Are You Prepared for a Credit Crisis?

(Originally published in Main Line Life on 10/16/08.)

As I was flipping through the morning talk shows trying to find some good news about anything, I discovered the reason our country is facing a financial credit crisis. I will take no credit for this (no pun intended) discovery. It is so obvious that even Barney Frank might be able to understand it.

It happened right after our president gave his now daily morning update that doesn’t make anyone feel better. When he speaks I want to stick pins in myself to make sure I’m not really dead and listening to this from another dimension of the time/space continuum.

The whole morning had been spent with talking heads and politicians blaming one another for the mess we are in. Doom and gloom of the worst sort. And then the commercial comes on. “Do you have bad credit? We guarantee you a car loan even if you can’t get credit anywhere else! Even if you are considered a bad risk! Come on down!” And then, “Need a mortgage and can’t get one? We don’t turn anyone down, even if you have bad credit!”
Isn’t there some kind of disconnect there? Let’s see – as consumers we are being told we helped cause the crisis because we are buying stuff we can’t afford on credit, yet even at this worst time, credit is being advertised on television to people who shouldn’t qualify.

Meanwhile, I flip through the pages of The New York Times and I see ads for $5,000 purses, glittery evening gowns, diamond chokers, and the latest must-have electronic gadgets.
Not that we need to schlep around in sackcloth pants and hemp shoes, but doesn’t this excess seem a bit, dare I say, excessive? Many of us are guilty of this “want, want, want, must have” syndrome. Maybe it is human nature. Maybe it goes back to how some of us were brought up. If your family was poor you vowed to get ahead, get a lot of stuff, and never look back. If you were brought up riding in limos and vacationing in Aruba, you want to keep the gravy train going.

Whether this financial crisis will indeed be a reality check for all of us remains to be seen. Right now it seems as though most people are still in blissful denial. With the holidays coming up, it will be spend, spend, spend – charge it and pay for it later. Immediate gratification will be the most difficult habit for Americans to break, and I’m not sure we can.

That’s why I would like to nominate my mother to be Treasury Secretary. My family has always joked that my mother could pinch a penny until it was black and blue. My sisters and I would roll our eyes in embarrassment when she pulled out her coupon file in the grocery store. Half the time we’d leave a store they would owe her money. Nothing in our family was ever wasted – gift-wrap paper and aluminum foil were smoothed out and re-folded, old socks and buttons were made into puppets, clothes were passed from one sister to the next. In the Sierra Club Museum, there should be a special exhibit dedicated to my mother, who did more for recycling than Al Gore ever fantasized about.

It is with this family background that I feel prepared for the current financial crisis. Even though I somehow ended up, against all odds, living in a beautiful home on the Main Line, living a life I only dreamed of as a young girl, I have the McDermott penny-pinching gene embedded in me. I hate to admit this but in my purse right now I have an embarrassing number of Frequent Saver cards, and two-for-one coupons for places I will surely never visit like the Amish Shoe Factory and the Three-Mile Island tour. And I only have to see four hundred more movies at the AMC Theatres before I get a free large popcorn!

It is inconceivable now that just one generation ago most people didn’t have credit cards. The only “credit” most families had was at local stores you frequented – you’d just sign your name and you’d get a bill later from the store owner, whom you knew personally. If you didn’t have the money, you simply did without. Now, there’s a new concept.

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