Me Knows Better Than to Say This… but I will. Not sure I want to disclose all my finances
here, but Jimmy is in some deep, deep financial trouble. Bottom line: My outflow of cash is a lot more
than my inflow. I know everyone has this
problem… but not to this level I hope. Solutions
anyone?
It started in 2008 before the Great Recession hit. Jimmy was making about $75k a year, and
perhaps overspending a bit – like an extra $14k that year. Hey… I was taking care of grandma and needed a
home security system – tough neighborhood you know. The banks were good and they let me borrow
whenever I needed it.
By 2011, over spending had grown and Jimmy compounded it
with an income drop to about $65k (tough economy out there). It was all living expenses, but it still wasn’t
enough. Grandma was eating more than planned and then
we brought in a couple of relatives from Canada to live rent free in the
basement… and oh - the yearly home security fee was continuing – should’ve read
the damn fine print on the contract).
But even with those problems, Jimmy decided to go GREEN and
add a solar panel system for the house thinking it would have a good return on
investment. I didn’t realize it would cost
$15k by the time we got it installed and since this is northern Minnesota, it
didn’t work that well and soon I had to scrap it out for pennies on the dollar. Someone should’ve told me it was a bad
investment, but it was a friend’s company and I owed him a favor… he helped me get
my job down at the government center. He
said it was a good investment (for him apparently).
After that, I still had an itch to buy something else. I was way over my limit, but what the
hell. I heard GM was desperate. Why not buy that brand new Chevy Volt that I
had been eyeing… great deal. Got it for
$35 grand – fully loaded. Then the
battery caught fire. All that remained
was a smoldering carcass of a car – but the UAW, the new owners of GM, wouldn’t
return my money.
But the good news… the bank let me put the entire $50k for the
car and solar panels on my American Express so I could defer the payments… I didn’t have the money so what choice did
they have. They called me a “Preferred
Customer.”
However, in order to help defray that extra $50k of spending
in 2011, they asked me to start cutting some costs. I took their advice and decided to skip my morning
Starbucks run. No more Grande Mocha
Espresso at $4.50 a pop. As a reward for
my thrifty ways, I kept my afternoon Frappucino in the budget. That Espresso alone saved me $1155 in 2011. I tell ya, it’s a sacrifice every morning without
that Espresso. You try getting up at 8:30am
every morning to get to work a little after 10 at the Department of Redundancy
Department to hand out welfare checks and then rush off at 2:30pm to beat rush
hour.
Oh, did I mention the extra $50k for the car and solar
panels brought my American Express to a balance I owed to $428,130? Wow… almost a cool half million dollars. All I had to do was curtail my Starbucks
habit and everybody was happy. Then the
bank sent me a new Platinum VISA, said I was a good customer during their tough
times, and they upped my limit. God
bless the Fed.
OK – Jimmy is not that stupid. If you couldn’t read between the lines, here
is the secret: Multiply the key numbers above
by 33.3 million. These are the actual
numbers in the US Federal Budget for 2011 (and 2008). Now I hope we can agree this is stupid. So the question is, do we have a spending
problem or a tax problem? I think it’s
time to investigate and then you can decide which it is.
See my next blog as I take a look at the data. Curious to see what your opinion is... Not enough taxing or too much spending? Careful what you write, I think the results will intrigue you.
For Part 2 -
http://meknowsbetter.blogspot.com/2012/10/jimmys-sobering-look-at-budgets-part-2_25.html
For Part 2 -
http://meknowsbetter.blogspot.com/2012/10/jimmys-sobering-look-at-budgets-part-2_25.html
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