Breaking the Taboo against Money-Talk: Two Teachers’ Different Levels of Retirement Readiness

NRR = Colleague who is not retirement-ready
RR = Colleague who is retirement-ready
DH = Dear Husband
                A teacher at the high school where I work has become remarkably trim over the past year. “How much have you lost?” a colleague and I asked her this week. We got into a discussion about workouts from home vs. workouts at the gym and about different nutritional habits she has adopted to shed twenty-five pounds. It was a high-five kind of conversation. She looks great.

Two teachers. Two financial realities.

                No one has come up to me and said, “You look like you’ve lost some debt this year.” Debt is invisible. Money-talk is frowned upon. As a teacher, I know that even within a group of people who earn similar incomes, financial realities are all over the map. I asked two colleagues who have a lot in common if I could use their personal situations in this post. I am grateful that they both agreed. Each is a man in his fifties. Each came to teaching as a mid-career shift. Each earned more in his previous job. Each has experienced divorce. Each is a father of almost-grown daughters. I’ll call one NRR (for not retirement-ready) and the other RR (for retirement-ready).

NRR

                My ears are attuned as they never were before to hints of people’s money matters. A few months ago, NRR commented upon the fact that he couldn’t say “No” to his daughters when they asked for money, and he said that he’d never be able to retire. I approached him this week as diplomatically as possible to ask if I could interview him about his finances for my blog. I told him that I understood that he was not ready for retirement, and that I would be comparing him to another colleague who was. He seemed a bit surprised to have been pegged in this way, but he had nothing to hide.
                NRR is fifty-five years old, and he plans to teach until he is sixty-five. At that time, he says, he will be eligible to earn a pension of $16,000 annually. The Canadian Pension Plan will boost his retirement income – though he’s not sure by how much – and he has about $14,000 in savings. He doesn’t carry much debt, but Christmas and tax time usually put him in the red for a while. He doesn’t like the idea of having to work until the age of sixty-five, but he doesn’t regret any of the decisions he has made leading up to his present state.
                NRR earns a good income, and he spends all of it. Two of his daughters are university aged, and the youngest is about to start her final year of high school. Although there are two universities in our city, his daughters go out of town. “I think they should be able to go to school where they want,” he said.  They all work over the summer, but when they ask for money, he gives it to them. “They’re not extravagant in any way . . . ” he started. Then he reconsidered. “OK, they could be extravagant in some ways.” What about making them partially responsible to fund their post-secondary education? I asked. “No.” What about putting limits on the amount given? What about saying, ‘I’ll give you a certain amount per month, but if you blow it, you’ll have to do without’? He started to shake his head before I had even finished asking the question. “It’s not an option because I just don’t think that way,” he said. I asked if he thought his daughters had learned a sense of financial responsibility. “I don’t think so,” he said. But he’s talked to them about it. And he has a financially savvy friend who will talk with them some day.
                There were extenuating circumstances to NRR’s situation. An ex-wife, for instance, who offers little support despite her higher income. The divorce set him back financially. So did the years he spent as a stay-at-home dad. I asked again about retirement. “I’m not going to worry about what’s going to happen in the future,” he said. “I have a master’s degree in economics, but I’m not a finance guy. Why should I worry about money?”

RR

                RR is a man whose financial health I was able to identify shortly after DH and I started our journey out of debt. Aged fifty-two, he has been in a position to stop working for the past five years. But he enjoys teaching, and he’s waiting for family circumstances to line up with his retirement plans. No rush. When I asked about retirement-readiness, he told me that his teachers’ pension will not be his primary source of income. He has an investment portfolio that will bring in a greater sum of money. He hasn’t lived in extreme frugality over the years, but he has always consciously avoided allowing money to dribble away. He uses cash instead of plastic. And he has always saved.
When RR and his first wife split up fifteen years ago, he was not set back financially. Already mortgage-free at that time, he was able to meet all monetary obligations involved in the divorce without dipping into debt. “I had no argument with the financial arrangements,” he said. “The custody issue was the important one. My only concern was how my daughter would turn out.”
                It was for his daughter that he changed his career. His former job required extensive travel, and he wanted to be around for her. I couldn’t discern to what extent RR has tried to impart financial wisdom to his daughter. “When she was in grade one,” he said, “I took her to the bank and opened up an account for her. I deposited $1,111,” he said. “At the end of grade two, it was $2,222.” And on it went through the years. So she has seen money grow, but does she have a sense of budgeting or of not overspending? I don’t know. I suspect she has absorbed her father’s money sense as much by osmosis as by annual trips to the bank. She attends a local university, but she’ll study overseas as part of her program this coming year. She has worked hard for scholarships. And she has a summer job. At the mint.

Harmful taboo against money talk

                If you met RR and NRR, you would probably be struck by all that they have in common. Well respected teachers of about the same age – even about the same physical size – each possesses a quiet confidence and a rather dry air of knowing more than he lets on. You might be struck, as I was, by their value of family and love for their children.  But I’m willing to bet you wouldn’t guess at the contrast between their states of financial health and readiness for retirement.
                I wanted to ask RR more about how he is preparing his daughter to be economically self-sufficient. I wanted to challenge NRR with the idea that making plans of financial provision would not mean making money more important than people. And that putting limits on what he gives to his children would not mean showing them less love. But I had already asked so much in the face of a social taboo on conversations about personal finance. RR and NRR had been gracious in setting it aside. I didn’t want to push it.
                I wish that people could engage in money talk with as much freedom as we discuss physical fitness. We see weight loss and weight gain all around us. We understand the difference between cardio training and weight-bearing exercise. We can identify protein and carbs – good carbs and bad. And it’s common to talk about these things – to disagree, debate, learn, and fine-tune our own attitudes and practice. But we don’t all know the basics of financial fitness. We don’t see each other’s debts or savings, and we don’t discuss incomes or budgets. It’s bad form to debate choices to borrow or spend. So we steer clear of money talk. And I think we deprive ourselves of great sources of wisdom because of 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.)

