Debt & Perspective: “It’s Only Money”

DH = Dear Husband
DD3 = Dear Third Daughter
                “It’s only money.” I’ve heard these words in various situations since my childhood, and I never used to doubt their meaning or their truth. When people said, “It’s only money,” I understood that they had good values. They knew there were things in life that were of greater importance than money. They weren’t going to get tied in a knot over finances. They were above such superficiality.
                That way of thinking fit in nicely with my complete irresponsibility when it came to money matters. I had better things to do than keep track of my receipts. There were more important things in life than creating a budget. I was above such superficiality. The mundane people of the world worried about number crunching. I was lofty. I kept my head in the sand, immune to any common financial wisdom, my state of denial reinforced by an underlying arrogance about my good values.

Debt Reduction Isn’t About Money?

                In his book, The Total Money Makeover, Dave Ramsey says that ultimately, getting out of debt isn’t about money. At first, I found his statement to be slightly annoying. As we started our journey out of debt, DH and I began saving receipts, tracking expenses, creating monthly budgets, cutting out certain non-essentials, and analyzing and reanalyzing particulars. “Here’s the receipt for the groceries I bought when the Sinclairs came for dinner. Should it go under our regular grocery budget or our discretionary budget?” “I bought a water bottle for DD3. Does that go under our household expenses or her sports expenses?” Such attention to the merciless, nonstop barrage of details, such painstaking focused intention was certainly all about money.
                But from the incessant receipts, discussions, budgets, and decisions, there has emerged evidence of Ramsey’s statement.  For instance, last spring, we started to save for a new sofa, but now we don’t even care about getting one. Our old sofa is visibly worn, but it’s comfortable and sturdy. I can live with that. And while I love going out for dinner, I find more and more that I’m enjoying the company of friends and family around our own table – whether things are tidied up or not. Furthermore, I used to feel an obligation every time our daughters would tell us about a friend’s parents taking them out to dinner or treating them to a movie. How will I pay them back? I’d wonder. Now I just think, That was nice. So while there have been nit-picky money details in our debt reduction, big-picture results are emerging: We’re less materialistic; we’re more content with what we have; DH and I have a better relationship as our increased communication dissipates stress and irritation; we don’t care what “The Joneses” think of our furniture, and we don’t feel pressured to live up to their lifestyle. We’re more confident. More at peace.

More Important Than Money

                I know a young couple who are in the process of international adoption. They’ve spent thousands of dollars knowing that there is no guarantee that they will have a child in the end. They’ve got hope and reality well balanced, and they’re doing what they can to make things work out. “The way I look at it,” said the said the potential dad-to-be, “it’s only money.” And of course he’s right.
I know a recently married man who was unable to sell the house he owned when he was single. The vacant home became a sink-hole of time and money, and recently, matters got worse when water from a burst pipe worked its destruction to such an extent that he thought he’d have to declare bankruptcy. As it turns out, the house can be salvaged without breaking the bank, but it means he has to take on thousands more in debt. “The renovations will actually make the house more appealing so that it will have a better chance of selling in the spring,” he said. I was amazed at how well he was taking his bad luck. “Besides,” he said, “it’s only money.”
My hope and prayer is that the young couple will bring home a child before long. And that my friend will sell his house as soon as it’s market ready. And then, I hope that they will all get to the business of paying off their debts. Because there are big-picture issues at stake: communication; relationship; confidence; peace. And these are worth a sometimes maddening focus upon the minutia. They add incalculable value to the households where they settle in. Good for marriage. Good for children. And they free us from the life-sucking mess so often brought on by financial setbacks, allowing us to say, without irresponsible denial or false arrogance, but in simple truth, “It’s only money.”   
Comments are welcome:
1.  Click “Add a comment” at the bottom of this post. (If you don’t see it, click first on the “Prudence Debtfree” link below to go to my profile. Then click on the link “One Couple’s Journey out of Debt – the Ramsey Way” to return to the posts. You should now see the “Add a comment” link.)
2.  Type your comment in the box. (Feel free to leave your name/initials/a pen name – or not.)
3.  From the “Comment As” menu, select “Anonymous” (bottom of options list).
4.  Click “Publish”.
5.  Type the two distorted words given (to prove you’re a human).
6.  Click “Publish” again.
Comments written for posts published within the last month will appear immediately.  Comments written for older posts will appear within a day.  Ads and disrespectful comments will be removed.  Comments about your own experience with or views on debt are welcome, as are comments that encourage, question or advise.

