Today is Blog Action Day! That’s when bloggers gather together around the internets and write about one single issue. Last year the subject was “Environment,” and I penned what I consider a stunning piece titled “Its Not Easy Being Green” – dissecting the hypocrisies and paradoxes companies face when engaging in “green marketing.” I think its a pretty good article – and popular travel blogger Tim Leffell referenced it when discussing carbon offsets. You should go read it – because my hastily assembled piece for this year is far from the same caliber.

Unfortunately I didn’t really put much time or thought into poverty this year. I’ve been too worried about becoming poverty stricken myself watching my 401k balance bounce up and down like an escaped hub cap before it eventually rolls down the street and into the sewer. I don’t carry the global knowledge or experience to opine about third world debt, food shortages, water cleanliness, or how to directly solve the issue of extreme poverty. But I do know something about an issue that affects millions of Americans: DEBT. Whether due to irresponsible and reckless spending, or due to unforeseen financial circumstances, debt CREATES poverty in families across our country. Debt is masked poverty, and lurks unassumingly in the shadows until it jumps out to attack you. With this past year’s wave of foreclosures its become glaringly obvious how little financial contingency many Americans have. Although acknowledged and addressed by the media and lawmakers I don’t believe it garners the attention deserved, and is an issue which amasses an incredible amount of hardship.

DEBT will make your life miserable and put you on the fast track TO poverty. Unfortunately for many Americans its difficult to escape the competitive materialism and aggressive consumption that’s associated with our culture. No thanks to “Cribs” and “My Sweet 16″ either. Growing up in Michigan I saw people constantly striving to keep up with the Joneses. That usually meant buying boats. Sometimes two for some reason, but lots of people had boats. And new cars. Everybody was constantly buying new cars. I wasn’t smart back then, and fell into the trap of collecting debt through my early 20s. I moved to high priced California, with a low paying job and an apartment above my budget. Of course car repairs and other hefty bills came up, and for years I relied on credit cards to float between paychecks; paychecks which never covered my floats.

Eventually after moving back to Colorado I wised up financially and started burying my debt, one tiny coffin at a time.  I did some settlements with a couple credit cards, had a better paying job, and combined with living below my means I eventually paid the rest off  Other than my house remain debt free to this day. But part of the transition was a very important mental shift. I realized I enjoyed traveling and exploring life rather than status and how others perceived me. Not caring about the need to impress, or obligated to maintain an image is what really allows you to bound ahead. That’s the most difficult part of killing debt, and involves much more than the oft repeated “Don’t by Starbucks everyday” tip.

I’ve said before that the concept of the “consumer confidence index” baffles me. The index rises and falls based on retail profits. However these profits are based on the spending, (or sacrifices,) of millions of individual consumer dollars around the country. Your OVERSPENDING creates healthy economic numbers – but your MICRO/HOUSEHOLD index falls as bills mount up and any buffer of personal capital decreases. I was zoning out during last week’s debate, but perked up when I heard Obama reference George W. Bush’s post 9/11 call to action of “Go Shopping.” The absurdity of that hit me the moment I heard it back in 2001, and I was very happy that Obama addressed it. He understands the RIDICULOUS correlation, and that Bush’s “Go Shopping” directive ultimately HURTS the individual or family.

High schools need to start educating kids from an early age about PROPER MONEY MANAGEMENT. Its as important as home ec and woodshop. Money management and avoiding financial traps are more important than ever. We need to teach kids the “wants versus needs” scale, especially if their parents at home are leaded down on the “wants” side. 16 to 18 is NOT too young, especially considering the deplorable act of credit card issuers setting up card tables at colleges hawking credit to 18 and 19 year olds. These kids, who are in college and work at pizza joints, are (or were,) being given $10,000 limit cards. The credit card companies bank on the fact that their parents will bail them out. Kids who don’t have rich daddies find themselves thousands of dollars in debt, (in addition to their student loans,) before they even graduate. Many campuses have taken initiative and banned this practice, but many haven’t. Even with our miserable economy credit card applications are everywhere. Readers of the Consumerist send in amusing photos of how little your credit reputation is really worth, such as this example of offering a mere two liter soda your your complete personal application.