Gazelle Intense Debt-Reduction: What Does It Look Like?

DH = Dear Husband
DD2 = Dear Second Daughter
                Last week, I wrote about taking on more work to pay off debt. In my case, it means double duty as I finish off the regular school year while at the same time finding placements for my summer school co-op students. Once July rolls around, I’ll be back to one job, but for a few weeks in June, it means craziness. Definitely not fun. The question is: Is it worth it?

Ramsey & “gazelle intensity”

                DH and I started our journey out of debt after reading Dave Ramsey’s The Total Money Makeover in the spring of 2012. In it, Ramsey writes of “gazelle intensity”- an odd combination of words at first sight, but he provides the needed context. The cheetah, a predator of the gazelle, is much faster and more powerful than its prey. So what do you think are the odds that a delicate creature like the gazelle will win against the cheetah? Pretty good as it turns out. Ramsey writes “because the gazelle will outmaneuver the cheetah instead of outrunning him, the cheetah will tire quickly. As a matter of fact, the cheetah only gets his gazelle burger for lunch in one out of nineteen chases. The gazelle’s primary hunter is the fastest mammal on dry ground, yet the gazelle wins almost every time.” He then goes on to make the application: “Likewise, the way out of debt is to outmaneuver the enemy and run for your life” (Ramsey 121).

Who or what is the “enemy” of the debtor?

·         Debt.
·         Pushers of debt like credit card companies, banks, and sellers of merchandise who seduce you into buying with future income.
·         Social forces that pressure you to fit in / keep up with the Joneses / appear affluent / remain faithful to expensive family traditions / be that generous guy who buys the beer for everyone.
·         Inner sabotage, often stemming from a deep-seated belief that for basic happiness you NEED a trip / sexy car / big house / designer clothes / new furniture / a daily latte.

Reconsidering gazelle intensity

In response to my post last week a concerned colleague, who reads my blog, respectfully asked if
he could challenge my decision to take on summer school – especially given the fact that it meant this period of stressed out double duty. “Your health and happiness are worth something. Aren’t they more important that taking a big chunk out of your debt?” he asked. Likewise, Travis, who commented on my post last week, took issue with what he understood to be Ramsey’s concept of gazelle intensity: “for me it’s a recipe for burnout and resentment . . . there comes a time when you have to take a breath and recharge those batteries too. Remember, even while paying off your debt, you need to enjoy life as well.”
                These comments led me to consider whether or not I’ve got the right idea. I looked back at Ramsey’s words on gazelle intensity and found this little gem leading up to them. “If you take an old-fashioned magnifying glass outside and set it near some crumpled newspapers, nothing will happen. If you point the sun’s rays through the magnifying glass but move it around or wiggle it, nothing will happen. If you hold really still and focus the sun’s rays totally on that crumpled newspaper, things begin to happen. Focused intensity will cause you to smell something burning, and soon you will see an actual fire.” He uses this illustration to encourage the debtor to resolve, “To the exclusion of virtually everything else, I’m getting out of debt!” (Ramsey, 120)
To the exclusion of health, happiness, and relationships? No. Might health, happiness, and relationships be strained with all of this focused intensity? On occasion, yes. But anyone who is serious about getting out of the red already knows that debt is the biggest life-sucker of all.

What have we done to be gazelle intense since we started our journey out of debt June 2012?

·         We keep a budget and spend less on things like groceries and household items. A savings of about $30 per week.
·         I used to accompany DH on his annual summer business get-aways, but not anymore. A savings of about $1,500 per year.
·         We used to take a week-end away for our anniversary, but not anymore. A savings of about $800 per year.
·         We used to hire cleaners for our house, but not anymore. A savings of $200 per month.
·         We have used that monthly $200 to buy large purchases – like a flat-screen TV – outright. We used it once to avoid going back into debt. (Now we’ve got about $1,000 in that account just sitting there, and we’re taking our time deciding what to do with it. Unheard of for us!)
·         We have a very old van (1999 Dodge Caravan) and very worn furniture and carpets. There is no shortage of “stuff” that we could easily rationalize buying. But we aren’t.
·         I have been teaching summer school since 2012 – through both July and August since 2013.  A yearly slice of a few thousand off our debt.
·         We don’t “rescue” our children from their own financial mismanagement. (By the way, DD2 started her summer job over a week ago!)
·         DH has decided not to hire anyone until his business debt has been paid off.
·         We have not once dipped back into debt.

It all adds up.

