New Year’s Resolution for Debtors: Wake Up!

DH = Dear Husband
                A friend of DH’s recently sent him a link to a Youtube voice recording of Anthony de MelloNeither of us had ever heard of him before, and we were both blown away as we listened to him. A Jesuit priest and psychotherapist from India, he became internationally acclaimed for his writings and conferences about spirituality before his death in 1987. DH gave me two of de Mello’s books for Christmas, and I’m now half way through Awareness: The Perils and Opportunities of Reality. As I take in de Mello’s wisdom, I can’t help but see its application to personal debt.
                “Most people, even though they don’t know it, are asleep . . . Waking up is unpleasant, you know. You are nice and comfortable in bed. It’s irritating to be woken up” (de Mello, 5-6). For years and years, I was “asleep” to my finances. I kept no track of what I earned or what I spent. I had no concept of saving for a rainy day – or of saving for anything at all. I slipped easily into the norm of borrowing money for every significant purchase and of using my credit card often. I felt no compulsion to pay off my various debts. I lived with them in comfort, and the fact that hundreds, and eventually thousands, and tens of thousands of dollars were evaporating into interest payments did not disturb me. I married a man who was better than I was with money, but he too regarded debt as inevitable. We each earned healthy salaries, and we both liked to live “well”. Shortly after we moved into our dream home and had our third child, DH became a casualty of the hi-tech bust of the early 2000s. Suddenly, we weren’t so comfortable.
                “Some of us get woken up by the harsh realities of life. We suffer so much that we wake up. But [some] people keep bumping again and again into life. They still go on sleepwalking” (de Mello, 16). On the grand scale of human suffering, unemployment isn’t very dramatic. When we consider the ravages of war, natural disasters, crime, or terrible illness, unemployment comes off as rather tame by comparison. But I’m willing to bet that most people who have endured it for an extended period of time would tell you that it was one of the worst experiences of their lives. We certainly would. After a two year roller coaster ride of uncertain employment, as one hi-tech company after another failed, DH went through six years without a job. There was occasional work, but nothing close to a reliable income. I had resigned from my part-time teaching position to be a stay-at-home mom, and I went back to work full-time. “You’re lucky you were able to support your family,” I was told several times, and I agreed. But I was miserable. We didn’t wake up though. If we had, we would have sold our big house. For a time, DH would have taken on work for which he was overqualified. We would not have leased a new car. We would not have purchased a pure-bred puppy. Instead, we were in utter denial. And we kept “sleepwalking.”
                “. . . [P]eople don’t really want to be cured. What they want is relief; a cure is painful . . . It’s only when you’re sick of your sickness that you’ll get out of it” (de Mello, 6 & 12). I had a profound craving for relief. I remember indulging in fantasies about winning the lottery. But when DH purchased a small business franchise in 2009, we dared to hope that we had found a cure. Our hopes were supported through his first three years in business – which were successful in terms of challenging, satisfying, and gainful employment. But there was an underlying stress. Starting a business had meant going into significant business debt, and after years of financial distress, we were no longer comfortable with huge debt. Finally, we were ready to wake up.
                In the spring of 2012, a friend of mine dropped off a copy of Dave Ramsey’s CD book, The Total Money Makeover. I had politely tolerated her occasional hints about money management over the years, but I had been asleep, and as such had been mildly irritated. This time, however, I had my awakening. The first morning I played that CD in the car on my way to work, I was astonished at the tears streaming down my face. Absolutely psyched, I listened to it again with DH that evening. Even after I had gone to bed,  he kept on listening – hooked. Change was on its way. In June of 2012, we owed $257,000 for cars, business, and home. And we began our journey out of debt.
                “That’s what learning is all about . . . a willingness to unlearn, to listen . . . to see. We don’t want to see . . . If you look, you lose control of the life that you are so precariously holding together. And so in order to wake up, the one thing you need the most . . . is the readiness to learn something new. The chances that you will wake up are in direct proportion to the amount of truth you can take without running away. How much are you ready to take? How much of everything you’ve held dear are you ready to have shattered, without running away?” (de Mello, 17 & 28-29) 
  • Waking up has definitely brought with it the irritation of which de Mello speaks. At first, tracking expenditures is annoying. Creating monthly budgets is stressful. Considering each purchase in terms of the budget seems life-sucking. But gradually, these things become habits, and there is less and less irritation. 
  • There is so much that we have come to “see” in society at large that fosters debt. Banks, credit card companies, businesses, the spending habits and the expectations of your family and friends – everything works together to guide you gently into the red. Statistics about debt, which used to mean nothing to me, now speak volumes. Here are a couple:
  • The average debt-to-income ratio in Canada is now 165%. That means that for the typical Canadian household, for every $1.00 of annual take-home pay earned, $1.65 is owed. That’s a record high.
  • 60% of Canadians retire in debt. That’s a record high too.