Debt, Pet & Vet

DH = Dear Husband
DD2 = Dear Second Daughter
            A colleague who is a single mom and who has shared with me some of her financial stress told me a couple of days ago that she’ll probably get a dog. “Don’t!” I said. I usually filter my urge to advise – something that has grown steadily since DH and I started our journey out of debt nineteen months ago, but there was no filtering here. “There will be unexpected expenses at just the worst times.” Unfazed by my adamant position, she cheerfully repeated her intention to buy a dog soon. I nodded my head. Filter in place.
            We bought an adorable Cavalier King Charles Spaniel puppy just over seven years ago – right in the midst of DH’s under-employment and our financial distress. Crazy. But if someone at that time had given me the advice that I offered to my colleague this past week, I wouldn’t have listened either. DD2 was begging nonstop for a dog, and we had become very partial to the King Charles breed.  A chance encounter with a breeder sealed the deal, and just before Christmas of 2006, Rocky came home to our family. He has brought huge doses of sweetness and delight to our household, and we love him dearly.
            Rocky has developed some bad teeth (in spite of pricey dental food), and early Thursday morning, I brought him to the vet to have them scaled – and one or two possibly removed. In addition, we were advised, to have an x-ray taken to make sure that the bladder stones he’d had in the summer were gone. We were also advised to have his blood tested. And his urine. Okaaaaay . . . And how much would this all cost? Close to $1,000. Gulp.
            Later on Thursday, just after noon, DH called me at work to let me know the vet had phoned. The x-ray revealed an enlarged heart and fluid in the lungs, not to mention another stone in the bladder. Work on his teeth, and the removal of the stone, both of which would require a general anesthetic, could not be done due to the risk of heart failure. Yikes! The vet was advising us to go to an animal hospital to see a heart specialist for dogs. I didn’t know such people existed. Okaaaaay . . . And how much would this cost? “Three or four hundred dollars,” DH reported. But that would just be for the consultation. When I picked Rocky up after work, the receptionist said, “I could give you the name of another animal hospital that is about half the price.”  In a city two hours away. How expensive was this really going to be if we were getting such a heads-up?

How much should we spend on our sick pet?

            Once again, my regular reading of posts written by other debt bloggers, which I find via Twitter, brought me to a very pertinent article last night posted by Frugal Rules: “Ask the Readers: How much are you willing to spend to save a sick pet?” Writer Ellen Cannon shares the story of her efforts to bring her kitty Zito back to health after kidney abnormalities were discovered. More than $3,000 later, the cat died. Her conclusion is that she put poor Zito through prolonged pain and that she should have let nature take its course. This is the type of story I hear far too often.
            Rocky is snoring contentedly behind me as I write this post. I’m torn. We have our appointment with the specialist, but we know that we won’t get any guarantees – either for his health or for the cost of treatments.  We could easily be on the brink of parting with thousands of dollars – $460 for a series of tests; $320 for a procedure; $150 for medication; another consultation; another series of tests . . . Where is that line in the sand? We don’t know. All we know is that we want to do what we can for him. If you have had a Cavalier King Charles Spaniel treated for heart disease (a common problem for the breed), I would be very interested in hearing about it.
A pet dog is a wonderful addition to any person’s life. Filled with love and loyalty, joy and personality, Rocky means a great deal to us. But I still stand by the unwelcome advice I gave my colleague this week: If you are struggling financially or are trying to pay off debt, don’t buy a pet. 
 