Gazelle intensity means your intention to become debt-free is fierce, impacting every aspect of life. If
you want that pile of debt to burn, a steady, magnified focus is needed. And sometimes it’s going to be stressful. On occasion, it will cause conflict. Getting out of debt won’t always be a happy ride. But in our case, most negative experiences have proven to be the pain involved in ending bad patterns, and they’ve been of short duration – nowhere near as depleting as the financial distress that comes with a sense of being hopelessly in debt.
We haven’t spent the last two years in a state of unending debt-reduction stress. The gazelle doesn’t spend all of its time in high anxiety escaping the cheetah. But when the threat asserts itself, we’re aware. Whether it’s the constant barrage of ads to buy happiness with debt; whether it’s a social pressure to replace the worn furniture in our family room; or my own strong desire to kick back instead of work – we’re able to outmanoeuvre debt, and I believe we’re going to win. Usually, there is no immediate threat. Usually, life offers its laughs with friends, its love of family, its charms of nature, and its restorative rest. So while I’m feeling the high anxiety now, I know it will settle down again. And I’ll be at peace. Like a grazing gazelle.
        

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.)

Working Extra to Pay off Debt (& Feeling Cranky)

The cheerful pizza delivery guy vs. me

                In his book The Total Money Makeover, Dave Ramsey writes of people cheerfully chipping away at their debts by delivering pizza in the evenings after working their regular day jobs. It’s an irrefutable concept: If you earn more money, you can pay off more debt. Since our journey out of debt began just over two years ago, I’ve taken on extra work by teaching summer school, and this year is no exception. I’ve accepted a position to work from the beginning of July until the middle of August as a co-op teacher. The program is great, giving students the opportunity to earn credits by working “in the real world”. Students who are to be in my class this summer have requested placements with police, retail, medical offices, dog groomers, seniors’ homes, summer camps . . . And it’s my job over the next few weeks to secure those positions for them.
                Great opportunity, right? A chance for me to work outside the regular school setting and to associate with people from a variety of job sectors. A chance for students who don’t necessarily excel at academics to experience success in a practical work placement. And a chance to earn extra income to pay off more debt. A win-win-win situation. But I’m tired!
I remember how it used to be through the month of June. There’s a crazy rush of final assignments and the overarching stress of impending exams. At the same time, the weather is beautiful and enticing, making it difficult for students to focus. The strange atmosphere of combined anxiety and spring fever brings on an element of exhausting chaos unique to this time of year. But the summer break is just past the horizon, offering staff and students alike a happy energy to see it all through. Unless they’re involved in summer school.
I’m worried about finding positions for my students. I’m uncertain about some of the computer programs I’m supposed to use. I’m not getting in any workouts as I go to my regular job for the day and then prepare for my students’ placements in the late afternoons and evenings. The house isn’t getting cleaned, and meals are decidedly slipshod these days. All the while, the alternative seems so lovely: To finish off the school year and head into a summer holiday – drinking in a slower pace; picking strawberries with my daughters and making jam; taking the dog on leisurely walks; cycling with my neighbour in the mornings; curling up with a book for hours; visiting people I don’t get around to seeing through the year . . .
I’m whining, and I’m not proud of it. I’m falling short of that cheerful pizza delivery guy. The promise of debt-freedom is supposed to be spurring me on, but it isn’t. It seems like a bottomless pit. That image from Fantasia  of Mickey Mouse as the sorcerer’s apprentice comes to mind: Having brought on a flood of infinite proportions, his every effort to contain it is made useless by those multiplying, psychotic brooms. A rather dismal view of things. Inaccurate too. Our debt isn’t infinite, and our efforts haven’t been useless. It’s just that debt-repayment is a long-term undertaking, and sometimes it seems . . . REALLY long.
Ramsey says that The Total Money Makeover “is not a book for the wimpy among us” (Ramsey, 10). Well, I’m coming face-to-face with my inner-wimp. These next few weeks will be tough as I work double-duty. But I’ll find the placements, learn the computer programs, and soon enough, the school year will end, and I’ll be back to single duty. The workouts can wait. So can the house. And it will be interesting to meet with students and supervisors at their various places of work. It will be heartening to see my students succeed – especially those accustomed to failure. And it will be satisfying to cut a significant slice out of our debt this summer.
So there. With any luck, I’ve nipped my whine-fest in the bud and faced down any wimpiness. I’m not exactly perky about it all, but hopefully I’ll shake off this mood slump before too long. And I’ll be cheerful. Like the pizza delivery guy.

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.)

Legacy of a Great Man: No Regrets

I normally write about our journey out of debt, but this past week, tragedy struck, and details of debt-reduction faded in significance with the stark reality of life and death.


