Just in case you were looking for even more ways to borrow money, now you can let your mobile phone company extend you money for a soda.

I thought you might enjoy this article that I wrote this morning about Capital One and corporate inefficiency.

Steve

It’s getting to be that time of year again. A time for joy, for sadness, for guilt, for pleasures and for bills.

The holiday season comes every year and yet people are annually surprised by holiday bills, and they will be again this year.

But that’s not really what this post is about. On the drive in today I thought about new years resolutions and what I feel like I can do better about next year. I’ve long skipped the usual empty promises of exercise and weight loss. I don’t need another purchased and unused gym membership to tell me I’m fooling myself about actually carrying those goals out.

In fact my desire in 2008 is going to sound completely ass-backwards, my goal is to try to find good ways to embrace credit. Now on face value that statement might look completely hypocritical based on my professional career as a debt expert but let me explain.

My day-to-day life is filled with battles about debt and contemplation of deeper thoughts about the ethics of modern banking or fair treatment of consumers by lenders. And trust me, all those battles and wars will still rage.

But what my thoughts were turning to was that if people are going to engage in credit, which leads to debt, isn’t there a way I can help them to make good and smart choices and decisions about which products to use and what to look for.

Sure, more education about financial products would be good in schools but I still have my doubts that it will make a significant difference. For me its a bit like giving people classroom driver education three years before they get in a car to really drive and how effective is that approach.

Recently I launched I Buy Junk Mail and what I’ve noticed from the offers people are sending in is that creditors are doing an exceptional job of laying out the credit terms and conditions in the fine print of card offers. The good news and bad news of credit offers is all there. The shocker is to see some of the terms laid out.

The other project that has been enlightening has been the Ethical Banker site that I launched to try to have an academic discussion about business ethics, banking ethics and reality. What has emerged out of that site has been a clear understanding, I hope, that modern banking ethics have nothing to do with the “fair” treatment of consumers. Rather the focus of banking ethics seems to be about the “fair” treatment of shareholder returns, market performance and the business.

So if there is little internal consideration for how the product impacts the life of the customer, then what I’m going to try to do for 2008 is a better job of explaining credit through education using actual credit offers. My hope is that if I can educate the consumer before the feast of credit begins that we will be able to eliminate some of the unfortunate debt situations we see on the back end.

At the end of the day I don’t want to live my life in conflict with others or be in a constant battle. I just want in the credit and debt world what we all ask for during the holidays, peace on earth and goodwill towards all people.

I might have vanished for a few days off the blog but I was off doing important things. Lately I’ve been so perplexed why banking ethics and normative societal ethics seem so divergent that I started a new blog to talk about these issues on. You can find The Ethical Banker online and I would love and encourage your feedback and input.

This subject has left me at this point puzzled that banking considers their ethical duty to be towards profit rather than towards providing the best care for the customer. I’ve posted a couple of questions here that make you think and are just begging for your input.

Steve

Here comes a good tip from the ethersphere.

If you were to keel over tomorrow and someone stumbled across you, who would they contact? Since almost all of us carry mobile phones, one suggestion passing around the world is to enter a contact in you phone that is labeled ICE. ICE stands for In Case of Emergency, logical, makes sense.

While ICE is not a universal approach to figuring out to call to claim you or help you, it is the best approach I’ve seen out there, except for wearing a tag.

The ICE abbreviation helps emergency responders to be able to easily get a clue about who to call, that is unless you’ve got a shortcut for the rapper Vanilla Ice or Ice-T in your contact list.

I am told that the idea was thought up by a paramedic who found that when he went to the scenes of accidents, there were always mobile phones with patients, but he didn't know which number to call. He therefore thought that it would be a good idea if there was a nationally recognized name for this purpose.

For more than one contact name simply enter ICE1, ICE2 and ICE3 etc. It’s a free and easy idea that will make a difference! Let's spread the concept of ICE by storing an ICE number in our Mobile phones today!