So you won’t get out of debt by going with the flow. You’ve got to be intentional and go against the flow. Be prepared to take some flack from “normal” people who fit in with statistical trends.

  • We have also realized subtle attitudes within our own selves that we have “unlearned” – like notions of what we “deserve”; and our insistence upon having it NOW; like keeping up with the Joneses; like thinking expenditures prove love; and that happiness is linked to purchases.
  • And as we have “lost control of all that we had precariously held together” we have found that things are falling into place. That underlying stress is gone. DH and I are communicating better. To date, we have paid off more than $70,000 of debt. We’re well on our way.
                Perhaps you’re reading this post because you’ve got a nagging stress about your personal debt, and you’re making a New Year’s resolution to do something about it. I suspect that if that is the case, you will have one of two responses to what you’ve just read. One possibility is that you’re annoyed. That means you are still too comfortable in your bed, and you will probably go back to sleep. The other possibility is that you’re alive to the promise of change, and you want to embrace it. And that means you are ready to unlearn, to listen, to see, and to learn something new. That means you’re ready to wake up!
 

Comments are welcome!

I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)

Managing Debt & The Pressure Cooker of Christmas (without Superpowers)

DH = Dear Husband
DD3 = Dear Third Daughter

Concept of ideal woman – 1980  

        

I remember in my teens seeing a commercial that featured an emerging concept of the ideal woman. She was no longer the June Cleaver housewife of twenty years earlier. She was sexier, bolder. And not only could she manage her household; she worked a successful career and had plenty of energy to step out on the town with her man – looking like a million bucks – when the work day was done. This woman never stopped. She set a tough standard, and while my complete inability to live up to it has made me feel inadequate on occasion, I’ve long since given up on trying to follow in her footsteps. I’m no Superwoman.             

Small business & the Christmas rush

But with DH self-employed and in the midst of another Christmas rush, super powers would come in handy right about now. In January of 2013, I reflected upon the season we had just come through. “[T]his December brought us to the brink in terms of how busy things became.  It’s a home-based business, and throughout most of the month, DH only pulled himself away from his office to go to bed at about 2:00 am – sometimes later . . . This kind of work volume takes its toll . . . And while we couldn’t help but be encouraged by the boom, I believe DH was completely accurate when he said, ‘If I had to work like this over the long term, I wouldn’t live very long.’  It was unhealthy physically, relationally, and mentally.  And although at its peak it lasted for only a month, it’s not a month we want to repeat.”
We approached December this year with some dread of the nonstop lifestyle that has indeed happened again. But we went in with eyes wide-open and the attitude that we weren’t going to be super heroes. We would hunker down, shut out the rest of the world for a time, and be understanding of our own shortcomings. The house didn’t get cleaned for weeks. That was OK. I didn’t manage to bring Christmas cards and baking to work to share with my colleagues and students. That was OK. After a day of work, followed by Christmas shopping, followed by driving DD3 somewhere, followed by walking the dog, I was often too tired to cook a meal. That was OK. The $200 per month that we haven’t been spending on a house cleaning service since our journey out of debt began – money that we normally put aside for things like furniture or paint for the house – has been devoted this month to take-out meals. There have been plenty of them lately. And that’s OK.
            We’re sticking to our budget, but we’ve built some significant self-preservation into it. Would things be different right now if we weren’t on this journey out of debt? It’s hard to say. But I do know that the December before our debt-reduction efforts started – December of 2011 –  DH’s business was just as busy, and life was as out of balance as it is this time around. But the money evaporated.  I think that our response towards business-on-steroids was less about coping with it and more about getting some pay-back from it. There was spending to self-medicate rather than to manage. We certainly didn’t pay down the debt.
            We’re tired, but we’re almost there. That superwoman from the commercial of 1980 would no doubt be handling this month with more flourish than I have. She’d go out to more parties, and not only would she bring baking and cards to give to people at work – she’d bring gifts too. All the while she’d be dressed and coiffed stunningly. But her standard is not mine. Besides, I bet she’s in debt big time.
 

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I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)

Debt and Battlefield of the Brain at Christmas Time

DD1 = Dear First Daughter
DD2 = Dear Second Daughter

Battlefield of the Brain

            The young saleswoman was stylish and competent. “That will be $299.45,” she said. It must be a policy here that the employees have to dress in clothes sold by the store, I thought casually with one part of my brain. Another part of my brain was in an uproar. $299! How did that happen? I can’t buy all of this! Somewhat stunned by the warring factions within my head, I mechanically went through the motions of taking out my debit card and swiping it. This was a familiar feeling, but I hadn’t experienced it for a long time.
 