DH = Dear Husband
 
                Monday morning, about an hour into the work day, I checked my e-mails. “Sad” was the subject heading of a personal message, and I opened it up, curiosity piqued. “Sad” did not begin to describe it. I learned that Roy had died suddenly the day before. He had been cycling with his wife Sunday afternoon when he became the victim of a hit-and-run accident. The words swam before my eyes. Such tragedy. Roy left behind not only his wife, but three sons. Beyond shocking. No one was more thoroughly alive than Roy. I functioned in a fog for the rest of the day.
                That evening, DH and I lingered together after supper. “I think that Roy had no regrets,” I said to him, our reflections scattered among long periods of silence. “He lived life so fully, with purpose and passion.” We had attended the same church as Roy and his family for many years before they moved to a small town. In recent years, we had only seen them intermittently, but it had always been effortless to pick up from where we’d left off when our paths crossed. “I have this sense of inadequacy,” DH said. “Roy wouldn’t want you to,” I responded. Yet it turned out to be a sentiment shared by many men.
The church he attended seats a congregation of three hundred, but late Thursday afternoon, a thousand people gathered to honour Roy’s life. DH and I sat outside along with hundreds of others, watching the service on a screen. His sons, two in their teens and one in his early twenties, spoke of a loving, fun, dedicated father as they read their letters of farewell to him. Arms extended in support of each other, the eldest reading what the youngest could not, they offered a powerful, moving testimony of filial love and respect. His closest friend spoke of a man who had no superficial relationships. “If you talked with Roy for five minutes, you thought of him as your best friend,” he said, the sheer number of people in attendance confirming his words. Projected on a screen, notes of condolence from his place of work, from pastors of different churches, and from friends in the community painted a uniform picture of a hard-working, fun-loving, authentic man – one who, in his character, struck those points of balance between humility and power, simplicity and wisdom, truth and love.  With a baffling capacity to tune in and give of himself, he mentored individuals and led teams, inspiring people with his vision. Whether it was a church-building initiative, a determination to keep his son’s hockey team afloat, or a fund-raising project to send kids to camp, he led with a confidence that all things were possible.
Roy’s widow remained tirelessly gracious through hundreds of encounters with fellow mourners before and after the service. “He was very important to [DH] when he was out of work and making decisions about his future,” I said to her unsteadily. “He was so encouraging – at such a difficult time – in a way that mattered.” Printed on the program were words from 2Timothy 4:6-7 as translated in The Message: “You take over. I’m about to die, my life an offering on God’s altar. This is the only race worth running. I’ve run hard right to the finish, believed all the way.  All that’s left now is the shouting—God’s applause!” In his sermon, the pastor drew parallels between the Apostle Paul’s race to the finish and Roy’s. “Roy lived without regret,” he said, echoing the thoughts that had no doubt come to most of us in the days leading up to the funeral. I believe we all felt the need to step up – in some way to fill the void left by Roy. To ramp up and run the race harder, live more fully, with more purpose, unencumbered by regret.
                As they cycled last Sunday afternoon, Roy and his wife passed by the house they had almost purchased when they had moved to the town. Riding ahead of him, she turned her head back and asked, “Do you think we should have chosen this house after all?” Minutes later, she would hear the collision and see her husband thrown into the air as the truck sped off. Minutes later, she would run to him and recognize immediately that he had gone. But at this moment in time, they were enjoying the sunshine of a beautiful day. “No, I love our home,” he answered, speaking what were to be his last words. “I have no regrets at all.”

2nd Anniversary of Debt Reduction: $78,000 Down

DH = Dear Husband
                “Sometimes, even when you’re focused and taking care of all the details, events beyond your control stop your progress,” I wrote a year ago in a post about our first anniversary of debt-reduction. “It’s easy to get very discouraged at such times, but it’s important not to.  Ramsey says it takes the average household seven years to get out of debt.  It’s a long road, and there will be both ups and downs along the way.  Find the grace to weather the journey.” Those words turned out to be prophetic considering the year that lay ahead.

Year 1 / Year 2: Same income, same household, but very different debt repayment

                In the first year of our journey out of debt, DH and I paid down almost $50,000. In our second year, we paid down $28,000. It’s an impressive number in its own right, but it is undeniably smaller than the first. Why the difference? Our household income was essentially the same through both our first and second years. Year two, DH earned a few thousand less from his business, but I earned a few thousand more by teaching summer school through July and August. Our regular expenses stayed the same. Two of our three daughters are in their teens and still live at home (the eldest, in her twenties, has flown the nest); we live in the same house with the same bills to pay (mind you food, hydro, and gas prices have gone up); we still have a dog; and we still drive the same car and the same van.

Year 2: A year of exceptional expenses

  • We realized our debt-reduction would have to be put on hold for a while when we decided to put up a new roof last summer. It’s a good one, guaranteed for fifty years, and it cost $10,300.
  • Last spring, a huge dead branch fell off the ancient sugar maple we had in our backyard. It was clearly time to cut the tree down. And last August, we did. At a cost of $2,400.
  • Our dog developed bladder stones this past year, and through a series of visits to three different vets, we paid for a range of tests and procedures, culminating in surgery in January. Total cost: $4,000.
  • DH is self-employed and runs a home-based business. His accountant gave him some advice this spring to help set him up for eventual retirement, and it meant putting aside $4,500.
  • The exceptional expenses of the past year have added up to $21,200. No surprise that we paid significantly less off of our debt.

Biggest Triumph for Year 2: No yo-yo debting!

                Most of us think of debt as having a starting point that steadily, over time, comes down to zero. But if you take a look at the history of your own personal debt, I’m willing to bet it tells a different story. A look at ours certainly does. The first debt, perhaps a student loan, starts to come down, slowly but surely. Before it gets anywhere close to zero though, a car debt is added. The two debts decrease, bit by bit, but then there’s a credit card debt for furniture or a trip. Down the combined-debt travels from its third peak, steadily down, down – until the mortgage debt happens. And that’s not the end of it. There are landscaping debts, renovating debts, more rooms to furnish, and by this time the first car is getting on in years . . . In the normal course of events, our generation remains faithful to a yo-yo debt that peaks and decreases and peaks again – over and over and over through the decades of our lives. Not until death do we part.
                But over the past year, even with the relentless onslaught of expenses that we faced, DH and I never once increased our debt. Our debt-reduction progress was very slow at times, but the slope always went down, however imperceptibly. In the year from June 1, 2011 to June 1, 2012 – the year before we got serious about our debt – DH and I paid off just under $16,000 , mainly through regular mortgage and car payments. With exceptional expenses totalling $21,000, we would have gone back into more debt that year. But this past year, we maintained our focused intensity, despite our discouragement, and we still paid off way more than we ever did before our journey out of debt began.
So here is where we stand at the end of Year 2:
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
Start of June 2014: Total Debt = $179,850
#1 New Car Debt – $0
#2 Old Car & Course Debt – $0
#3 Business Debt – $42,050
#4 Mortgage – $137,800
                On to Year 3!

