U.S. Issues with Debt and Interest Payment

Here's a brief article on the current status of the U.S. debt of $39 trillion.

Bessent's Treasury has troubling news for every taxpayer

I expect the economy will be in deep doo-doo in the next few years, if not sooner, if the Federal government doesn't take action to resolve the debt issue.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial nor policy advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Pay Bills On Time

I always pay my bills on time.  

First, paying on time avoids penalties and interest which can add up quickly because it compounds.  In the worst case, these may exceed the initial bill over enough time. Penalties and interest on late or delayed payments is a death spiral I want to avoid.

Paying one's bills on time helps prevent living above one's means, which can be very detrimental to being successful at managing one's personal finances.  Right after college with a degree in chemical engineering, I worked for a Fortune 10 company.  I always paid my bills on time, even when I ran out of funds the first month working.  I had a friend who believed in maxing out her credit cards and paying only the minimum each month since she would have a higher standard of living.   Before long, her bills exceeded her take home pay and she took a second job as a in order to make ends meet.  Sheesh.

Doing so builds one's credit score and credibility with lenders, which is valuable.   My credit score typically is in the 800s.   As a result, I qualify for lower interest on loans, including  mortgages and car loans.  

Credibility may allow lenders to waive let fees for an abnormal missed payment by the deadline.  There have been a couple times I have been late.  One time, I mistyped the electronic payment and was off by a few dollars.  The credit card company charged me interest on the full amount even though I paid over 95% of the amount due.  I called in immediately and explained I had made a transposing error on the last two digits.   Also, I told them my record should show I always paid way before the due date.  The customer service rep did a one time waive of the interest charge based on my past performance.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial nor credit card advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Non Optimal Outcomes from Lack of Financial Literacy

I confess, I am a financial geek.   I enjoy investing our retirement accounts.  I enjoy analyzing ways to legally reduce our tax liability.  I try to maximize our fixed income interest.  I learn about new income opportunities.

I find almost none of my friends and family have the same level of interest in finances.   In fact, I have learned some have very little simple financial knowledge and almost no complex financial knowledge.  

Lack of financial literacy can lead to issues and sometimes catastrophes.

I remember many years ago, a friend told me her strategy for maintaining a higher lifestyle was to max out her credit cards and pay only the minimum each month. She rented a high end apartment, furnished it via credit card debt, and bought a new car.   Within a year, her expenses, including minimum credit card payments, were more than her net monthly paycheck.   For reference, she was a new hire chemical engineer and paid very well.  Her solution was to get a second job as a waitress to pay for her expenses.  I tried explain to her that cutting back on expenses would help also, but to little avail.

Financial literacy would help people avoid punitive debt problems such as minimum credit card payments, payday loans and exorbitant student loans.  Financial literacy may also help reduce the incidence of financial scams since many people don't recognize financial red flags of scams.  This leads to people being tricked by bank phishing, catfished for money, or involved with a hobosexual partner.  I've seen this happen to otherwise very intelligent people.

For more on The Practice of Persona Finance, check back every Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Maximum Amount to Borrow for Student Loan

The maximum amount should be a financial decision and not an emotional decision. Consider the impact it may have on your finances over 10 years after you graduate when deciding how much to borrow. IMHO, the best option if taking a loan is one can repay in 10 years or less easily. 

Here is a simple calculation to do before taking out a student loan.

I have read of two different rules of thumb.

1. No more than one's expected salary.
2. No more than 10% of expected take home pay.  

Assuming one's first job is $60,000 per year which is the average for a college graduate. Take home pay for $60,000 is estimated at $4,187 per month not including state income tax deduction.  

Rule #1 maximum is $60,000 borrowed.  That results in a $678 per month payment at 6.39% interest for 10 years.   That's 16.2% of one's take home pay.

Rule #2 maximum is $37,000 borrowed.  That results in a $418 per month payment since 10%  of $4,187 per month take home is $419.   

Both of these seem reasonable for loan payments.   However, what if the starting salary is only $40,000 when one assumed $60,000.     Now, one's take home pay is only $2848 per month.  Now the monthly payment is either 23.8% for Rule #1 or 14.6% for Rule #2 based on borrowing against one's expected salary of $60,000.  Ouch for following Rule #1.. 

