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ICFE eNEWS #13-13 - October 28th 2013

Financial Funnies

Some days I sit back and marvel at the way our government's financial situation is presented to us by the media and the politicians. It seems to me that when applied to our Government, all rules of sensible financial management are abandoned. In their place is substituted a system of "Funny Finances."

An argument could be made that, because we are not politicians or media types, we simply cannot understand the financial principles that our Government uses.

I think the only thing we do not understand is why the same principles continue to be used when they obviously do not work.

Have you ever thought about trying to apply the financial principles our Government uses to your family's finances? Let see how it works.

Bill says to his wife, "Jean, it is near the end of the month, and it looks like we are going to run out of money again. But this month it is even worse - we are not going to able to borrow to pay our bills like we usually do!"

"Are you sure, Bill?" Jean asked. "How about a fourth mortgage on the house, or getting the credit cards to increase our credit limit?"

"No, I already tried that. None of them will play ball with us! I just don't know why they don't understand that we need to be able to borrow to pay our debts. I guess they just don't care that our credit score will drop if we default on our bills. This is really a problem for us this month!"

So, Bill and Jean sit at their kitchen table most of the evening trying to think of some way to solve their problem. They call every one they know to try to borrow money, their immediate family members, three cousins, four friends, two neighbors, and even a couple of churches. All to no avail!

This couple is going to spend a sleepless night - what will they do?

One does not need to be a financial genius to see that Bill and Jean are focusing on the wrong problem. They are focusing on their borrowing problem, when they should be focusing on their spending problem.

If they would spend less than they make, there would not be a need to constantly borrow. The borrowing problem would disappear if they would solve their spending problem.

But this is not one of the principles contained in the "funny finances" system. Therefore, Bill and Jean's financial problems will never be solved - even if they find a way to borrow more.

This "funny finances" set of principles will not work when applied to a family setting. In fact, they will not work when applied to any setting, especially a Government setting.

All the media can talk about are the disastrous results that will occur if our Government does not find some way to borrow more. Their focus is entirely on raising the "debt ceiling," which will never solve our country's problem.

The real culprit is a spending problem, not a borrowing problem, so why don't we hear anything about establishing a "Spending Ceiling?" After all, if our Government were to spend less than it made, the "Debt Ceiling" problem would take care of itself.

Isn't that what our families would do to fix the same type of problem - cut our spending until it was less than our income?

I can hear so many people responding, "But Jim, You don't understand how the Government works. It is just not that simple!"

My response? "It could be."

me

©Jim Garnett. The information on this site should be understood to be a general discussion of the subject matter and DOES NOT constitute a legal opinion about the situation. For further information please consult a qualified attorney.

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© Jim Garnett, The Debt Doctor
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Sent by:

Paul S. Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

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Copyright ©  1997 - by Paul S. Richard
and the Institute of Consumer Financial Education, All Rights Reserved.
View our
Privacy Policy Our Terms and Conditions

Institute of Consumer Financial Education
PO Box 34070
San Diego, Ca 92163
Paul S. Richard, Executive Director
Phone 619-239-1401

FAX 619-923-3284

Questions for www.financial-education-icfe.org Click to go to Website Contact Us or 
Website Design Donated by Desgn School Programs