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 Garage Sale

DH = Dear Husband
DFF = Debt-Free Friend
DD2 = Dear Second Daughter 

Obstacles to Garage Sales

                “Your junk is someone else’s treasure.” You’ve heard it before, right? And you probably know from experience that it is often true. “Gather all the ‘junk’ in your home and have a garage sale!” If you’re like me, you’ve resolved to follow this practical advice . . . many times. What’s stopping me? I have often wondered. We’ve got ‘junk’ and we’ve got a garage. Why is it so difficult to follow through and actually hold a garage sale?

1. De-cluttering Drudgery

“In our efforts to reduce our debt, DH and I have recently taken on the task of de-cluttering our home,” I wrote in a February post. “We take on a single cupboard or drawer each week-end.” How purposeful and productive that sounds. And I really felt purposeful and productive when I wrote it, but in actual fact we maintained this de-cluttering schedule for a mere two week-ends. It’s definitely drudge work to go through a house, painstakingly determining what hasn’t been used for years, what is still worth keeping, what might have value to someone else, and what should just be thrown out. Maybe there’s a deeper psychology in this aversion to dealing with excess stuff. Maybe, at a subconscious level, some of us feel a comfort in our clutter. I don’t know. I just know that for me personally, it’s incredibly easy to get side-tracked from a mission to de-clutter.

2. Is It Worth the Effort?

                “Don’t save the stuff for a garage sale,” DH said as I started putting things aside. “Just throw it out.” Is it worth the effort to put aside – say – a DVD that we haven’t watched in years, and try to sell it? What about all of our old VHS movies? Do people even have VCR machines anymore? With Netflix, do they bother with DVDs? And what about the record albums that have been in storage since 1990? (I looked at the date on the newspaper that served as packaging.) “Records are in again,” I told DH. “Go for it. Try to sell them,” he said in resignation. And there were shoes, and puzzles, and board games, and soccer balls, and books, and kitchen knick-knacks . . .

3. Can’t Meet the Requirements

                As the week-ends in May passed by, I got into my de-cluttering mode again. I felt a determination to let my better angels have victory in this struggle against my stubborn aversion to stuff-sorting. The entertainment cupboards in the basement and the family room; my bedroom closet – I worked through them, but May was passing, and there were still many other closets, cupboards, boxes in the basement, not to mention the garage itself. It would be impossible to get through it all.
                “Why does it have to be in May?” asked DFF when I told her about my dilemma. DFF is the one who gave us the needed nudge towards debt-reduction two years ago, and she is a stunning testimony to the wisdom of paying off debt, living frugally, and saving. Now a single mother of four children, she is nevertheless completely debt-free, cushioned by ever-growing savings, and has the freedom to continue to be a stay-at-home mom. “And you can still hold a garage sale without going through everything in your house. Just have a smaller one.” Why did I think it had to be in May? And why was I burdened by the notion that the whole house had to be sorted through? How many of us submit to defeat because of the preconditions we don’t even realize we impose?

Just Do It: The Great Glebe Garage Sale

                Our street had a garage sale two weeks ago, and I didn’t know it was happening until DD2 told me about it on the Saturday it took place. That’s OK, I thought to myself, armed with a wisdom in line with DFF’s broad thinking. I can hold a garage sale that isn’t part of a street effort. But would anyone bother with a single house garage sale? With a relatively small stash of stuff?
                Every year, at the end of May, there is a huge and famous neighbourhood garage sale in our city. It’s just not our neighbourhood. But I have a sister who lives there. “Are you selling anything at the Glebe Garage Sale?” I asked her last week. “No,” she answered cheerfully. “I keep saying every year that I’m going to – but I never get my act together.” It clearly runs in the family. “Can [DD2] and I set up outside your house?” I asked. “Sure!”
                So yesterday morning, the Saturday of the Great Glebe Garage Sale, DD2 and I were up bright and early, packing our van with tables, blankets, and our respective “stuff”. We parked in my sister’s driveway shortly after 8:00 am, and we couldn’t even set up before customers started going through our merchandise. The record albums were a huge hit – for all age groups. “There’s lots of Joni Mitchell.” “My dad has all of these.” “Bread! How does this song go again?” (I sang it. And it sold.) “What a memory trip!” The shoes went. $2 per pair. Almost all of the puzzles and games went – for $1 to $5 each. Most of the DVDs and even some of the VHS tapes went – .50¢ each. “That’s why we keep our VCR,” said one man, his little daughter on his shoulders.”We get our entertainment cheap.”  It was a perfect morning – sunny but not too hot – and there was a remarkably friendly vibe that made the busy transactions and constant scrounging around for change entirely pleasant. The sale went on until 3:00, but DD2 and I packed it in at noon – exhausted.
                I started the day hoping that I’d make $50. Instead, I ended up with $300. And DD2 was happy with her takings too. We were both eager to get home, but we made a stop at the bank first to make our respective deposits. I have a plan for that $300 – something consistent with our debt-reduction efforts – but I’ll save that for another time. For now, I’ll just savour the triumph. Despite drudgery, discouragement, and doubt, I rose to the challenge, thought outside the box, relieved our house of some of its clutter, had a great morning, and earned a surprising amount of cash.
Debt repayment is a war consisting of many battles. I believe I have just won a significant victory.