With a recommended budget that has 20% of take home pay going to savings and debt, the above student loan examples would take about take up 50 to 138% of that 20% based on assumed or actual starting salaries.   

Instead of thinking of a student loan as an investment, think of paying off a student loan as a future budget item and whether the future payment is affordable.

Disclosure:  Student loans I took had payments of about 5% of my take home starting salary.  Although many years ago, I recall that percentage to very manageable.

For more on  Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, higher education, nor debt advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

My Solution to Reduce U.S. National Debt

Spoiler alert:  It isn't just increasing income tax revenue.

The U.S. debt is $37.9 trillion as of October 1, 2025.

U.S. debt per person is $111,437 for a population of 340.1 million

U.S. debt per household is $296,094 for 128 million households.

People think taxing billionaires will solve the issue.

Let's do the math.

There are 1135 billionaires in the U.S with a total net worth of $5.7 trillion.  The U.S. annual budget is 7.01 trillion with a budget deficit was $1.8 trillion in 2025 . Transferring all  $5.7 trillion would only reduce the national debt ONE TIME by that amount and the national debt would continue to grow.  

If taking all of current billionaires wealth doesn't solve the issue, then only having higher taxes on the rich doesn't either.

To solve the national debt crises, the U.S. needs to start reducing spending.  By a lot.  Like over $2 trillion a year.  Increasing tax revenue can be part of the solution, but is not sufficient by itself.

For more on The Practice of Personal Finance, check back every  Wednesday  for a new segment.

This is not financial nor national debt advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

The Curse of Easy Credit

Managing personal finances used to be simple, before the days of multiple credit cards and easy loans.  We earned money.  We paid mostly in cash, except for home and car loans.   We saved in banks.  If we couldn't afford it with cash, we didn't buy it.  Easy peasy to have good personal finance results.

Fast forward to today.   Don't have enough money to buy something.  There a lots of credit options. 

• Need money for everyday items or smaller purchases.  Max out multiple credit cards.  Buy now, pay later.    Split payments up.  Rent to own.   The temptation is that all these options are at NO cost if one pays them off on time.   People rarely pay on time which results in paying high interest rates.
  
  
• Need money for expensive items.   Can't afford to go to college.  There's money from student loans.  Car loans now go out to seven years and are often upside down on the day it's purchased.  These loans are great until one has to start paying them back.
  
  
• Need money sooner.  Get advances on one's paycheck, but at a cost.  Get a money advance on one's credit card.
  
  
• Want to gamble.  No need travel or have cash.  Go online with one's credit card.  One can go thousands of dollars into debt.

I made my daughter an authorized user on a credit card, but still had her pay her part of the bill.  She commented how much easier and quicker it was to spend money using a credit card. Managing personal finances requires good skill and discipline.  Today, there are too many temptations and opportunities to veer off a successful path.  

For more on Crossing Generations, check back every  Thursday  for a new segment.

This is not financial, credit card, nor debt advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Strategic Use of Credit Cards

I have have several credit cards and use them regularly.  Here are my do's and don'ts of using credit cards.

Do's

• Use the credit card as a substitute for cash available to spend.  Charge only what you can afford to pay with cash, i.e. pay off each  month.
• Pay off the credit card balance before the due date to avoid late fee and interest charges, which can be very high. 
• Favor credit cards that don't charge an annual fee.   If an annual fee is charged, select cards where the annual benefits (e.g. annual free hotel room voucher) is greater than the fee.
• Choose credit cards based on benefits such as cash back, reward points, benefits such as trip insurance.
• Use credit cards to build credit score, which lowers insurance rates and interest for car and mortgage payments.
• Check the statement at least every month to ensure no errors or mistakes.  

Don'ts

• Don't use a credit card if one does not have enough funds to pay off the charges by the due date.
• Don't use a credit card if the merchant charges a convenience or surcharge fee.   Pay with cash or check instead.
• Don't use a credit card if the merchant gives a discount for cash or check. Pay with cash or check instead.
• Don't miss the due date or only pay the minimum amount.  Interest charges will accrue.

