Digging through my piles of personal-finance books this weekend, I came across the very first money book I ever purchased: Carol Keeffe’s How to Get What You Want in Life with the Money You Already Have (1995 edition).
It really is quite amazing how much different the advice can be from one author to the next. On page 111, Ms. Keefe summarizes why she advocates paying only the minimums on installment bills:
What? Diffuse the emotional grip bills have over us? That sounds precisely like the kind of psychobabble crap you’d get from an author who’s made her paycheck by telling people what they want to hear. (It’s what the guys at Chase and Citibank want their customers to hear, for sure.)
I didn’t think much, one way or another, of this advice back when I first read it. It didn’t make much of an impact on me, apparently, because not long thereafter I was back at the bookstore, buying copies of other (better) money books. (If memory serves, Mary Hunt’s Debt-Proof Living and Joe Dominguez’ Your Money or Your Life were the next guideposts on my debt-free journey. Both were, and are, fantastic.)
What Keeffe advocates in her book, to be fair, is that one should pay the minimums on all bills until s/he has six months’ salary tucked away in savings. At that point, s/he won’t need credit cards any longer for month-to-month living and emergencies — making it easier to get rid of the things once and for all.
FACT: When you take your focus off the bills and pay the minimum, the installment bills do go away.
FACT: You can do it.
FACT: Paying the minimum will make you want to quit using the cards and start living in the present.
FACT: By choosing to pay the minimum on your credit card bills, you are taking action that says, “My goals and I are more important than the bills.” You have taken charge.
I’m sorry, but Ms. Keeffe is reaching into the realm of the absurd. Readers who take this path are playing right into their creditors’ hands.
Obviously, we’re all different in how we react to money. Perhaps Ms. Keefe’s advice would work for someone out there. Like all finance authors, she has plenty of satisfied-client stories dabbled throughout the book.
But there’s a reason why card companies love customers who make minimum payments. And for an author to advocate that people do this for an extended period — how long would it take most folks to save up SIX MONTHS’ SALARY? — strikes me as … pathetic. And ridiculous.
I suppose I could give this book away, but I won’t. Probably better that I keep it stuffed in a dismal corner of my bookshelves, never to escape and/or pollute the mind of some naive debt-choked consumer who thinks How to Get What You Want in Life actually offers a valid way out.