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Parent In Debt: The Challenge of NOT Financially Rescuing Daughter

DH = Dear Husband
DD2 = Dear Second Daughter

Empathy

                One of my sisters has extreme empathy. I remember once, expecting my first child and still experiencing morning sickness, I was in her kitchen and had to dash off to deal with a wave of nausea.  When I came back to the kitchen, she wasn’t there. I waited for a while, and eventually she appeared, walking slowly and unsteadily, bent over, face drawn, and holding her stomach. She was having sympathy nausea, and it wasn’t leaving in a hurry. Her little son toddled around with a big smile on his face, thoroughly enjoying the moment, emitting deep burping sounds as his aunt and mother recovered.
I like empathetic people – those who not only perceive what others are feeling, but who feel it too. When you tell your own good news to empathetic people they light up and really share in your happiness. When you confide your suffering to empathetic people, they literally suffer with you. My nephew, now a grown man, has learned over the years that it’s actually best not to tell his mother when things aren’t going well because she will feel his pain more intensely and for a longer period of time than he does. Perhaps there is such a thing as too much empathy.

Asserting Financial Boundaries With Children

DH and I are nearing the second anniversary of our journey out of debt, and by this point, it’s clear to me that money issues are not just a matter of surface mathematics. Money issues run deep, and it takes some reflection to identify root causes. One of my own pitfalls when it comes to personal finances is my uncertain sense of boundaries when it comes to our daughters. I’m sure I’m not the only parent out there who, in making efforts to get out of debt, has recognized a need to say “No” to beloved offspring. And although it has gone against the grain, I’ve made great strides in this area. I know it’s not only necessary for our debt-reduction; it’s good for our children. That doesn’t make it easy though.

DD2’s Challenge

DD2 finished her university semester four weeks ago, and she had an unpaid tuition bill. Until it is taken care of, she won’t be able to register for her fall semester courses. This is a situation about which DH and I had cautioned her for over a year in advance as we saw her spend her way towards it. A combination of our savings for her post-secondary education, her savings from part-time jobs, athletic bursaries, and grants have not been equal to her lifestyle, and the consequence has hit home. It took everything I had to say, “No, we won’t pay the tuition bill.”
DD2 has stepped up. She asked the right questions of the right people and found out about an athletic bursary for which she was eligible. She made the phone calls, set up the appointments, filled in the paper work and got it. Over half of the tuition bill taken care of. She also decided to say “No” to a great opportunity to train and compete – one that involved travel, which she loves. Instead, she’s been pounding the pavement in search of a summer job. It’s a tricky undertaking for an athlete who has to devote every afternoon to training and several week-ends to competition. She needs a morning shift, and she has applied for dozens of postings. Everything she is doing is testifying to the wisdom of not “rescuing” your children. She’s doing what is necessary to rescue herself, and it’s so heartening. Except for the fact that she doesn’t have a job yet. And time is ticking.
                DD2 is experiencing the stress of unemployment and unmet financial obligations, as well as the humbling recognition that it didn’t have to be this way. I applaud her effort; I share in her disappointment; I am beyond proud of her resolution to be positive and keep trying, taking it day by day; and I suffer in her doubt. Like my sister all those years ago, I feel it in my gut. Is there a time for parents to come to the rescue? When is it? I don’t know. And I still hope that I won’t have to figure it out. I look so forward to the phone call or the text message or the shining eyes that say, “Mom! I got a job!” Until then, I have to keep steady and wait. I have to trust that this is a lesson for me as much as for her. I have to foster her resilience by allowing her to face this challenge. I know this. All the same, I’m holding my stomach.

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Debtor Sought for Advice: A Colleague’s Dream Home Dilemma

DH = Dear Husband

The Dream Home

                I got out of my car in the school parking lot Monday morning, feeling good about my early arrival – over an hour before the bell for first class would ring. As I entered the building, the door to the social sciences office opened, and out came a teacher, walking purposefully towards me.
                 “Can I talk to you?” she asked.
                “Of course,” I answered, interested to hear what this could be about.
                “Jeff (not his real name) and I are looking for a new house, and we found one that is perfect.” There was an intensity to her words. This was a big deal. “It backs onto green space; it’s close to a good school; and after we went through it, I asked Jeff what would need to be fixed up – he’s so picky about things I don’t even see – and he said ‘Nothing.’ It’s perfect for us, and I don’t know when another house like this will come on the market.” I felt a growing empathy as she spoke. I knew where this was going. “As someone who has a really nice house, would you say that the expense has been worth it?” she asked.