            Before we started our journey out of debt, it was common for me to enter a store with a vague notion of what I would buy and how much I would spend – and then buy and spend a whole lot more. Any qualms would soon be allayed by a stream of rationalizations: That’s just how much these things cost. The quality is great. She’ll (I’ll/He’ll/They’ll) really like it! We won’t have to pay until the end of next month when the Visa bill comes due. No problem. For a minute or two, there might be that stunned state of misgiving battling it out with desire, but temptation always won, and I’d open myself to the full pleasure of that brain-rush high of buying.

Changing Landscape of the Brain

            At this point, though, we’re eighteen months into our debt-reduction efforts, and the landscape of my brain has changed. First of all, I didn’t walk into that store with an uncertain notion of what I would buy and how much I would spend; I had a Christmas list and a Christmas budget. I knew what items of clothing I was going to buy for DD1 and for DD2, and I knew what my maximum was for each. I got a little lost as I looked through all that was available. A subtle seduction was working its power on me as I imagined DD1’s delight and DD2’s surprise as each opened her gifts Christmas morning. The colours, the fabrics, the variety of styles . . . They wobbled my mental math, making me round down, making me subtract rather than add tax – or so it must have been, because I was way off and genuinely shocked by that $299 total.
            As I walked out of the store, I felt the presence of my old friend, the brain-rush high of buying. Welcome, old friend! Long time no see! And it washed over my doubts. I soon noticed, however, that I was wandering about with no direction, and I realized that the battle in my mind was still unresolved. Here was the second piece of evidence that the landscape of my brain had changed: temptation had not swiftly vanquished my qualms. That brain-rush may have washed over my doubts, but it hadn’t washed them away.
 
            I sat down on a bench in the mall and cleared my head. I took the receipt out from my purse – third evidence of change! I knew exactly where it was. I figured out how much I had spent on each daughter in question, and it became in-your-face clear that I had blown the budget on DD1. My desire to lavish gifts on her at this time of year is easy to figure out. She lives so far away, and I miss her. The splurge was understandable . . . but that didn’t make it wise. Blowing the budget is not a healthy response to emotion. It is not proof of love. Armed with this insight, my course of action became clear: I would return an item I had bought for DD1 to bring things back in line with the budget.
 
            Slightly awkward, but so what? (Fourth evidence of change!) Maybe the stylish and competent young saleswoman would roll her eyes back. Maybe she’d sigh in annoyance. Go ahead! Make my day! I walked into the store. There was no line-up at the cash register, and there was no hesitation on my part. “I blew the budget,” I explained, holding out the item I was returning. No eye-rolling. No irritated sigh. The saleswoman punched in some numbers, got me to swipe my debit card, and then wrote on the gift receipt. “Uh,” she seemed concerned. “If your daughter uses this receipt to make an exchange, she’s going to see the refund.” I saw what she meant, but told her not to worry about it. “She knows her mother is on a budget,” I said. The saleswoman, stylish and competent, concluded our transaction graciously. “We all are,” smiled.

Clarity and Contentment

            I left the mall yesterday evening with a feeling different from the brain-rush high of buying. It was a more sober contentment, characterized by a surprising clarity of mind – one that took in the abundance of my situation, despite the returned gift. Despite our debt. Temptations abound at this time of year. Disguised as joy and love, they’re enough to derail just about anyone. But if you open up to thinking outside the debt-matrix – if you catch every longing to buy and just sit with it for a while to figure out what it really is – if you face the possibility of judgement or awkwardness head-on, you just might overcome those temptations. And you just might tap into a happiness that money can’t buy.  

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I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)


In Debt & On A Christmas Budget

Too Much Good Advice

            I regularly read the blogs of other people who are tackling their debt, and one topic that keeps coming up these days is Christmas. Top 5 Ways to Spend Less at Christmas; DIY Christmas Gifts that Save You a Bundle; How to Pay off Debt and Give at Christmas. I’m finding so much good advice oppressive.