Its easier said than done, but everyone’s money management system should consist of this Steve Martin SNL skit titled “DON’T BUY STUFF YOU CAN’T AFFORD” Granted some debts are hard to escape. Not everyone falls into debt because they’re overextended on their bling. Medical bills are the leading cause of personal bankruptcies. Based on this fact I don’t support laws making bankruptcies more difficult to file. In freewheeling capitalism personal responsibility makes a strong case, but the reckless and unregulated giving away of money by banks and mortgage companies deserve blame as well, especially when the havoc they’re caused hits regular frugal hard working folk.

After purchasing my house a few years back we did some improvements and refinanced. It was appraised at $30,000 higher than the purchase price, and for two years or so I received almost daily mailings from lending companies ready to fork over that equity. “Take that cruise,” “remodel your kitchen” the cheap stock cards would say. I knew better than to trade in my savings/equity for short lived thrills, but if they hadn’t made a beeline for the dumpster who knows if I’d still be living in my house. Its important to educate consumers, especially young people, that lending companies are NOT your friends and DO NOT have your best interests in mind. Think like a company and watch YOUR bottom line. Make the black exceed the red. That’s it. if you aren’t doing that then you as a business are in trouble.

I do believe people are starting to realize that “stuff does not equal wealth.” I think of someone who is “upside down” in their cars and home, (or homes if you’re the McCains,) and then compare them to a homeless guy on the street. People usually feel sorry for homeless folks, being down on their luck and all. But I wonder why the person who’s maxed out on credit and triple mortgaged isn’t in fact jealous of the homeless man? The homeless man is at zero, with perhaps with a tiny fixed income coming in from somewhere. He may be in sad financial shape, but at zero he owes nothing to anyone. Any capital that he takes in, whether a quarter from a passerby or $5 from a lottery scratcher ticket puts him in the black. I try to think of that when attempting to save money.

Admitedly I’m not perfect at saving, and I believe its ok to indulge. You can’t go through life squirreling away nickels under your pillow and eating cold oatmeal. I engage in what I call “selective spending.” I eschew certain material desires in exchange for others. My other half and I share a car. We own a modest size home, but live in a neighborhood where its easy to bike around and use transit for errands. We eat out sparingly, but make it worthwhile when we do. I like nice clothes, but I’m patient and can find G-Star or Deisel on ebay. I rarely visit the mall, and I definitely don’t “therapy shop.” (I prefer the more socially acceptable Therapy Drinking.) However I love traveling, which I consider a worthwhile vice. I bike to work and don’t mind taking the bus in exchange for living somewhere different or exotic a few times spread throughout the year.

I started living simply so I could travel and explore more – thinking that at the end of my life I’m not going to remember a plasma TV or a 2009 Audi. So far I’m satisfied with my choice. Experiences are far more rewarding than stuff. Getting my pilot’s license was a toss up: One of the coolest things I’ve done, but made the wallet bleed like a shark attack.

Resistance is not futile. You CAN live simply. In the past six months I’ve read articles across many blogs and news sites promoting and celebrating the “scaling down” of our culture. People who used to turn their noses up at thrift store are becoming bargain hunters. Many are discovering the joy of cooking at home and preparing meals with vegetables they’ve grown themselves. The high gas prices over the past year have forced people to reexamine their cars, trade down, and consider alternative methods of transportation. Perhaps this horrendous financial crisis will ultimately limit the amount of debt one can amass, and by proxy force people to start living rather than spending – and finding lifes more simpler pleasures in the process.

Save money, spend selectively, and every day balance your wants versus your needs. That’s how you avoid poverty. And keep your house.

by James Van Dellen