A new year brings new hope and a reason to give thanks. I am grateful for good health; for the love of my family; for a career that remains interesting; and for the dreams of deeds yet undone.

I won’t gush about all my resolutions. Best to work on those quietly because many good intentions come to naught and it is difficult enough to survive disappointment privately without having to parade around one’s failures in public.

But I do have one watchword for the 12 months ahead — frugalty. Last year I finally brought our household spending back dowb into line with our income, and liquidated all debt with the exception of a reasonable mortgage and one very odd loan – the terms of which reveal a good deal about the unsustainable insanity that is the American banking system.

It was about two years ago that I first realized why I had trouble each month paying the bills, and the reasons traced back to the dot.com boom when I developed a series of freelance writing projects that temporarily boosted my income by a good 20 percent. I’ve always thought of myself as tight-fisted, but during those boom years our family cranked up its spending to match the income. When the freelance work dried up, the home equity boom allowed us to dip into the soaring appreciation of our San Francisco Bay Area home.

By the time the easy money started drying up in 2005 I wasscrambling to meet the monthly bills and the annual hits, such as property taxes and insurance and the year-end spending obligation into which the birth of Jesus has been transformed. Last year, with some help from my wife’s part-time job (as executive assistant to a local inventor) we got rid of the credit card debt we had been carrying (our family is median, in terms of income, and had also, sadly, been carrying the average plastic debt of several thousands of dollars.)

So we wiped that out between paydowns out of the monthly cashflow and using some of our meager cash savings to melt the principal. And we were at zero revolving debt come August when the banking system made me an offer I could not refuse.

One of my credit card companies offered a $10,000 loan at a fixed 4.99 percent interest until repaid. There was some fine print, but what struck me was that at the same time, my bank was paying money market interest rates above 5 percent. So I borrowed $9,500 and put it into a money market account. At the same time I made an auto-debit from my checking account to pay off the loan in four years. The auto debit was essential. The credit card companies offer these come-on interest rates knowing that a large percentage of the takers will miss a payment somewhere along the way. And the fine print says, if the payer is late, the interest rate goes from 4.99 percent to something like 22 percent. (It makes me fume to print such a usurious figure!)

In any event here are the bets implicit in this decision:

• – That I can maintain the fiscal discipline to leave that principal untouched, and therefore instead of a $9,500 loan in four years I will have a somewhat larger sum already pre-saved.
• — That if I do need the money (my shake roof has too many missing shingles and mossy green patches) that I will not be able to borrow at such an attractive rate.

So with that let me wish you a great start to 2007. I do not think it will be an easy year. But good things never are.