 Mistakes of Christmas Past

            Last year when I wrote about Christmas, I gushed. I’m slightly embarrassed by it now. After proclaiming my love for all things excess – gift-buying, rich food, decorating, and serial socializing – I said, “I don’t want to be a debt-ridden dupe of the commercialized sentiment of Christmas.” Hmmm . . . I’m pretty sure I was just that. The Hallmark cards had me figured out.
DH and I did prepare a budget last year, but we blew it. At the time I didn’t know we had blown it – I was still several degrees removed from the actual numbers of our finances last year – and I’m not sure I would have minded too much if I had known. I was willing to sacrifice a great deal at the altar of Christmas. I remember at this time last year listening to a radio segment about the holidays on my way to work. It was about the fact that parents want to see their children’s eyes light up in wonder as they open presents December 25th. That’s mission accomplished. The problem was, the threshold for wonder was steadily rising, and the cost of lighting up those eyes was rising along with it. I definitely fit in with that phenomenon.

Goals for Christmas Present (pun not intended)

This year, I’m not gushing. And I’m resisting that eye-shining mission. Although I put it off for weeks – because part of me still wants to let go at this time of year and give my wallet complete reign – I did sit down with DH last week-end to prepare a Christmas budget. We want to do better than we did last year when so much money escaped us without our consent, so we’re addressing the matter of holiday money leakage.  We started with the effort to be completely aware and real about all areas of expense. No dramatic cut-backs. Just complete transparency and accountability. This year, I won’t be in the dark about “blowing the budget” if that’s what we do. It will be clear as soon as it happens.
Here are some broad-stroke details of our budget:
$300 worth of gifts for each of our three daughters – including stocking stuffers.
$15 per gift for each child under eighteen in our extended families. (There are seven.)
$50 for my mom’s gift.
$25 extra per week in December for our grocery budget.
$80 for a tree. (Don’t judge us!)
$50 for wrapping paper, cards, candles.
$250 for skiing/snowboarding.
$150 for social expenses.
            Any expenses that fall outside of our detailed Christmas budget will come from our respective discretionary funds. I believe we’ve got it covered. When I look at those numbers, I think, That’s a pretty fine Christmas! But I promise you, we used to spend way more – without knowing where it all went. I’m very curious to know how others manage Christmas. Do you have a budget? Do you find your money floats into the ether at this time of year? Do you pay for Christmas upfront, or do you pay it off in the first half of the New Year? 
            Last night, I went Christmas shopping with a friend. “Know what you are going to buy before you go shopping,” is a piece of advice I have recently read. And I did. I kept careful track of my receipts, and later at home, I would tally them up in their proper categories according to our budget. There was a lot of practical intent going on. But at one point, I found myself swaying to some catchy Christmas music playing in a store. And in a nearby mirror, I caught a glimpse of a decidedly cheerful looking woman – me! My fear of losing something precious by approaching Christmas in a practical, itemized, budgeted way is apparently unfounded. I’ve disengaged somewhat from the gush, but I can still enjoy music and the company of a good friend. The less fabricated pleasures are the most genuine. And they will be at the top of my Christmas list this year.
 

Comments are welcome!

I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)

3rd Semi-Annual Report for Debt-Reduction: Feeling Fierce

DH = Dear Husband
 
            The Christmas rush is on, and DH is working nonstop. This November, like last November, has been a strong financial month. Money has been flowing into the business account. Our household account has been beefed up because I had three rather than the usual two pay periods, and DH collected his annual expenses claim for working from home. As a result of the healthy household account, DH didn’t have to pay himself a salary in November – and he won’t have to in December either – meaning more money is left in the business account to pay down the business debt. DH went to the bank today and put $7,000 against Debt #3, bringing it below the $50, 000 mark to $49, 340.
            It’s the end of November, and that means it’s time for our third semi-annual report. Here are the numbers:
Start of June 2012:  Total Debt = $257, 400
#1 New Car Debt – $8,600
#2 Old Car & Course Debt – $12,800
#3 Business Debt – $80,800
#4 Mortgage – $155,000
End of November 2013:  Total Debt = $191, 460
#1 New Car Debt – $0
#2 Old Car & Course Debt – $0
#3 Business Debt – $49, 340
#4 Mortgage – $142, 120
            Our total debt reduction to date adds up to almost $66,000. A quick look at the three six-month periods that we’ve had so far in our journey out of debt suggests that the most recent six months have been the least successful. 
          1stsix months: $26, 000
          2ndsix months: $24, 000
          3rdsix months: $16, 000
But we had to pay for a new roof this time, as well as a tree removal. If I add the $12, 000 cost of those expenses to what we managed to pay off of our debt, it turns out to be the most successful half-year yet. I think that the best thing we did in the last six months was to avoid getting sucked into yo-yo debting with our big expenses. We saved up and paid for them outright. 