Help spread the word by emailing this article, because we all know that when you tell your friends and family things, they never listen to you anyway. :-)

Loads of free stuff on the Internet is just waiting for you.

From condoms to computer software packages, there is a plethora of freebies available from major companies that are just waiting for you to claim or download.

Here are a few of the intriguing free offers that caught my eye today.

Free Anti Virus Protection – If you already have a router that offers you firewall protection or your operating system does, consider using the free anti-virus program you can download.

Condom – The good people at Trojan will help you with anti0virus protection for a different piece of hardware, if you know what I mean. To claim your free condom just pick what kind you want online.

Advanced Education – MITOpenCourseWare while you can’t earn a degree it is just like attending a course at MIT with class information, notes, materials, videos, lectures, etc.

Office Software – While it’s not Microsoft, it is free. Take a look at Sun’s OpenOffice offerings and download, for free, software that will allow you to do word processing, spreadsheets and presentations,

Hate Pay TV - Why not consider Joost to watch what you want, when you want. Surely you can find something to watch from their 15,000 TV shows waiting for you.

Totally Free Money, Credit and Debt Advice - If it is good free video content you want for money, credit and debt issues, then watch the new Myvesta.TV channel online. Not only will you get to see a bunch of money related content but you can chat with a live adviser each weekday between 2PM to 5 PM GMT.

Want to See More Free Offers? - Look here, for a complete look at a whole load of more freebies just waiting for you.

Unsolicited credit card offers continue.

Christmas is coming. Christmas is coming.

One of the blogs that I enjoy reading recently posted a very interesting article that wanted me to share it with you.

In an effort to help you understand why it is wrong for HSBC, HFC, Citibank, Bank of America, Capital One and all the others to vilify debtors when they can’t pay the bills, it is important to understand that money problems are not about the money, they are about the underlying issues.

As long as the collection companies of professional creditors continue to label problem account owners as liars, cheats, thieve and idiots, we just aren’t going to make a lot of forward progress to creating a kind and compassionate framework to allowing debtors to resolve their debt problems and creditors to get paid.

Many times in my life of helping people I have had clients that have found themselves in financial trouble, for a variety of reasons, and in some cases it has been because of excessive collecting or collecting beyond one’s ability to afford the collecting. That does not make the person an idiot or financially stupid as many debt collectors would say.

In fact, many volunteer advisers or credit counselors simply tell people to stop collecting or stop doing this or that. The point is that more understanding of these underlying issues is necessary to make real changes.

Unfortunately today, what culture labels as acceptable credit counseling, or debt counseling is much like a patient going to a doctor with a medical problem and only the most obvious symptom is treated. Imagine a broken bone protruding from an arm only to be shoved back under the skin and considering that to be fixed. When financial live are wrecked everyone needs to do more than just build that person a budget or give clever advice like “stop collecting tools” or whatever it is.

So with all of that in context, let me turn you over to one of my Twitter friends, purplecar for her wonderful post on the issues of collecting. Be sure to read her blog also.

Popular psychology’s "they" say that 'everyone collects something.'

It took me a while to think about what I collect. I have a pretty big fabric and art supply stash (there probably aren’t very many crafts left in the world that I haven’t tried). I have a pretty filled-up font book on my Mac. But I don’t house my collections in some cabinet like rare coins. I don’t collect anything of any value. They are supplies that can be replaced easily, a means to an end, like keeping a well-stocked food pantry. I’m not too exciting that way.

Characters with a collecting habit can be pretty interesting. The plotline can go so many different ways. Is your character poor but saves and saves for a haute couture dress she is never going to wear? Is your character wealthy beyond imagination but loves vintage broken checker sets? Why do they collect? Is it a secret? Do they have friends/competitors that collect the same objects?