My Dream Home Regret

                Did she know I was trying to get out of debt? Did she know of our years of terrible financial stress after the hi-tech bust and DH’s job loss? Yes. I remembered talking to her about these things, though I couldn’t remember the context. And I knew that her dilemma was rooted in the heart. I recalled the way I felt as we looked for our dream home. So when I shook my head, it was with compassion. “No,” I said. “I love our house, but if I could go back in time, I wouldn’t buy it.” I tried to encapsulate what we’d been through, and said it would have been so much better if we’d had more savings and less debt.
When I asked her about her current house, she said it was too small, bought when she and Jeff had no plans for children. It was old and in need of copious amounts of fixing up. And although Jeff was a handy man who could do it all, they didn’t relish a lifestyle of working their jobs all week and then working on the house every week-end. They wanted time to take their child to the park and to see the animals at the farm. I asked her if she’d be able to keep teaching part-time if they bought the house they’d found. No, she said. But finances were stressful even living in their current house. There was still student debt to pay off.
I was surprised at the wave of weepy regret that came over me – one that I managed to hold in check. Did she see that taking on the debt of a larger mortgage would increase that financial stress? Yes, she said, but if it was a matter of choosing to spend a lot of money either on fixing up their current house or on buying the new one that needed no work, she was leaning towards the latter. I could have poked holes in that statement, and there were many more points I could have raised, but I chose not to pursue it. I knew that to her, this house was presenting itself as The Answer, and that its impact was something of a spell. I’d been there, and although I knew it was fraught with pitfalls, I also knew that it was powerful, and that part of the spell was its ready provision of rationalizations and explanations to counter every argument against it.
“I think you really want this house,” I started.
“I do,” she acknowledged.
“And it sounds wonderful. I wish you the best whatever decision you make.” I hadn’t expressed myself completely. “I want to say ‘God bless you,’” I said, “but I don’t think you’d like that.”
“It’s OK,” she said, showing tolerance in her staunch atheism. “You can say it. I understand where it’s coming from.”
“Then God bless you.”
I knew that my colleague would be making important decisions within a day or two, so when I crossed paths with her again Friday morning, I was eager for an update.
“Did you make a decision about the house?” I asked as we briefly shared the same space.
“Someone else bought it, so the decision was taken out of our hands,” she said with a shrug of resignation – and I couldn’t read what else.
Did she feel frustrated by this roadblock? Did she feel sad about it? Or angry? It’s a sensitive matter, and I won’t barge in as she processes it. But I feel relieved for her. And I believe that she, one day, as she looks back on it all with some perspective, will feel blessed.

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O Canada: World’s Richest Middle-Class & Record-Breaking Personal Debt

Debt-Reduction: A Priority for Canadians, But Not A Reality

Just before I cut my credit card, I went to the CIBC (Canadian Imperial Bank of Commerce), and opened an account so that I could get a Visa debit card. While I was there, I picked up an information sheet that caught my eye. “Half of Canadians failing to pay down debt, poll finds” was the title. Among Canadians who carry some form of debt – 71% of us – half say that their debts have either increased or stayed the same in the past year, “despite a prior CIBC poll where respondents indicated that debt repayment was a priority in 2013.”

Lack of Money or Too Much Temptation?

                Why are we having trouble paying down our personal debts even though we have stated that debt-reduction is our priority? “The number one reason cited . . . was not having the money to do so . . .” CIBC’s managing director of tax and estate planning, Jamie Golombek, elaborates: “I think that has to do with the low interest rates that we have right now. The temptation to borrow is so easy – to get the bigger house, to get the bigger mortgage or just to borrow from lines of credit.” Golombek’s statement actually contradicts the claim of Canadians who feel stuck in their debts. Are we unable to reduce our debts because we don’t have enough money? Or are we failing to reduce our debts because we don’t resist the temptation to keep borrowing? Which is it?

We’re Rich! So Why Are We More and More Indebted?

                Yesterday, a business teacher at the school where I work showed me an article he was preparing to distribute to his students. The article, written by William Watson and published April 23 in the Financial Post, deals with The New York Times’ declaration that Canada now has the world’s richest middle-class. Although it was written to make a political point (“Canada’s Booming Middle Class Undermines Justin Trudeau”), I considered the article in terms of Canadians’ record-breaking personal debt.                According to an article written by Matt Hurst and published by Statistics Canada in 2011, the average debt-to-income ratio in 1990 was 93% – meaning that in the average household, for every $1.00 of take-home pay, $0.93 was owed. Twenty-four years later, our average debt-to-income ratio is a whopping 165%. Why is this happening? I asked my colleague.
                “If we have the richest middle class in the world, why is our personal debt bigger than it’s ever been before?” More and more middle class Canadians are working from home, he answered, and the start-up costs of their businesses have required loans. I can certainly relate to that. My husband works from home, and we’re in the middle of paying off a huge business debt. “But not everyone has a home business,” I said. “What about growing consumer debt?” Our healthy household incomes, he answered, allow us to pay the interest on our consumer debt. “But if we got out of debt, we could be earning interest on savings and investments instead of paying it.” With interest rates so low, he said, savings don’t earn much and debt is inexpensive. A couple of thoughts came to mind, but I looked him square in the eye and said, “You’ve been living out of debt for over fifteen years, and it’s allowed your wealth to grow.” He gave an enigmatic “It’s worked for me,” and that was that. (Note: Since starting my journey out of debt, I’ve engaged in conversations about personal finances more than I ever did before. A previous discussion had confirmed my colleague’s debt-free status.)

