The True Cost
Written after I wrote the blog: Warning… this is a bit wordy. I just kept typing and rambling on. Soooooo read at your own risk. Also… I’ve had two beers. Soooo I’m generally little more verbose than normal when I’ve had a beer or two!
Tonight I watched maxed out. Well, that isn’t all I did. First I walked down to Christopher’s Neighborhood Bar and got myself a burger and a beer. I like to refer to the place as “Frippers”.
http://www.christophersaneighborhoodplace.com/
It’s a nice little place down the street. I decided to get myself a nice burger and a beer. I enjoyed it. I wasn’t going to go out, but I decided to “Splurge” on myself and treat myself to a good time out. Which by good time I mean, me chatting with the bar tender and eating my burger and sipping on my beer and reading a book on my Nook.
For me… that’s a decent night out. Simple pleasures for a simple man.
Why Frippers? Well… when my brother was little he couldn’t pronounce Christopher. We had a family friend named Christopher. And he used to call the kid Fripper.
So I’ve decided that I like the name Frippers. OR actually in truth it just reminds me of my childhood and this kid named Christopher. So I just like to refer to it as Frippers.
Most of the time no one except me seems to know what I’m talking about anyways. But that’s ok.
So Maxed Out is a documentary film…
I have a thing for documentary films. I really don’t know why I enjoy watching them so much. I know that for the most part they aren’t very factual or representative of the information they are giving out. The producers/writers/creators usually have an agenda that they want to push. It’s not bad really, it’s just something to keep in mind. The films are USUALLY biased to what the views of the team of people involved in the making and they definitely do not ever tell the whole story. They are generally lacking in depth and the data is, most of the time, flawed and misinterpreted. But not always. There are also some really good films out there that are just documenting the facts and presenting them. But this is the same for all media. Just have to use good judgement when watching.
But for some reason I just like watching them. I think I enjoy what I get out of it more. After watching a documentary film I always feel like my brain is on overdrive and it inspires me to think about things in a new way. So with everything I mentioned above I still feel like there is some good that comes out of it. Although I also get the same over drive mind from regular movies as well. So I suppose it doesn’t matter the type of movie I watch. It’s more the fact that it just sparks my mind and gets me thinking in high gear. Although most of the time my brain is in high gear anways. Unless I’m sleeping,, then it’s in low gear.
So the movie Maxed Out is basically about credit cards. It’s about debt. It’s about living the American dream, or trying to. It’s about not really being able to afford even the most basic things in life. Again like I mentioned before there are some things the director did with it that really tug at your emotions.
There are some scenes in it that especially play on your emotions and make you just MAD at the credit card companies. I don’t know. I think that yes it’s part the credit card’s for making it so easy to get a card. It’s also that we just have so many things to spend our hard earned money on. But I think ultimately it comes down to our choice to spend that money. I didn’t have to go out tonight. I had food here and I have a strict budget that I adhere to that makes it possible for me to move out and live in this place. I have bills and responsibilities. I have a savings, but that’s something I’d like to keep built up and build up even more. I don’t want to have to rely on that to live. But it was my choice to go out and splurge on dining out. How did I pay for it? I put it on my card. But unlike many of the subjects in the movie, I don’t ever carry a balance on the card. As soon as the bill comes in I pay it all off 100 percent in full.
Why use a card then?
3 reasons. Most people use a card because they don’t have the money up front and they need to borrow that money and then pay it back. Nothing wrong with that, but I think that’s how many of the people who use credit cards get into trouble. When purchasing a good or service there is usually hidden or unaccounted for costs. I like to triple the cost of anything. Generally the cost of most things is double or triple the cost. This is the true cost. In order to get people to buy things many marketing plans like to have the LOWEST cost in big letters and then have the rest of the fee’s and taxes and additions in fine print.
Here’s a quick example. A car. If someone wants to buy a car… they might say hey I just saved up 15 thousand dollars. I can stop riding the bus and start driving around in a nice little nifty go-mobile.