The psychology behind collecting isn’t well defined, but this website had a good summary:

For some people collecting is simply the quest, in some cases a life-long pursuit that is never complete. Additional collector motivations include psychological security, filling a void in a sense of self. Or it could be to claim a means to distinction, much as uniforms make the “man.” Collections could be a means to immortality or fame …

For some, the satisfaction comes from experimenting with arranging, re-arranging, and classifying parts of a-big-world-out-there, which can serve as a means of control to elicit a comfort zone in one’s life, e.g., calming fears, erasing insecurity. The motives are not mutually exclusive, as certainly many motives can combine to create a collector – one does not eat just because of hunger.

We are writers; This picture of a harmless collector trying to make sense of the world is lacking drama. Throw some obsession into it (a la Indiana Jones) and you’ll run into some inner and outer conflict when a character has to choose between the collection and something or someone equally as important.

If the collecting obsession truly turns sour, it is known as “hoarding.” Hoarding is the extreme case of collecting. Whereas collecting is a pursuit or a quest as an end in itself, hoarding behavior forsakes all other people and things. Often, a hoarder will harm others in their attempts to gather as much of the object as possible. Hoarders are those types that save every newspaper ever delivered to them or have 200 cats living in their house. It’s a psychological pathology that needs treatment. A hoarding character has the potential of taking over your book. For example, serial killers are thought to be hoarders of people. Entire books are written around this pathology, so make good choices on how obsessive you would like your character to seem.

One of my characters likes antiques. Mostly a very frugal person, she is a big fan of antiques from the Mayflower and Puritan England, and sneaks away to look for expensive pieces to buy any chance she gets. Her family is aware of it; her furniture collecting is pretty harmless, and this character has a mansion to fill anyway. But the want of this particular kind of antique says something about her wants and desires, especially when compared to her 1st generation off-the-boat Italian catholic upbringing. Choose your character’s collection so it shows a deeper, unexpected side of him or her. When do they find time to go searching? How many hours do they spend? Do they keep the treasures or give them away? Is it about the pursuit or the obtaining or both? What sense are they trying to make of the world? There are so many opportunities to show and not tell with a character’s collecting.

Think first of what you might collect now or started to collect as a child. Baseball cards? Matchbooks? Obsolete technology? See what your imagination can do when you collect your thoughts around collecting, and write on. Come back to PC and let me know what you came up with!

So do you get the point? In this case the debt is just the symptom of the underlying issue of the emotional need to collect. As long as debt collectors only demand payment or credit counselors want to make a better budget, the real issues leading to the debt are never ever addressed.

We all need to do a better job with this.

I could not help but bust out laughing on the phone today to one of my credit card companies. It’s one of those that always proclaims in the media that they are not irresponsible lenders. Worst part is that when consumers get into financial trouble they could care less.

A couple of weeks ago when Pam and I were in Rome, she accidently left her purse in the back of a cab. Yes, a most unfortunate event. Thankfully everything got switched off before anything bad happened but she is still bummed about losing the camera with all the pictures on it and the phone with all the friends numbers.

Since then I have basically been living credit card free since we’ve had to wait for replacement cards to arrive. It has been an awkward experience. Of course everything I had registered my business card with, one of the missing ones now, is being rejected and until the replacement arrives, all I can say to folks is oops. The good news is that the replacement cards arrived today and I called to activate them. That’s where this story really begins.

So it all goes like this. I call bank to activate card. I push a bunch of buttons but still must speak to a representative. The representative sounds like she is in India at a call center, which does not warm my heart, especially after recent examples of personal financial information being sold by some call center staff in India.

It was obvious that the representative was reading from a script.

Rep: Thank you so much for being a valuable customer Mr. Rhode. Before I approve your replacement card for activation I would like to ask you a few questions.

Me: OK.

Rep: In addition to activating your card today I can issue you a PIN number so you can take cash advances from your card at any ATM worldwide. Can I issue you a PIN?

Me: No thank you.

Rep: Would you like for me to send you some blank checks that you can use on your account?

Me: No thank you.

Rep: Do you have some balances you would like to transfer to your cards at this time?

Me: No thank you.

Rep: Would you like for me to go ahead and deposit some cash into your bank account for you to use?