Comments are welcome:
1.  Click “Add a comment” at the bottom of this post. (If you don’t see it, click first on the “Prudence Debtfree” link below to go to my profile. Then click on the link “One Couple’s Journey out of Debt – the Ramsey Way” to return to the posts. You should now see the “Add a comment” link.)
2.  Type your comment in the box. (Feel free to leave your name/initials/a pen name – or not.)
3.  From the “Comment As” menu, select “Anonymous” (bottom of options list).
4.  Click “Publish”.
5.  Type the two distorted words given (to prove you’re a human).
6.  Click “Publish” again.
Comments written for posts published within the last month will appear immediately.  Comments written for older posts will appear within a day.  Ads and disrespectful comments will be removed.  Comments about your own experience with or views on debt are welcome, as are comments that encourage, question or advise.

Debt Reduction Disappointment

DH = Dear Husband
At the beginning of January 2013, I wrote about our first slice out of Debt #3 – the business debt. A whopping $80,800 it was huge compared with Debts #1 and #2, so I knew we were in for something different. “I remember thinking, months before we would start to take on Debt #3 . . . that it would be excitingto pay it down. . . [W]e would have variable payments each month, following the variable monthly revenues of DH’s business.  Exciting, right?” I was right about one thing. It was a year of variable payments.

1 payment of $10,000 (December ’12)
1 payment of $7,000  (November ’13)
1 payment of $5,000 (October ’13)
1 payment of $4,500 (January ’13)
2 payments of $2,500 (February & May ’13)
2 payments of $0 due to slow business (March & April ’13)
4 payments of $0 due to $12, 000 for new roof & tree removal (June-September ’13)
           
            By the beginning of December 2013, Debt #3 had broken through the $50,000 mark, and we knew that December would be a banner month. We had put aside money to give DH a much needed vacation (more on that later), but even so, revenues from the Christmas rush promised a very healthy slice out of Debt #3. “I’ll go to the bank to put $5,000 against the debt before the week-end,” DH said to me about a week and a half before Christmas. I told him there was no rush.  Really, I was hoping that he’d put $6,000 against it, and that the next week would bring in enough business to make that happen.
            But in the swirl of off-the-chart business came off-the-chart expenses. Harmonized sales tax (HST); personal income tax; bigger than usual royalty payments; bills for huge purchases of supplies . . . The balance in DH’s business account dwindled relentlessly. In the end, he put $1,000 against the debt. Ugh!
            It’s one kind of disappointing to have slow progress because of slow business, but it’s another thing to have slow progress in spite of hopping business. That old attitude that says, There’s no point, presents itself. I think of that scene from the movie Up in which the money jar keeps getting smashed to pay for one unexpected expense after another. It’s a losing battle. Circumstances will conspire to undo your progress. Look at how vigilant you’ve been – and you’re not even half way through this business debt.One part of me knows that I have to ignore that voice, but another part of me thinks it’s got a point.

Debt Fatigue

            I’ve written before about how important it is for me personally to read the blogs of other people with experience in paying down debt. This week, a title that caught my mood was “I Don’t Want To Pay Off My Debt Anymore!” Writer John Schmoll refers to debt fatigue – which means exactly what it sounds like: the state of burn-out in terms of paying off debt. “Simply put, this debt fatigue is an emotion. The key is to recognize this emotion, remember that the situation you’re currently in is temporary, and know that giving up will only make matters worse. Easier said than done at times, I know, but incredibly important to be aware of.” Schmoll has been debt-free for ten years now. It gives me perspective to know that people now living life-after-debt went through struggles similar to mine. In this case, Schmoll let the debt fatigue pass. And it did. And he’s a decade into debt-freedom.
            Last year at this time, I was excited about paying down Debt #3. Not so now. But I’m recognizing my debt fatigue, and I’ll let it pass. 

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.)