Additional recommendations:

• Create an online account, which allows checking the account more than once a month to confirm purchase and refund amounts.
• Use bank bill paying services, which is usually free, to receive bills electronically, which is faster than U.S. mail,  and pay electronically which is faster and saves postage charges.
• Pay off balances weekly prior to receiving the monthly bill. This makes the charges feel more like using cash. 

For more on Strategies and Plans, check back every Monday  for a new segment.

This is not financial, spending, credit score nor credit card advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Turbocharge 529 Plan Contributions

Here's a hack I found that can increase your tax deductible contributions to a state supported 529 plan.  

In my state, contributions to the state 529 plan are deductible on a state tax return.  We started contributing the maximum to my daughter's account the year she arrived.  Unfortunately, this amount, even if contributed every year, would not cover her college expenses.    However, I realized that 529 plans could be opened for us, the parents, which enabled us to triple our tax deductible contributions, which tripled the amount of tax exempt earnings. 

In the future, we could transfer the funds to our daughter's account, avoiding tax consequence, if we kept the amount below the annual gift exemption.   Thus, each parent can transfer up to the maximum gift tax exemption ($19,000 in 2025) each year per child.

If there is money after college, the beneficiary can use up to $35,000 to contribute to a Roth IRA account.

Terrific benefits of contributing a 529 College savings plan.  Use the hack above to contribute, deduct, and earn even more than just contributing to the child's account.

For more on Ideas You Can Use , check back every Tuesday for a new segment.

This is not financial, tax, saving, 529 plan advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Financial Strategies that Helped Me

Here are some simple financial strategies that have worked for us and I'm sharing with my kids.

• Pay yourself first.   Put 5, 10, 15% or whatever into a savings account.  When I first started working, I would pay all my bills and expenses first and whatever was left at the end of the month was my savings.   Except for my first month of working, I was pretty good at having something left at the end of the month.   Later, I realized a better approach would be to take out my savings first, and then pay my bills and spend on expenses afterwards.
• Buy only what we need.  Marketers are adept at getting consumer to buy stuff.  The challenge to sort the needs from the wants.   Do I really need the best smart phone, cable TV, a large screen TV or a luxury car?  The answer is probably not.  Not buying these can reduce spending by hundreds of dollars one time or every month.  A related rule to this is to live below our means.
• Spend cash for everyday expenses. Using only cash is an easy way to limit spending.  Once the cash runs out, the spending stops.  A corollary to this is pay off entire credit card bill due every month.

OK, not everyone can follow these strategies.  But if one can, it is one path to a successful future retirement.

For more on  Reflections and Musings, check back every Saturday for a new segment.

This is not financial, saving, spending nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Like Father, Like Daughter - DIY Skills

I a big DIY and Fixit Dad.  It's part of my DNA as an engineer.   Before my daughter was in kindergarten, I used to have her help me assemble or repair things.   I also advised, but did not do, some of her physics and engineering projects.

My daughter is in college now, majoring in Biochemistry and Music Performance.   This year she is living off campus.  On move-in day, one of her roommates had the tension rod on her shower caddy come apart.  Her dad tried to fix it but could not. My daughter took over and repaired it.   He asked how did she know how do it.  Her reply, "My dad is an engineer and I watched him do things."   Made me proud.

I'm also including her in the financial aspects of paying for college education.  Ranging from how we invested to make it debt free to the paying for the cost each semester.  Hopefully, that rubs off on her in the future for financial skills.

Recently, I started showing her the DIY car maintenance that I do, since we will be lending her a car for this year.

For more on  Crossing Generations check back every Thursday  for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Student Loans - Just Say No

Student Loans are the worst consumer loans.

• Student loan debt is a crisis right now. 
• Student loans are offered to 18 year olds who usually have little financial understanding.  Often loans are used for living expenses in addition to college tuition.
• Many student loan borrowers are unable to pay off their student loans
• Student loans, except in extraordinary hardship, cannot be discharged by bankruptcy.

The Consumer Protection Financial Bureau, CPFB, ought to label student loans as Predatory Loans.

Here's my solution:

• Eliminate the federal funded student loan program.   Data shows that it leaves many borrowers with significant debt that they will not be able to repay. IMHO, this program is a failure.
• Enable future student loans to be easily discharged in bankruptcy.  Let the lenders/banks take the risk.