Me: You’ve got to be kidding me. You want to charge a cash advance against my card and deposit that into my bank account?

Rep: Yes, would you like for me to do that?

Me: No way. No. No thank you.

Rep: Would you like to skip making a payment one month each year? You can pick the month. Maybe when things are tight? There is only a small monthly charge for you to be able to be eligible for this.

Me: You want to charge me a monthly fee so I can skip making a payment and you can rack up the interest charge that month?

Rep: Yes, you will be able to skip a month…

Me: Sorry to interrupt, no thank you.

Rep: As a special customer I would like to offer you our special credit and payment protection insurance to cover you in case you are unable to make your payment.

Me. No thank you.

Rep: Mr. Rhode, I can respect your decision but I think you should reconsider. This credit protection plan will …

Me: I’m sorry, I can’t take any more of this. Bye.

Maybe I should have let her finish but I was beginning to gag on all the crap that my bank wanted to shove down my throat as a "special customer".

It didn’t occur to me till I was writing this that my lovely bank was shoving all these crack credit opportunities at me without checking my employment status, checking my current income, or asking me any questions about my current situation. Just shove, shove, shove, push, push, push.

Can any sane and rational person be surprised that some people take advantage of some of these offers? I’m still speechless about the credit card company wanting to deposit cash into my bank account. We’ve got to ask ourselves, at what point is this kind of behavior so reckless that it is illegal? We are way past the line for immoral. Take a look into the mirror Mr. Credit Pusher and ask yourself when does the responsibility for responsible lending start?

Sometimes I go back and read an old post and cringe when I see a missed capitalization or punctuation mark. Or used your instead of you’re. That one catches me a lot. Thank God for spell check. I swear that my spelling has become worse because I rely upon it so much. It’s a bit like relying on a calculator rather than being able to do math in your head.

Maybe it is bravery, or stupidity, but I refuse to let my fear of making a small error in the message stop me from getting the message out. There is so much to be said, or shared. So many people around the world need a voice and awareness about financial issues, concerns and problems.

I’m not saying I’m great because there are a lot of people that are smarter and lead lives that are more connected at the most high levels of commerce and government. I guess what I’m saying is that at least I try to do something each day to put one foot in front of the other to raise education and awareness about problems and issues. At the end of the day I’d rather go down fighting with a voice than simply suffer in silence.

I urge and invite you to get involved in issues involving consumer debt by commenting on my articles and blogs and to participate in the discussions that matter. Share something most valuable, your informed opinion. I care what you have to say and others do as well.

A rare and savage attack of Mauve Stinger jellyfish at the massive sea holding pens has all but ended the business of the only salmon farm in Northern Ireland.

This unfortunate story serves as a good example of how people often find themselves in unexpected situations and income is lost or suffers greatly. More than 100,000 salmon were killed by the deadly jellyfish which are normally found in much warmer waters. Until the past decade, the mauve stinger has rarely been spotted so far north in British or Irish waters, and scientists cite this as evidence of global warming.

The attack on the salmon lasted for nearly seven hours with the jellyfish covering a sea area of up to 10 square miles and 35 feet deep. Workers from the salmon farm tried unsuccessfully to reach the sea pens to save the organic salmon and their jobs but the jellyfish were so dense that they could not reach the cages in time.

The financial loss is estimated at £1,000,000 ($2,100,000) and that it will take at least two years to recover. In the meantime the future of the business is uncertain. This is certainly bad news for the new company managing director who started just three days earlier.

Again we are served another classic example of why life is fluid but creditors and banks pin consumers to fixed mandatory absolute repayments which sink debtors in times of trouble. Flexibility and understanding are needed to help people like the dozen guys that are probably now out of a job.

On Unlawful Bank Charges. The Banks Think You Are Stupid. Are you?

So I just finished reading the 39 page Office of Fair Trading response to the bank charge court case going on against Abbey National, Barclays Bank, Clydesdale Bank, HBOS, HSBC, Lloyds TSB Bank, Nationwide Building Society, and the Royal Bank of Scotland Group. I would not suggest reading the document if you are in need of a nap.

