like that. It was gold and a Seiko and had a little chain and it was just a thing of beauty. And it fit me. Another big consideration because I had and still have super thin wrists and not just any old clunker watch looks good on me. But this was perfect. I made many trips to the jewelry counter at Sears to gaze upon it's loveliness. But I could only gaze, because I couldn't afford it.

So I hatched a plan. I could see if Sears would issue me a credit card. So with my parents permission, I applied. And wouldn't you now it... yes they would! I was elated. I bought my watch with my new credit card. I excitedly awaited my first bill to come in the mail. Would you believe it... they told me I only had to pay ten dollars. Ten dollars! I was thrilled! At this rate, I could have this watch paid off in less than a year and I would barely feel a thing.

So I paid my minimum payment for quite a few months without looking at my balance... not like I was oblivious to how things worked or anything. When I finally looked at my balance, I was nowhere near getting my watch paid off! I was stunned! I probably wasn't even half way there.

So I had to hatch a new plan. This time I would give until it hurt a little bit. After all, I wasn't making that much money. But I gave a lot more than the minimum payment and finally began to see my balance going down. I had the watch paid off in no time. When I calculated the actual cost of my watch, it made me a little sick to my stomach. But it was a lesson learned. You can't get something without giving up something... and 'credit' wasn't really created to benefit me, as much as the lender.

I've continued through life being very conservative with things. My husband grew up that way as well. When we bought our first (and only) house, I worked and we put all of that money in savings and put a down payment on it... not a huge down payment.. but something. Even though 15 years have gone by, and we could move on, we haven't. Other people would be shocked at what our house payment is... and jealous. Where we live isn't perfect... oh the stories I could tell. But it has allowed us to send our daughter to a wonderful private school in our area that we could otherwise not afford, had we grabbed up our McMansion when we finally felt like we had two nickels to rub together....like a lot of financially strapped people we know. It has allowed us to save up for our new car purchases. It also allows us to give charitably to causes we are interested in. It's not all going down a rathole to a bank somewhere.

Antique Mommy has posted a three post piece on finance. Click here for part one, part two and part three.