Perils of Debt – Even When Interest Rates Are Low

“Between 1984 and 2009, real average household debt for Canadians more than doubled . . .” states the Statistics Canada article. “As interest rates decrease, average household debt increases because debt becomes more affordable” (Hurst 2011). I don’t have an answer to the conundrum of inexpensive debt and poor returns on savings in times of low interest rates. But I do know that personal debt can become a stranglehold with a reversal in personal finances. Divorce, job loss, injury, illness . . . The impact can be severe. No matter what the interest rate.
                So here is my conclusion. Canadians have a hard time getting out of debt for two reasons, and the first compounds the second:
1. Even though many of us can afford to pay down our debts, we don’t resist the temptation to borrow – especially since interest rates are low.
2. Reverses in personal finances are very common, and often when people lose income to divorce or downsizing for instance, they really can’t afford to pay down their debts. They get stuck on the perpetual treadmill of minimum payments.

Confront Your Inner-Automaton

                It’s a bit disturbing to realize how automated we can be. Press the “low interest rate” button to get the “higher personal debt” light flashing – despite very evident risks.  Yet my colleague the business teacher, although he can explain the trend of greater and greater personal debt in Canada, hasn’t chosen that route for himself. We don’t have to be automatons. We can make debt repayment a priority and actually follow through. We can recognize the temptation to buy on credit – and resist it. We can acknowledge low interest rates – and recognize that they make debt repayment that much more possible. Take your debt-to-income ratio of 165% and add in hiked up interest rates – it’s going to happen sooner or later. Not a pretty sight. But if we start now to follow through on our stated priority of debt-reduction, we’ll side-step that grief – and so many others. We actually cando it. We’re the richest middle class in the world.
                

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Debt-Reduction & 7 Habits: Habit #2

Begin with the End in Mind

“How different our lives are when we really know what is deeply important to us, and, keeping that picture in mind, we manage ourselves each day to be and to do what really matters most.” Habit #2 in Stephen Covey’s book The 7 Habits of Highly Effective Peopleis to begin with the end in mind. “If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster We may be very busy, we may be very efficient, but we will also be truly effectiveonly when we begin with the end in mind” (Covey, 98).

Mission Statement

                Covey encourages the reader to write a personal mission statement as a concrete way to begin with the end in mind. “It focuses on what you want to be (character) and to do (contributions and achievements) and on the values or principles upon which being and doing are based” (Covey, 106). His book was first published 1989, and mission statements became trendy in the years that followed. I have vague recollections of meetings at schools, churches, and sports clubs at which leaders presented “our mission statement” with an aura of excessive significance. Most of us listened politely, patiently waiting for the business at hand to be addressed. From what I observe, the mission statement trend subsided after a time. I wasn’t sorry to see it go.
                But I read Covey’s 2ndhabit with a fresh attitude, and I put my jaded views aside. Instead of briefly thinking about my “dreams,” “goals,” and “what’s really important to me” – as I have done countless times in different contexts when asked to write these things down – I actually put pen to paper. Literally. No lap top for the drafting of my personal mission statement. It was a messy undertaking – words crossed out, words inserted, arrows moving sentences from one place on the page to another . . . And remarkably satisfying.

Debt-Reduction: Part of a Bigger Picture

                When it comes to debt-reduction, a personal mission statement offers context to what can seem so mundane. Preparing monthly budgets, tracking receipts, hunting for sales, looking for ways to earn more income, dealing with unexpected expenses, reworking the budget, adjusting expectations . . . This is the stuff of paying off debt, and it can be draining and deadly dull if not animated by a larger picture. I regularly read other debt blogs, and occasionally, I come across a post of someone who has paid it all off – and there’s a “What now?” quality to it. I’m fully convinced that debt-freedom is a worthy pursuit and a highly desirable state. But it’s not the end in itself. It’s a stepping stone to . . . Well, to “dreams,” “goals,” and “what’s really important to me” – to which I’ve given forbearing lip-service over the years, but which I’ve long sloughed off with a subtle roll of the eyes and a tired resignation to “reality”.

First Creation: Make Sure It’s Yours

                “‘Begin with the end in mind’ is based on the principle that all things are created twice. There’s a mental or first creation, and a physical or second creation to all things,” Covey says. “The carpenter’s rule is ‘measure twice, cut once.’ You have to make sure that the blueprint, the first creation, is really what you want . . . In our personal lives, if we do not develop our own self-awareness and become responsible for first creations, we empower other people and circumstances  . . . to shape much of our lives by default” (Covey, 99-100). An important part of my mission statement is to have “abundant life”. But in resigning to “reality” as I believed I was doing, I was really resigning to other people and circumstances – allowing them to shape my life – and missing out on abundant living.
Covey’s 2nd habit, to begin with the end in mind, covers far more than finances. But we would be wise, in our debt-ridden society, to give it some consideration in that light. I think that most of us who are indebted got that way because we were swayed by the winds of materialism, credit, cultural greed, and peer or family pressure. How many of us even know what we find important? Do you? And are you living your life in line with it? Although it’s a slightly outdated practice, and although many of us might have ineffective experience with it, I encourage you to take Covey’s advice and set some time aside to write a personal mission statement. “A mission statement is not something you write overnight. It takes deep introspection, careful analysis, thoughtful expression . . . But fundamentally, your mission statement becomes your constitution, the solid expression of your vision and values. It becomes the criterion by which you measure everything else in your life” (Covey, 129).

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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.)