Looking Ahead & Feeling Fierce

            I’m feeling fierce as I look ahead to the next six months. I want to do Christmas on a budget. I want to get my discretionary account in order. I plan to counter the likely spring slow-down in DH’s business by cutting expenses and selling off items that are cluttering our house. I’ve recently started to read Mr. Money Moustache’s blog (more on that later), and I’ve been inspired to dig deeper in our debt-reduction efforts. DH, who for years felt frustrated by my non-engagement in our finances said this morning that he was going to start writing a blog called “Being Married to Prudence Debtfree: What Have I Created?” I don’t think I’ll be that scary, but you never know. The next six months will tell.

Comments are welcome!

I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)

Debt Reduction, Discretionary Spending & Discouragement

DH = Dear Husband
DD1 = Dear First Daughter
 
            Most people who are trying to reduce their debt realize that they have to build into their budgets some room for manoeuver – some kind of discretionary money that allows them to go out to a movie the odd time or to buy a great gift for someone on impulse. It’s like a little sphere within the regimented world of debt-reduction where you can operate outside of the regimen. A little oasis. I think that people’s management of discretionary money is an indicator of how they’ll manage finances when they’re debt-free. And that’s a problem for me.
            Even before we began our journey out of debt eighteen months ago, DH and I decided to set up his and her discretionary accounts. It was DH’s idea, and I was in full agreement. His motivation was to set some boundaries around our – and perhaps more specifically, my – spending on certain essentials (like clothing and soap) and non-essentials (like restaurant meals). My motivation was to gain more spending freedom.  If this experiment has proven anything, it’s that DH is so much better at managing his discretionary account than I am at managing mine. Humbling fact – I really do need boundaries around my spending.

A Sad History

                   Here is a brief history of my poor discretionary account:

  • The very first month, in the fall of 2011, I plunged into debt.
  • That debt deepened and became entrenched over the next few months.
  • At the six-month point, we started our journey out of debt, and I made a deal with DH. We had decided to stop hiring house cleaners, and I said I would do all of the cleaning if I could put the money saved in that department against my discretionary debt. DH agreed.
  • By the one year mark, I had worked my way back up to zero. We shared housework again (more or less), and our savings went to a mutual discretionary fund (for things like furniture).
  • My big goal for year two, starting in the fall of 2012, was to put aside enough discretionary money to go on a trip to visit DD1 in August 2013.
  • I managed to stay above zero all year, but I didn’t manage to save. I went on my trip to visit DD1 thanks to the generosity of DH and two friends.
  • I have been dipping back down into debt in my discretionary account this fall. 
Ugh!

A Sense of Powerlessness

            Last night I spoke with a friend who is struggling with weight loss. “I’ve tried so many times,” she said, “but every time I’ve lost weight, I’ve gained back more. I know I should try again, but I’m afraid I’ll just disappoint myself.” She was so evidently discouraged by a sense of powerlessness. I believe it’s the same sense of powerlessness that discourages people facing a whole range of issues – from overeating to gambling; from porn addiction to drug abuse; from smoking to chronic debt. I feel it too, in relation to my discretionary account, and I’m baffled by it. Why can’t I get this under control? Like my friend, I know I should try again, but like her, I’m afraid it would just lead to disappointment.
            It’s so much easier to advise other people than it is to take that advice yourself. I encouraged my friend last night not to give up. I advised her to take a different approach – to partner up with people in exercise and diet – to reap the benefits of the accountability and motivation than come with team work. She said she needed time to process it all, and apparently I’ve been processing it too.

Trying Again: A Goal and A Strategy

            So I’m going to try again. My goal is to have a balance of $1,000 in my discretionary account by the end of the summer of 2014. (Why? I’ll explain when the time comes.) I will do something different this time. At the end of each month, I’ll tell three of my close friends how I’ve managed, and I’ll post my progress on this blog. I’ll start with the belief that there will be an accountability and motivation this time that wasn’t there last time. And maybe that will make the difference. Maybe there will be a turning point in the sad story of my discretionary fund. I want to be able to see in it an indicator of growing financial competence. I want to gain from it the confidence that our larger journey out of debt is a one-way proposition. So with some trepidation, once again, here I go.
 

Comments are welcome!

I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)

Debt, Faith, Fitness, Remembrance, and Freedom

Debt Reduction vs. Wealth Building

                I have written in previous posts about the fact that I read blogs of other people fighting debt. These readings serve to help me keep my resolve in focused debt reduction, and I access them through the people and organizations I follow on Twitter. As I search for articles that relate to where we’re at in our journey out of debt, I often sift out those to do with investments and savings. There is an overlap between writings on the subject of debt reduction and those on the subject of wealth building, and while I’m 100% in when it comes to eliminating debt, I struggle with the concept of building wealth. Where I associate debt reduction with becoming responsible, exercising discipline, and cleaning up my act, I have a stubbornly ingrained (and false) association of wealth building with greed and selfishness.