So, that person goes to the dealer and buys a nice little automobile for … let’s say 12 thousand dollars. And done. Look at that I have a car that I paid for. Now I can drive right? Well… no. Here’s some of the other costs that have to be paid for in order for that kind person to get from point A: to point B:
1: Gas – $1200 a year
2: Car insurance - $1100 a year
3: Maintenance, planned, such as oil change, and tire rotation - $200 a year
4: Maintenance unplanned, my transmission just blew up 1 mile after the warranty ran out – $500 a year…
5: Car registration other various fees - $100
6. let’s say you get a parking and or speeding ticket. OR you have to pay tolls as well - $$$MORE money
As you can see it’s adding up very fast. And think about if this person DID NOT have the 12K to buy the car in cash… now you have interest to be paid on the loan…
We won’t even go there.
If we are talking about owning your own home… well… that’s for another blog post.
It’s amazing that anyone can even keep their head above water. There are always SOOOOO many extra costs involved with anything we do.
Even just my dinner at Frippers tonight was 25 dollars when all was said and done.
25 DOLLARS! For a burger and a beer! This is what I mean by splurging.
Let’s break it down:
8 dollars for the burger
6 dollars for the beer 1 – I decided to get my favorite.
4 dollars for beer 2 – I decided that hey, it’s Friday night. I’m going to go all out and have a second beer! What the hey.
Tax…
Now we’re at like 20 bucks… of course I have to leave a tip.
So there we are. So from me looking at the menu…. To what I actually end up pulling out of my pocket.
Well, it turns out to be pretty pricey! Compared to that… oh look 8 dollars for a burger? I can swing that. Bill: 25 dollars?!?!?! HOW did that happen?
Everyone wants to get paid and this is true for you just as much as it is for the companies that you are dealing with. I don’t really think the movie made me hate credit card companies (or in the case of my example the bars). I think it just made me think again about why I use a card. So as I mentioned before I use one for 3 reasons… if I already have the cash to pay for a good or service then why am I using a card?
Well here’s why I use a card…
1: protection from unauthorized charges: With a credit card if something is purchased the money doesn’t immediately come out of your account. It goes on the credit bill. This means that I am not out in my checking (as with a debit card) that few hundred or thousand dollars. I have a little bit of protection and time to get that charage removed. Luckily for me I have not had this happen yet. Let’s keep it that way. So knock on electronics or wood…. I just knocked on real wood…. My coffee table next to the couch I am sitting on is made of wood.
2: Cash back. For every purchase I get 1.5 percent cash back. I don’t get weird points, or some strange store to choose gifts from. I don’t get some cash on some products. I have a card that gives me 1.5 percent cash back on everything no matter what I buy on every single purchase. This can add up! It’s not much. But given a year of purchases, this can mean free hosting fee’s for my website. Or maybe a month or two worth of free gas. Etc. etc.
3: The third reason is that it builds up my credit score. At least I like to think it builds up my score. But let’s just say for the sake of argument that it does.
So there you go. Used properly credit cards can have a positive use. But mismanaged they can mean trouble.
The most heart breaking part of the documentary was when the two mom’s are being interviewed. One mom talks about her son, and the other her daughter. These two college kids got cards early on in college and got into some pretty bad debt. After a few years they were in over their heads with credit card debt and kept it a secret from their family. They were simply to ashamed to tell anyone that they just couldn’t afford to pay it all off.
Both of the kids ultimately found that the only way out was to commit suicide.
It’s pretty horrific. No matter the situation keeping things to yourself is never a good way to deal with it. Humanity has gotten through some pretty tough times by brainstorming with a group of people. Sure parents/family members/friends might be mad initially. But I think eventually they will help figure out a way to fix the problem. If maybe these two kids had asked for help then maybe they would still be with us!
So if anyone reading this is struggling with debt, or any other kind of in over his or her head problem… seek out some help. Things in life always change. There is always hope!
Wow this is a pretty intense blog post. Anyways so yea the movie had a pretty big emotional impact on me, which was probably what it was supposed to achieve. I recommend watching it just as a sort of wake up call to your own finances.
Maybe think about how much you spend and where you spend your money. Do you buy things that you probably could do with out? Maybe that money can be put to better use elsewhere?
I think with all that is going on in the news about the government budgets we really can learn a lot from maintaining a budget and sticking to it. Really thinking about where our money is going and really valuing every dollar we earn. Credit cards and debt can be used in productive ways. But they can also be used in ways that can get us in trouble too!
Whoa… what did I just even write? Ok well It’s late… sooooo good night!
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