The result?    Tuition costs at many universities would be reduced without availability of easy money.   More people would consider alternatives to a 4 year degree.   Future graduates would no longer have onerous student loan debt for most of their lives.

For more on Ideas You Can Use, check back every  Tuesday  for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2024 Achievement Catalyst, LLC

Financial Mistakes that People Make

From ChatGPT:

There are many financial mistakes that people make, but some of the most common ones are:

• Not having an emergency fund: This can leave you vulnerable to unexpected expenses or income loss, and force you to rely on high-interest debt1.
• Paying off the wrong debt first: Some people focus on paying off small debts instead of high-interest ones, which can cost them more money in the long run1.
• Missing out on employer matching contributions: If your employer offers a retirement plan with matching contributions, you should take advantage of it as much as possible, otherwise you are leaving free money on the table1.
• Using credit cards for everyday expenses: This can lead to overspending and accumulating debt that is hard to pay off, especially if you only pay the minimum amount each month2.
• Borrowing money from friends or family: This can strain your relationships and create awkward situations if you can’t repay them on time or at all2.

1: CNBC 2: Investopedia

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2024 Achievement Catalyst, LLC

Higher Education Scam

For most students, a college education is not worth the cost they paid.

First, very few people can get a good paying job, i.e. support a family, with just a bachelor's degree in their major.   

Second, student loan debt payments far exceed what can be comfortably paid with a salary from an entry level job.

Third, the institutions that encourage the student to take or provide the loan have no vested interested in whether the student is able to pay back the loan.

Perhaps the government ought to pause the student loan program and address these issues before restarting the making student loans.

For more on  Reflections and Musings, check back  Saturdays for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Signal 30 Film for Potential Borrowers of Student Loans

When I took Driver's Ed in High School, we were shown a 30 minute film titled Signal 30.   It was produced -1959 by the Mansfield, OH police highlighting the severity of accidents when not driving safely.  Although it seemed extreme and unlikely, I remember thinking I never want to be in one of those accidents.

IMO, a similar type film ought to shown to potential student loan borrowers.  The film should feature the many student who complain that student loans have prevented them from a lifestyle they desired:  buying a house, getting married, having kids, taking vacations etc.   They also can talk about how they often have to make choices between food/rent and paying their student loan.

After watching this film, potential borrowers should be show what they can expect to earn after college and how much they will have to pay towards student loans before their other living expenses.  Students can then determine if they will be another story in the movie or if the loan will be worth it.

However, no higher education institution will do this since a majority of students would likely decide to not take the loan. That would reduce the number students able to attend college.   Conflict of interest.

 And if they do take the loan, they will know there won't be any forgiveness if they end up like students in the movie.

The mantra for student loans should be:  Just Don't.

For more on Crossing Generations, check back Thursdays for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Forgiving Student Loans Rewards Poor Financial Decisions

"In politics, stupidity is not a handicap."  - Napoleon Bonaparte

AOC's latest comment on forgiving student loans, to those that paid off their loans:  "We can support things that we don't directly benefit from."   That is true.  But taxpayers shouldn't be asked to support the voluntary financial stupidity of others, whether they be individuals, banks or car companies.  

Here's the irony of AOC requesting that her own student loans be forgiven.   Even though AOC owns a earns $174,000/year, owns a Tesla and maintains two residences, she has chosen not to make regular payments on her approximately $19,000 outstanding student loan.   She just continues to advocate for $50,000 student loan forgiveness, which would benefit her.

Sorry, anyone that can afford a Tesla doesn't need me to support forgiving their student loan debt.

For more on  The Practice of Personal Finance, check back Wednesdays for a new segment.

This is not financial, educational, nor political advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Great Advice On Whether to Take a Student Loan

Here's an article every parent and child considering attending college should read.

On college decision day, don’t sentence your child to decades of debt (msn.com)

TLDR:  Just say no.

For more on Crossing Generations, check back Thursdays for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

On Solving the Student Loan Debt Problem

 “If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and five minutes thinking about solutions.” ~ Albert Einstein

Here's how I would define the problem:

We give unlimited loans to 18 year olds who may choose a major that is unlikely to lead to a job that pays enough to easily cover the loan payment after normal living expenses.

