The Debt Trap

The New York Times is featuring loads of videos concerning the "Debt trap," and, after watching 2-3 of these, I'm became relatively upset.

The subtitle of the vignettes, "A series about the surge in consumer debt and the lenders who made it possible" really sums up the feelings of many Americans. It's not MY fault; it's the LENDER's fault.

Ok, let's go over the scenario:

1. I would like to buy a house, boat, tractor, car, etc but don't have enough money to do so. I go to the bank or lender to obtain a loan and agree to pay it back at a monthly interest rate.
2. Some unknown consequence comes up: I get fired from my job, increased medical bills, etc and can no longer repay the loan.
3. My loan defaults and I have items repossessed.
4. I'm oh so sad, so I lobby government to help me out. Now, everyone feels bad for me, and the lenders are simply a bunch of evil, greedy, no good business man.

I cannot begin to tell you how immoral new legislation aiding in the financial burdens of those who lived beyond their means and were unable to repay their debts is. To place the burden on the taxpayer - those who made proper decisions in their savings - is, at its root, theft. Don't punish me because someone else doesn't know how to manage his money.

I have absolutely no sympathy for these people; if you make bad decisions, you must deal with the consequences. If you don't understand the contract you're to which you are agreeing, find someone who does understand it and have them explain the terms of conditions.

Now - if a borrower was genuinely screwed over by a lender - that's a different matter and should involve criminal charges. The majority of these cases do not follow that mold.

Here's a general rule of thumb: If your rent/mortgage consumes more than 28% of your monthly income, you are living beyond your means.

At worst, I've managed to save 33% of my monthly income. At best: 66%. It's not that hard - I just don't buy lots of stuff.