Delving into Faith

Almost exactly a year ago, I wrote the post “Debt Reduction and Guilt:  Facing the Sabotage from Within”. In it, I explained how faulty interpretations of certain Bible passages had taken root in me long ago, leading me to associate money and rich people with all that is bad. It’s slightly risky, at least in Canada, to quote the Bible when sharing a personal issue – like personal debt – because it can alienate the listener or the reader. But debt reduction is many-layered, and leaving out the spiritual side of it gives an incomplete picture of the experience. A colleague of mine who reads this blog and who is not Christian told me last year, after reading the post mentioned above, “You’re one of the few people who can quote the Bible without leaving me angry.” That gives me some encouragement to delve into the subject again, risky as it is to do so.

Physical Fitness ǁ Financial Fitness

            I remember once listening to a Christian radio show as I drove my car. The guest was a man well into his sixties who was talking about physical fitness and the need, with age, to include in daily work-outs progressively higher ratios of weight-bearing exercise, as opposed to cardio exercise, in order to remain strong and healthy. People were able to phone in, and one man who did so said, “As Christians, we are called upon to serve others, so how can we be so selfish as to justify spending a half-hour or an hour a day training for fitness?” The question irritated me. Of course you have to look after yourself if you’re going to be of any use to anyone else, I thought. And how does it serve others to become out of shape?
            I get that concept with physical fitness, so what stands in the way of my adopting the same attitude with financial fitness? With debt-freedom and steadily building savings, I would have more flexibility to give generously to my church and local charities. I would have more power to donate to international efforts, like the emergency relief now underway in the Philippines. These are good things. And they can more readily be done by people who have built up some wealth. Of course you have to look after your own money if you’re going to be of any financial support to others, I should be thinking of my own bias. How generous can you be when you’re debt-ridden?

Remembrance Day and “Freedom”

            Last Sunday in church, the service began with a segment in honour of Remembrance Day. “They died for our freedom,” is the message we hear at this time of year, and for me it’s moving because both my father and my grandfather served in war. It is an especially powerful message for a Christian in church because Christ served and died “to set the captive free” (Luke 4:18). I looked up the word “freedom” in three different dictionaries (I realize that’s a pretty nerdy thing to do), and in each, there are two parts to the definition:
1. having power to determine action
2. the state of not being imprisoned or enslaved
Freedom is a gift that many of us squander. It’s a gift that we undermine by being careless with our power and becoming captive to things like addictions, materialism, pride, fear . . . and debt. So how do we honour this gift and the sacrifices made for it? “It is for freedom that Christ has set us free. Stand firm, then, and do not let yourselves be burdened again by a yoke of slavery” (Galatians 5:1).  We honour the gift of freedom by living it fully and in gratitude – and by “standing firm” in vigilance to maintain it. Carelessness means slipping back into captivity.

Financial Freedom

            I want to shake off my discomfort with the concept of wealth building. I know rationally that the negative connotations with which I associate it are false. And I know that the freedom inherent in financial fitness has the potential to be good. We’re still a long way from paying off our debt and getting our financial house in order. Time will tell if we maintain the discipline necessary to keep things going in a positive direction once we’re out of the red. Time will tell if we use our growing financial freedom well and generously or if we squander it foolishly. My hope is that we will embrace it and that we’ll “stand firm” to maintain it – because I don’t like captivity. It is for freedom that we are set free. I want to live it.
 

Comments are welcome!

I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)

 

Debt and Disney?

