Printer Friendly

The big comeback.

Eric and Monica Davis, a ficticious "thirtysomething" couple, seemed to have it all. The senior mortgage loan officer and department store buyer spent the 1980s pursuing the American Dream. They owned a $400,000 home in Greenwich, Conn., drove two late-model cars and sent their two teen-age children to private school. Month-long Caribbean vacations were the norm, and only the state-of-the-art appliances and gadgets would do.

Then the bottom fell out. The commercial real estate market skid of the late '80s left Eric unemployed. With his health insurance coverage gone, Eric was forced to pay out of his pocket for needed medical care. And Monica, though still employed, found an anticipated promotion and raise put on hold due to company cutbacks.

Blindsided by their sudden $120,000 cut in income, the Davises are now inundated with debt. Overextended to the tune of $25,000 on their credit cards, they must contend with daily calls from creditors. On top of that, their savings account is shot, and there's no more credit available from the bank. The last few mortgage payments have been late, and it's doubtful that the next one can be met at all. Increasingly more desperate, the couple wonder how they ever got into such a mess and, more importantly, how they'll get out of it.

Sound familiar?

Even if your situation doesn't replicate the Davises scenario, chances are you know of someone's that does. The conspicuous consumption and economic confidence that personified the '80s led many Americans on an unbridled borrowing and spending spree. However, when the dust began to settle in the '90s, many found themselves teetering on the brink of financial self-destruction.

Federal Reserve economists cite a $3.4 trillion hole of outstanding home mortgage and consumer debt. Lulled into a false sense of financial security fueled by easy credit, consumers spent more while saving less. Moreover, rising debt outpaced personal income causing Americans to contribute more than 80% of their disposable income to bill payments by the decade's end.

Used in moderation, credit can be a useful and an essential tool. The goal is not necessarily to be debt-free, but to keep debt under wraps. Even if you are indebted, there are steps you can take to regain control of your finances--and your life.
COPYRIGHT 1992 Earl G. Graves Publishing Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:includes information sources; recovering from debt
Author:Baskerville, Dawn M.
Publication:Black Enterprise
Date:Jan 1, 1992
Words:379
Previous Article:Achieving growth in a slowly reviving economy: the B.E. Economists focus on measures to create a broader economic base.
Next Article:Family matters.
Topics:


Related Articles
Confidence & capital return to NY market.
Negative net absorption characterizes Manhattan market.
USC NEARLY BLOWS IT TROJANS LOSE 29-POINT LEAD, THEN SURVIVE IN DOUBLE OT\ USC 44, ASU 38.
3 CHEERS FOR THE `MIRACLE GIRL'.
SIMI VALLEY FEELS LIKE WINNER ANYWAY.
AVC BEAT: DEFENSE ALMOST RESCUES AVC : NINE FUMBLES IN OT LOSS.
COC FOOTBALL: CANYONS PROGRAM HAS A NIGHT TO REMEMBER.
CZERNEK'S ARM CARRIES NEWBURY : NEWBURY PARK 43 BUENA 42.
ROUNDUP : FIRST HALF SPARKS CANOGA PARK.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters