I received a comment from someone regarding the rates back in the late 1970s, early 1980s.
I was working in a financial institution at that time. I remember interest rates soaring on some loans to somewhere around 32% interest and rates on investments being around 24%.
This was a time that was great for people who where looking to invest and a horrid time for those who had debt. It was an extreme shock to those whose interest rates rapidly increased on their debt and created such a hardship.
I remember seeing people who lived “high on the hog” and took winter vacations every year lose their land because of the fact they lived beyond their means.
On the other hand, I remember a small farmer with a quarter of land lose it through no fault of their own. It just became impossible for his family to survive on that quarter of land, no matter how hard they tried-and they definitely did not live beyond their means.
I believe there are measures in place today to ensure that interest rates will never go that high again, however we need to get our spending under control while the interest rates are low and we need to plan for those increasing interest rates.
We need today to get rid of those high interest or high payment credit cards and free up some cash for emergencies.We need to not purchase “wants” until we have the cash to do so rather than put it on a credit card.
We need to, if we can, consolidate our higher interest debt into a mortgage with a guaranteed rate for, at least for five years. In that 5 years we need to put the money that we save on the interest into a savings account, spend it on “needs” versus “wants”, and/or pay down extra on the debt we have.
Times are tough today for many families and many have gone from having a two income household to perhaps no funds or a different lower paying job.
If you want to change your financial life, and are not sure how to start, send me an email at email@example.com telling me your closest city, your email address, phone number and a bit about your situation and I will see if I can find someone to help you with this, whether it be consolidation or debt counseling or other means.
We need to prevent the 1980s from being revisited where possible. Let’s face it-they aren’t here interest wise, but there is still the same survival crisis today as there was then and I hate to think what will happen in people’s lives as interest rates start to rise.