Personal Debt Resolutions: Head-Knowledge vs. Soul Insight

“Bank of Montreal says personal finance issues is the No. 2 topic for Canadians who are
making New Year resolutions for 2014.” According to this Canadian Press article published in the Globe and Mail, only health & fitness comes out ahead of personal finances for 2014 where resolutions are concerned. Two years ago, in January 2012, GD Sourcing claimed that paying off personal debt came in 4th after getting into shape (3rd), getting more enjoyment out of life (2nd), and spending quality time with loved ones(1st). Even though concerns about personal finances have clearly risen over the last couple of years, and even though more and more Canadians are resolving to do something about it, personal debt levels peaked in 2013. Our average debt-to-income ratio hit 165% last year – meaning that for every $1.00 of take-home pay, the average Canadian household owed $1.65. With all of these resolutions, will that number come down in 2014?

“Knowing” the Truth vs. “Tasting” it 

            In his book Awareness, Anthony de Mello refers to the experience of an alcoholic priest on the road to sobriety. “You know, I had all the information I needed; I knew that alcohol was killing me, and, believe me, nothing changes an alcoholic . . . I discovered one thing that changed me. I was lying in a gutter one day under a slight drizzle. I opened my eyes and I saw that this was killing me. I saw it, and I never had the desire to touch a drop after that.” De Mello, a Jesuit priest, explains the phenomenon experienced by this man: “ . . . St. Ignatius . . . calls it tasting and feeling the truth – not knowing it, but tasting and feeling it . . . When you get a feel for it you change. When you know it in your head, you don’t” (de Mello, 168).

 In the Gutter

            I believe that the growing concern among Canadians regarding financial fitness results largely from head knowledge. We read the statistics; we hear the warnings; we know of people facing hard times; we might even have some personal experience with hard times. Divorce, job loss, illness – the unexpected happens, and personal finances are often severely impacted. We know there is an issue to face. But if most of us are like that alcoholic priest, it’s not until we come to consciousness under a drizzle in the gutter that we’re really going to get it. It is one thing when we know; it’s another thing when we gain insight. There is an immediacy to the insight illustrated by the story of the priest – who had already “known” for quite some time.

 Change through “Doing” vs. Change through “Awareness”

On the topic of New Year’s resolutions, I think de Mello would offer some caution: “You see change take place in you, through you; in your awareness, it happens. You don’t do it. When you’re doing it, it’s a bad sign; it won’t last. And if it does last, God have mercy on the people you’re living with because you’re going to be very rigid . . . But in awareness, you keep your softness . . . your flexibility, and you don’t push, change occurs” (de Mello, 167). I have to consider these words in light of my own experience. I agree that head knowledge on its own is insufficient when it comes to bringing about real change. That’s why the vast majority of New Year’s resolutions fizzle out. I agree that a foundation-shaking wake-up call is so often what it takes to lead people to transition – and that sometimes the resulting change can be remarkably seamless. But I also believe there is some willful “doing” that is necessary. Unlike the priest in de Mello’s story, for instance, the people I know who have hit rock-bottom with regards to alcohol have not changed without ongoing support. They’ve faithfully attended AA meetings.  A woman I know who quit smoking after 32 years did so through a hospital initiative. The people I know who have gained and maintained physical fitness have done so with the help of gym memberships and guidance for nutrition. 

            From what I can see, change is inspired and initiated through insight – often brought on by a harsh wake-up call – and it is given a framework by “doing” programs. My husband and I had our debt-reduction wake-up call after his years of unemployment. Our framework came with the steps outlined in Dave Ramsey’s book, The Total Money Makeover. Though we did make some moves to address our debt before reading Ramsey’s book, we didn’t do so effectively until we adopted his plan as our own. Wake-up call first. Framework second. That’s how it was for us. 

            I’m very interested to know what you might have to say on this matter – whether it’s for debt reduction or some other change that you’ve experienced. Did it happen from a flash of insight on its own? Did steady, intentional effort play any role? Did you become “rigid” and difficult to live with? Or was the change smooth and peaceful? I’ll be attuned to the stats this coming year. Canadians are concerned about their personal finances. We’re making resolutions. Is it simply because we “know”? Or are we finally “aware” – that we’re in the gutter and it’s raining? The next twelve 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.)

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.
 

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 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.  

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.)


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.)