DH = Dear Husband
DD3 = Dear Third Daughter
DD2 = Dear Second Daughter
DD1 = Dear First Daughter
            Every summer, DH goes to a city in the U.S. for a “get-away” with other franchise owners in his business. It’s an intensive series of workshops with a few special dinners and an awards night included. I accompanied him after his first and second years as a self-employed franchise owner, but since we started our journey out of debt, I have not joined him on his trips for years three and four. In February of this year, DH learned that the location for the 2014 get-away will be Orlando Florida. Hmmm . . .
            I remember being amused last year when a fellow teacher commented on the fact that she and her husband had not yet taken their daughters to Disney. Their daughters’ friends all seemed to have gone with their families, and she was struggling with a sense of having deprived her children. She was resentful too, knowing that the guilt was false and manufactured by marketers – but she still felt it. My daughters are much older than hers, and I tried to give her some reassurance. We’ve never taken our children to Disney World either. I cheered on her resolve not to spend exorbitantly just to keep up with the Jonses. I encouraged her not to cave to the brilliant pressure tactics of the ads.
            But when DH and I found out that his company would be holding its annual event in Orlando, we both started to think the same way. Let’s take the family to Disney World! DD3 has always wanted to go. She’ll be thrilled! It will be cheaper in July than during the winter. The hotel costs will be low because of DH’s business. Maybe the CEO will arrange for package deals to Disney for franchise owners bringing their families . . . In February, when we found out about the Orlando location, our debt-reduction was in high gear. DH’s business had been going strong for months, and we had been able to put almost $15,000 against our business debt in the previous two months alone. By July of 2014, we’ll have paid off the business debt, I thought at the time. We’ll be debt-free except for the mortgage. It will be a perfect time to celebrate with a family trip. When we told DD3 about our plans, it was like she was hearing angels sing. She was so happy! DD2 and DD1 were also keen to go, as long as the timing worked out for them – and it looked like it might.
            After February though, came March and April, and they were the slowest business months DH had had in a long time. We started to feel a panic. Was his business going to succeed? Through the late spring and summer, things picked up, but our roof needed to be replaced ($10,000) and our huge, rotting tree needed to be cut down ($2,000). To add insult to injury, our van needed a repair ($900) and our dog got kidney stones ($1,500). We avoided going back into debt to pay for these huge expenses, but we made no progress on debt-reduction for four months. It’s pretty clear now that we will not have the business debt paid off by next July. It’s pretty clear now that we shouldn’t make a family trip to Disney out of DH’s Orlando get-away. The best thing to do is to stay the course. DH will go on his own again. The girls and I will remain at home, and I’ll teach summer school.
            I pulled DD3 aside yesterday and told her that the Disney trip was not going to happen. Her eyes went wide in surprise and she asked why not, but as I explained everything, she just nodded her head. “It’s OK,” she said. “I understand.”
            Fortunately I’ve observed that children, no matter how old, are eager to be treated to a vacation by their parents. It will be a fine day for me when DH and I can gather up our offspring and head out to wherever it is we’ll go. But it won’t be Disney next year. 

Comments are welcome!

I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)


5th Slice out of Debt #3 (Sloppy but Big)

DH = Dear Husband
 
            After four months of being on hold with our debt reduction, this week we were finally in a position to take another slice out of Debt #3, our business debt.  DH looked at the spreadsheet on which we track all of our expenses and said that we’d be able to put down $5,000 for the month of October. I felt great about ending our stalemate with a number like that. We made an outing of it, driving over to the bank together to deposit the cheque. While DH did the banking, I walked across the parking lot to Tim Hortons to pick up some celebratory coffee. Cheers!
            If you’ve been reading this blog, you know that DH and I have had huge expenses to take care of lately. The rotting sugar maple in our backyard had to be cut down, coming in at $2,000. And our roof had to be replaced for a staggering $10,000. When DH studied that spreadsheet last week, the tree expense had already been paid, and our balance indicated that we were in a position to pay our soon-to-come roof bill handily. The only problem was that the spreadsheet was wrong.

Shifting Patterns of Relationship

            I’ve noticed a slow shifting in the patterns of our relationship when it comes to financial management. I think that with most couples, it is accepted that one person is better than the other in dealing with household finances. Usually, that person is the one who does the leg work in paying the bills. Usually, that person has the stronger voice in decisions about what to buy and when to buy it. It’s natural and even desirable, when it comes to couples, for respective strengths and weaknesses to complement one another so that the combination of the two partners makes both stronger. But it’s not so desirable when an accepted weakness in one or the other is reinforced by patterns in the relationship. And I think that’s been the case with us. Subtle eye-rolling frustration expressed by DH; my own playing the “cute” card in an “I just don’t know how the money leaves my wallet so fast,” kind of way; DH’s tendency to be impatient when I’d try to discuss something of a financial nature; my avoidance of conflict by spending in a sneaky way. Not healthy.
            Since we’ve been on our journey out of debt, I have confronted my financially inept “inner cutie-pie”; I have been upfront about my spending – whether good or bad; and I have yanked my head out of the sand to engage in the management of the details. In facing my own financial faults, my eyes have been opened to something else: DH’s financial faults. He’s always been better that I have been with money. But he’s not perfect. One weakness in particular that has come to light has been his lack of will to meet with me regularly to look at our budget. When that budget is neglected, the numbers stray. And that’s why our balance on the spreadsheet was wrong – out by about $1,500.

