The root problem, I think, is that most people have bought in to the advertising that you can "have it all." We are a nation of conspicuous consumers who buy the hype that is broadcast to us on a daily basis. Ipods, Iphones, computers, cars, vacations, clothes, accessories, you name it, it's hawked to us and we buy into the ads that tell us we should have it. People live off their credit cards. The latte they buy today on their credit card, they are still paying for a year or more from now. There is no way to get ahead unless they stop using the credit card.

I'm in a similar situation as you, but I eat frozen meals instead of eating out. But I have myself on a budget which I follow as closely as possible. I also pay cash for everything except my mortgage and utility bills. My gas is paid with my credit card (so that I can get air miles) but the money to pay for it is in my checking account waiting at the end of my credit card cycle. I've found the method of paying cash for everything is the most effective and has made me much more aware of what I spend. And when the cash is gone, I can't buy anything else so I'm very careful of what I buy. The concept of wants vs needs is at the forefront for me.

I whole heartedly agree with all you have said Noanie. The only reason I do not do the frozen dinners is the high sodium and preservative content. Although a lot of my out meals are just as bad.

I just hate driving for an hour to get home and then have to prepare a meal. I've been trying to cook more on the weekends so I have leftovers during the week because as you mentioned the sodium is very high in the frozen meals. One of the pitfalls of being single.

I think maybe the problem is fixing itself... the low employment rate and higher costs are forcing people to 'downsize'. I think Noanie is right on... there is no peace of mind like living within your means. I'm a single mom, but I've been blessed with enough and have always shunned any debt besides house and car.

It's the story of the ant and the grasshopper told over and over again.

I planned my retirement fifteen years ago. I knew where I wanted to be when I retired, I knew what I wanted to do when I stop working, and I knew what I needed to do to be absolutely debt free. Did I reach my goal?

I answer with a big YES!

As you have pointed out, credit card debt is a killer. If you don't have control over that, it will hit you hard for ten plus years if you're lucky.

People fall into the rut of buying a new car instead of buying a good certified used one with an extended warranty. They also live beyond their means. I tell people all the time, don't increase your life style every time you get a raise. If people would take the raise that they get and put that into paying off debt, they will be debt free in less than sixty months.

How? you ask. Here is an example:

Let's say you make $50,000 per year. This year will will get a 10% raise this comes in a form of basic raise 3-7%, plus bonuses and commissions, etc. This means you will have an extra $30,000 in five years. If you have credit card debt of $20,000, you can pay that off in less than that time. How? you pay off the highest interest rate ones first, consolidate the small ones into the low interest rate ones. Use those "no interest" transfers strategically. Poof, you're out of CC debt.

Now, take that extra $400 - $600 per month that you were paying on CC debt and put that into a IRA/401K/ING account and now your money is making money.

O', add to that the "latte factor" aka lunch money saving program. Many people do not realize how much they spend by "buy lunch, snacks, and beverages" at work adds up.

Example: You spend: $4.35 SBUX in the morning, mid morning you hit the vending machine $3, Lunch $8, afternoon vending snack $3, $4.35 SBUX on the drive home. Total: $22.70 per day x 5 business days = 113.50 x 52 working avg weeks per year = $5,902.00 x 5 Years = $29,510. Now, lets say you both work, well multiply that by 2 = $59,020.

OBSERVATION

One of your paychecks goes 100% towards daily "at work" expenses. This figure of course does not include the cost of getting to work, add another $100.00 per week.

SUMMARY

You can get yourself out of your own trouble if you make a plan and stick to it. This is no new news I'm posting here. You've heard this time and time again. No one makes you go to the vending machines or make you to out for lunch.

It's simple, sit down and map out what you "really spend" in a day, week, and month. Leave out nothing. You'd be surprised how much you don't know about your spending habits.

As you can see by the simple outline above how expensive something as simple as a "bad daily spending habit" can get.

Me, I'm debt free. I own everything except my house, which I bought with a hefty down payment from my previous house sale two years ago, and I have a 15 year mortgage, so 13 more to go and I own it.

You can do this. Just do the math in an excel sheet and you will see how to get to the end with the same money you have now.

This is were I live and I planned this:

http://www.robson.com/page.cfm?name=PebbleCrk_

This is my car 2001 Cadillac DeVille, I own it:

http://www.johnholtcadillac.com/testdrive-review.aspx?year=2001&make=Cadillac&model=DeVille

You can do this just like Richard U and I have posted here. Trust me, it can be done.

~Jonathan~

Richard--does the boat for sale figure into your current economic situation? ;-)

Noanie--everything you say is true.

Jonathan--more facets to you! You sparkle that much more. I agree with everything you say--with the slight exception to putting the money into retirement accounts. I know this is a bit of a fluke, but something to consider all the same. My ex lost 14K in his during the last quarter because it was invested (some mutual--as they often are)--mine was left in cash for some reason, and I lost nothing. :-) More humor than investment advice.

Also, being recently divorced, my finances are changing radically. Rather than even consider debt, I know I can live with much less and be much happier w/out the debt hanging over my head.

My daughter and her boyfriend are huge followers of--CAN NOT think of his name--and a very interesting fact that was pointed out to me was when we use credit cards, we are constantly at least one month in arrears. That was a sobering thought to me. The alternative is to budget and use cash. It's true--when the cash goes through your fingers, you notice it much more than when you swipe a credit card. Ignore those commercials that make you look like an idiot for using cash. No one makes money when you use cash, ergo--there is no marketing budget for that little gem. ;-)

(Jonathan--was just at Love Field, returning from visiting my daughter--no airport flirt. :-/ LOL)

Last year my salary stayed flat and this year I was given a raise but lost almost all my business reimbursements, which amounted to a net reduction, without figuring in increasing costs of everything. I am making up the difference by selling stuff on eBay.