What is quite apparent is that while the banks put on a face of caring about their customers they have clearly been caught with their pants down on banks charges. And don’t even get me started about the “screw the consumer” Payment Protection Insurance issues.

The amount of tax money (your money) that is being spent by the OFT in the investigation of bank charges and the pursuit of this case against the banks is ridiculous stupid. When does the insanity end with banks and financial service providers in the UK? Let me be clear, at no time and in no country is it considered appropriate to rape the consumer just for corporate profits. Banks may do it at will but it is not the mark of good corporate citizenship. I have no problems with banks making a profit, just not through deception and doublespeak.

I get the point that the actual cost of the rejection of a presented item is fractional compared to the actual charge levied and that in essence the banks have been profiting from those activities, and they shouldn’t have been. So the banks current position is to argue about what the definition of this or that is. It is shameful and a smoke screen.

The banks should just sign a no-contest agreement, admit to no blame and put a big deposit into a fund to pay out claims to consumers and be done with it. I’m afraid all they are doing right now is providing even more of a public spectacle of themselves to demonstrate that they could give a crap about the individual consumer and that customers are just an ends to a means. We know that’s the case, at least be adult enough to stand up and say that banks. Because while you keep putting on this face on congeniality and community service only to take grandmas money unlawfully, I can’t see how you’re acting differently than a con-artist.

I still struggle why some banks, like Citibank in Germany, only charge three euro’s or so for a rejected item but in England, not that far away and still part of the EC, it is almost ten times as much. WTF is that all about?

I can see a new advertising slogan. In the US there are slogans like “Milk, Does a Body Good”, “Pork, the Other White Meat” and now in the UK we can “Banks, WTF?” If you don’t know what WTF means, ask around. It’ll be worth it.

The debit card has an allure for many because it allows people to make credit card like transactions without the fear of debt but all of that comes at a price and a risk.

A debit card is not a credit card, obviously. With a debit card, transactions are paid from the cold hard cash sitting in your bank account and do not include and extension of credit, that is unless you run into your overdraft account.

The perception that a debit card is safer than a credit card is simply unfounded, especially when you are making online or international purchases.

Here is the problem. If someone gets a hold of your debit card information and uses it fraudulently, those funds get sucked from your available funds in your bank account. Just one incorrect or fraudulent transaction can set off a chain of events that can cause a world of financial hurt, rejected transactions and a heap of bank fees.

Consumers in the U.S. and U.K. both suffer under the illusion that a debit card is as safe as a credit card. It is not but your bank certainly wants you to think so but the law clearly differentiates.

Recent news from the Office of Fair Trading in the UK revels that the House of Lords has made it clear that credit card transactions must now protect consumers against misrepresentation or breach of contract when the good or service purchased is above £100 but no more than £30,000. That is good news for U.K. consumers.

There is no getting around the fact that a debit card is not as safe to use for purchases as a credit card.

Invariably when I talk to people about this they look at me like I’ve got snakes coming out of my head. “Certainly that’s not true”, people say. Their bank has done such a good job of convincing them that they WILL protect them from liability that people are using their debit cards in record numbers on the internet or for foreign purchases. But it is a voluntary obligation and not a legal one to protect you from fraud when you use a debit card. Read what the U.S. Public Interest Research Group has to say about debit cards or maybe the recent Office of Fair Trading release in the U.K. Be sure to look at footnote 2.

When you have a problem with a fraudulent transaction or purchase you made using your credit card, your bank will intervene on your behalf once you have brought the matter to their attention. This means that before you are obligated to pay for that transaction the bank will investigate the issue and may absolve you of any responsibility for it.

With a debit card the funds will be immediately withdrawn from your account and you will have to fight with your bank to get provisional funds replaced in your account while they investigate the issue.