My solution is to gather the data on pay that graduates of different majors get from their jobs.   Normalize living expenses for location differences.  Calculate the maximum loan payment a graduate can make, assuming wage growth over 10 years.   Set a maximum loan amount for that major by school.

Seems relatively doable to me.

I would do this work before forgiving any student loan debt.  Otherwise, student loan debt will become an issue again in the future.

For more on Reflections and Musings, check back Saturdays for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Avoid Getting a Student Loan

"I guess some mistakes you never stop paying for." ~ Roy Hobbs in The Natural

In my humble opinion, student loans are one of the biggest financial scams that is legal.  Student borrowers are not evaluated on ability to repay the loan.  Students are told the loan is an investment.  Students are encouraged to take a large a loan as needed to pay college costs.  Who is advising student borrowers?  It's usually the educational institution receiving  the money.

What should a student do if they can't afford a going to a college of their choice?   Choose a cheaper college is the first option.  If all four year institutions are too expensive, choose a community college for the first two years, live with parents and transfer after two years.  Or start working, go to college part time, and even have your employer cover part of all of the costs.  Finally, join the armed services and afterwards, go to college on the GI bill. All these options enable a person to get a college education.

The best part is one can avoid, or at least minimize the amount of, student loan debt.  This would prevent a student from becoming one of the many overburdened by student loan payments.

For more on The Practice of Personal Finance, check back Wednesdays  for a new segment.

This is not financial nor education advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Forgiving Student Loan Debt, Why Not All Debt?

Progressives continue to advocate forgiveness of up to $50,000 of student loan debt.   Apparently, excessive student loan debt is preventing borrowers from buying goods and helping the economy.  (Paraphrasing reason from Lizzie Warren, Senator from Massachusetts.)   

Let's assume that is true.    Then why not forgive all debt: mortgage, credit card, payday loans and car loans.   Without the burden of loan payments, these borrowers could then spend payments on other goods and further stimulate the economy.

As they say in Wall Street Bets:  Can't go tits up.   

On the other hand, does the economy really need more stimulation?   CPI was at 7% for December, the highest since June 1982.    Using Lizzie's reasoning, maybe we need to NOT forgive any student loans to keep from further stimulating the economy.

Key learning:   

• Except for a mortgage, don't borrow what one can't pay back.   Maybe not even for a mortgage.  
• Today's college education tuition is way over priced, cause primarily by availability of student loans.  Maybe true of cars also.

Final thought.  If I were in charge, I would allow new student loans to be eliminated by bankruptcy.   Institutions would then be more judicious about requirements to qualify for a student loan.

For more on The Practice of Personal Finance, check back Wednesdays for a new segment.

This is not financial, student loan, nor policy advice. Please consult a professional advisor.

Copyright © 2021 Achievement Catalyst, LLC

The Power of NO!

For us, a successful retirement has benefited from being able to say NO.

1.  No Debt.   We have no mortgage, no car loan, no outstanding revolving debt.   That has reduced our "required" payments each month.   My only regret is that I didn't pay off our mortgage right after retiring in 2007.  Instead I stayed invested and lost a significant amount of money in 08/09 that could have been used to pay off the mortgage, which we did in 2009.
2. No Living Large.  I drive a 17 year old truck and a 17 year old car, which we are saving for my daughter to learn driving.  My spouse drives an 8 year old car we bought from her mom, when she moved into independent living.  We take one or two vacations a year with the kids.   We have most of our meals at home, eating out a couple times a month.
3. No Supporting Adult Kids.   Both our kids are still under 15, but many of my retired friends are still providing some finanacial support to their kids, even post college graduation.
4. No Exotic Investments.   I have turned down various investments with "higher yields" and stayed with some stocks and mostly CDs and cash equivalents.   Yeah, we didn't beat the market, except for 2020 YTD, but we generally earned enough to cover annual expenses.

Of course, YMMV, but this approach has worked well for us.

For more on Reaping the Rewards, check back Fridays for a new segment.

This is not financial nor retirement advice. Please consult a professional advisor.

Copyright © 2020 Achievement Catalyst, LLC