Shortfall

            We’d already put our $5,000 against the debt, so now we wouldn’t have enough for the roof. Ugh! Early in the week I came home from work to find out about our shortfall, and as the representative from the roofing company was driving to our place to collect payment, we were trying to figure out how we would make up for it. We hadn’t once increased our line of credit since starting our journey out of debt, and I was disheartened to think that now we would have to. Then DH thought of our mutual discretionary fund – the $200 per month we’ve been putting aside since we’re not hiring house cleaners any more. We use it to pay for “wants” as opposed to “needs”. Since the spring, it had been growing untouched. And it amounted to $1,500. We had our sights set on a new sofa with that $1,500, but I’d much rather put up with worn out furniture than go back into debt. And that’s how we paid for our roof in its entirety, despite the slip-up in budgeting.

Two Milestones Passed

            It was a sloppy re-entry into debt reduction. But we did it. And that $5,000 brought us past two milestones. Our business debt, which started out at $80,800, had hovered above the $60,000 mark for five long months. That barrier has now been broken. Debt #3 is down to $56, 000. And our overall debt, which started out at $257, 000, is officially under the $200, 000 mark. We’re at $199, 200. These are still very big numbers, but the milestones are significant. And as our debt goes down, in fits and starts, DH and I are morphing through the mess, forming new and healthier patterns of relationship.

 

Comments are welcome!

I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)

The Canadian Senate $candal (Through the Eyes of a Debtor)

 
             The Canadian political scene is offering remarkable levels of drama these days. Four senators charged with fraudulent claims for living and travel expenses; a personal cheque for $90,000 given by Nigel Wright, the prime minister’s former chief of staff, to help out Senator Mike Duffy; Prime Minister Stephen Harper accused of covering up his own awareness and tacit approval of the Wright-Duffy cheque exchange; the resignation of Senator Mac Harb amidst investigations; colleagues said to have had personal vendettas against Senator Pamela WallinSenator Patrick Brazeau claiming back-room deals . . . Hundreds of thousands of tax payers’ dollars are alleged to have been misspent. And somehow, this is distracting attention away from the fact that former Ontario Premier Dalton McGuinty’s gas plant fiasco is costing taxpayers a billion dollars instead of the forty million he originally claimed it would cost. A billion is a thousand million in Canada, so it’s costing twenty-five times more than Premier McGuinty said it would. Hmmmm . . .
            I think I’m supposed to be feeling outrage.How can they justify using our tax dollars so arrogantly?” is the expected response when politicians abuse the public purse.  “He lied to us! He should be held accountable!” “Their story keeps changing. You can’t trust any of them!” These types of comments make sense given the unfolding narrative – in all its variations. But the feeling that strikes me most when I listen to the news these days is a distinct lack of indignation about it all. I don’t find any of it shocking.
            Our journey out of debt has necessitated an honest look in the mirror. As I’ve acknowledged my own faults in dealing with money, I’ve learned to forgive myself and move on. Having done so, I’m not inclined to thirst for revenge when it comes to the faults of others – even politicians. Some senators have apparently overstepped the bounds of justified expenditures. I’ve done that countless times. Many powerful people are denying that they’ve done anything wrong. I know what it is to be in denial. Accusations are flying as different interpretations of complicated spending regulations are put forward.  Didn’t I just write about financial bickering last week?  Senators are claiming they’ve followed the spending regulations as well as advice from their superiors. Their superiors are backpedalling, and the spending regulations are being exposed as a quagmire of confusion. I’ve contributed to the financial chaos that results when communication is lacking and understanding is uncertain. That’s why I’m in debt.
I know that there are limits to a comparison between my personal financial foibles with those of public figures who are using public funds and who must be held to a higher standard of accountability. And of course I want justice to be served. Of course I believe that those who have breached public trust should receive appropriate consequences. But I also hope that there will be no politically expedient scapegoating. And I hope that we won’t indulge ourselves in eager, bloodthirsty assassinations of character.
Here is my advice to our political leaders:
  • Let the investigations continue.
  • Let due process take its course.
  • Clarify regulations regarding expenses and make sure they are effectively communicated.
  • Acknowledge bad practice and formulate the remedy for it.
  • Recognize systemic problems inherent in the current scandal. It’s not just about a few lone senators.
  • Mete out appropriate consequences to individuals, but avoid a witch hunt.
            The mess surrounding this Senate Scandal is familiar to me personally. And given the fact that Canadians’ average debt-to-income ratio is 165%, I think it should be familiar to most of us. Outrage misapplied does nothing but lash out its blame and accusations as it defends itself in stubborn denial. What’s needed here is a disengagement from the chaotic rage-fest. What’s needed is honest discernment and openness to change. What’s needed is sober second thought.
 

Comments are welcome!

I would love to hear what you have to say. Feel free to share your thoughts, offer advice, disagree, or ask questions. (Disrespectful comments will be deleted.)