In my investigation of debit cards I discovered that between 1%-5% of debit cards transactions are fraudulent depending on the debit card portfolio. Debit card fraud happens.

So if you want to make sure that you have maximum consumer and legal protection when using a plastic card to make a purchase, make it with a credit card and not a debit card, please.

Oh yes, a week ago I learned another obvious lesson, it is always better to show up at the airport on the day of your reservation, and not the day after. This screw-up left me having to purchase a same day ticket for my travel. Ouch! Thankfully I used my credit card for the ticket because they made a mistake and sold me a ticket to the wrong city. Completely their mistake but the credit from the immediate refund will take up to 7 days to process. If I had used my debit card those funds would have been gone from my bank account until refunded and even if the transaction had only been authorized and not debited, those funds would have been placed on hold until the authorization was released, days latter.

Where is my government to protect me from a messy financial accident? It occurs to me that the government has more rules and regulations to protect me from an unintended physical accident in a vehicle than to protect me from an unintended financial accident.

If you take the current bank attitude that people that have financial problems are thieves, liars and cheats we could transfer that to the car and say that people that are ejected and badly injured or killed when the seatbelt fails, deserved it. It makes no sense that in one part of our life the government fights for us when we are in the auto accident but not when we are in a financial accident.

Why does my credit card not have an air bag or seatbelt to protect me but my car does?

Certainly people are thinking about debt if they will spray it on a train.

Just when you thought you could not qualify for a loan.

I'm sure this will exist one day. Let me know when you find it.

A little read story recently may be a precursor of events to come in the credit card world if a conscience and personal responsibility carry any weight with credit card company executives.

For far too long credit card issuers have placed profits ahead of social responsibility and have spewed credit cards over the past recent years to people that never should have had them in the first place.

While the benefits of having easy access to credit helps us all by boosting the performance of an economy based on the power of consumption, we can’t lose sight of the fact that the collective “we” is made up of lots of individuals known as you and me. We are the people.

When credit card lenders, hell, all extenders of credit, open the spigot to easy credit, what they do is shift the need for this quarter’s corporate performance onto the backs of people that either don’t want to recognize or can’t recognize when they should or should not take advantage of access to credit.

Extending credit to sub-prime candidates comes with a risk of ruining lives but credit card companies never seem to take that into account. If these companies insist on mainlining credit into the veins of everyday people they should be legally required to offer a real way for people to get out of excessive debt without bankruptcy.

Let’s look at former BestBank owner Edward Mattar who swung a hammer with force the other day and shattered the window of his 27th story apartment window so he could leap to his death. What was left of his disfigured body was positively identified using fingerprint records.

Mattar was facing 14 years in prison and the forfeiture of millions of dollars at his fraud sentencing Friday. The bank he once owned was seduced into what felt like a magic solution for easy profits as his bank paid high rates of interest to attract deposits, then turned around and issued more than 500,000 credit cards to credit-challenged borrowers. As losses mounted, Mattar and fellow defendants hid the numbers from regulators while receiving performance bonuses.

With the wind of subprime troubles blowing it is only a matter of time before a major bank begins to disclose the funds they will need to set aside for their portfolios of bad and poorly extended loans and credit cards. BestBank won’t be the last bank to be caught up in this mess.

What truly hurts is that banks make poorly thought through decisions by chasing profits and then put the burden of responsibility on the sore shoulders of consumers, requiring them to bear the burden of responsibility for excessive debt. In fact what the banks are doing is nothing less than abdicating their moral and corporate responsibility of proper loan underwriting onto the lives of the very consumers they once approved as good candidates for their interest based products.

Consumers are then made to feel like second-class citizens when they find themselves in financial trouble and unable to meet the obligations the banks placed them under by allowing them to suckle at the teet of easy credit. People laboring under the burden of financial misfortune suffer from depression, damaging stress, ruination of relationships, dissolution of marriage, loss of employment, suicide and much, much worse, and for what, so banks can maximize their profits?

The loss of a single human life unnecessarily is tragic but wouldn’t it be nice if the tables were turned on lenders and instead of the lives of consumers being ruined and castrated by irresponsible lenders, it was the lenders that suffered the loss of respect of their children, personal shame, loss of self-esteem, loss of self-confidence and made to feel like the loser.

I challenge all lenders to stop for a moment and contemplate your role and responsibility in the easy extension of credit and to look yourself in a mirror and ask if this is the way you want your precious children to be treated when they grow up. Will you be proud and feel comfortable when your pride and joy is the target of a slick advertising campaign to put easy credit into their hand and the lender will not offer a reasonable way out of debt when they fall into the trap of easy credit?

Mr. and Mrs. Banker, what role do you individually have to protect your customers rather than sacrifice them over the pit of profits?

Interesting message on this T-shirt outside the Pantheon in Rome.

Have you ever noticed that society seems to define people with money troubles as only those that can’t make the monthly payment? What about the functionally poor. Those people that make enough money to pay their bills but pay so little attention to their spending or finances that they are never late, but never ahead either.

A person can be a debtor without making friends with the collection people. It is possible to do so horribly with your finances that you rob yourself of life opportunities and fun and after all isn’t that the major consequence of debt, lost opportunity?

It is interesting that people see no problem with hiring live-in caregivers to raise their children, personal chefs to cook meals, gardeners to manicure the lawn and housekeepers to help keep things tidy. But when it comes to our finances; who keeps those neat and clean for us?

People of wealth have financial professionals that watch over the books for them and keep things headed in the right direction but people in the rest of society feel that professional money management is unnecessary and an expense not worth paying for. I wonder if that belief is why they can’t make their money go further and have to work harder for it?

In the past, the daily money management in the U.S. or the AllPaid approach in the U.K. has worked best for busy professionals and attorneys, doctors and police officers. The lawyers and medical doctors often worked long hours and just wanted their finances managed well. They also understand the value of a professional service. Police officers on the other hand, I guess it is just a stress elimination thing for them. Coming home after a hard shift dealing with bad people, who wants to deal with the bills after that?

So what shall we call this concept of debting without poverty? Anyone got a good name for it? I’m open to suggestions.

The major problem with debt is not that you get collection calls and a bad credit report. Nope, the big problem is that debt robs you of life. When you go into debt or spend recklessly, you have to earn more and all you are doing is sacrificing future labor to make up for your financial management inefficiencies. At the end of the day all that is lost is the opportunities and possibilities that you would have had if you kept a grip on money that need not have been spent.

Now I’m not talking about labeling expenses like cut flowers as a ridiculous expense, in fact, quite the contrary. If you can use money to bring joy into your life then that’s a great use of money. But in my belief, unconscious and self-medicated shopping does not fall into the same category.

When we overspend in an effort to hide or medicate ourselves from the underlying issues, that just becomes like yet another bottle to crawl in to. It’s an escape and a numbing agent and not a bringer of joy and happiness. As one client told me once, “Shopping is my heroin and the credit card is the needle.” Oh so true.

Another example of this concept of debting without poverty is the therapist that was so busy with her practice that when I examined her bills in detail I found out that she was paying double for a home alarm service, paying for satellite television she was not receiving, was on a high rate long distance plan and was spending way too much for her mobile phone because she was using additional minutes.

When I pointed out all of this to her she kept saying that she had not paid attention to these issues or even looked at her bills because she was so busy earning money to make ends meet. The amount of money she wasted was huge, but she was not delinquent on her bills.

So let’s stop thinking about debt as delinquency and instead focus on debt as a sacrifice of future life energy. If you could, wouldn’t you rather work less so you can take longer vacations or have more time to do the things you want? I would.

You can be a debtor without poverty. Are you?

In a move that will likely go down as one of the most short-sighted in UK debt management history, Insolvency Practitioners have missed the boat on protecting income by not speaking up early enough about unfair and unreasonable creditor behaviour and losing control over the fees charged in Individual Voluntary Arrangements. [Read More]