Oprah’s Climb out of “Struggle” = Fuel for My Climb out of Debt

DD3 = Dear Third Daughter
DH = Dear Husband
              When news media put out the message that Oprah was “struggling” with OWN, she internalized it.    “I was already feeling everything they were saying,” she admitted, and the cycle was vicious.   But she shifted that paradigm.  “I wasn’t ‘struggling’.  I was in a hole, and I was climbing.”  Her goal became her step up to the next foothold; then getting a firm hand on that ledge a little bit higher up; never daunted by the entirety of the vertical journey, her focus was to do the next right thing.  And she has done some formidable climbing.

An evening with Oprah

               I spent an evening with six colleagues and Oprah this week – plus another fifteen thousand people.  Through my years of part-time work and extended maternity leave, Oprah was a guest in our home almost every afternoon at 4:00.  I remember one summer afternoon, at the neighbourhood public swimming pool, telling three-year-old DD3 that we had to go home.  “Is it Oprah time?” she asked.  I caught the smiles of other moms, many of whom no doubt were also scheduling their afternoon swims around the Oprah Winfrey Show.
             Let me just say that the evening was fabulous.  It was a combination of celebrity hype and the homey gratification that comes with seeing an old friend again.  Miss Winfrey offered rich testimony; she shared wisdom that resonated; and she made us laugh out loud.  (I don’t think I ever before appreciated just how funny she is.)  Sitting with my colleagues, I was struck by the versatile applicability of her message.  She touched each one of us in our different situations.
             For my part, I understood her reflections upon “struggling” – not because I ran a network, but because I started out ten months ago with a $257,000 debt.  I could identify with her reality of hopelessness, negative messages, and vicious cycles.  And I could see the value in that paradigm shift, so I’m shifting too.  I’m not struggling; I’m in a hole and I’m climbing.  If I look below me, I can see the nearly $50,000 that we’ve already taken off that gargantuan total.  But if I look up, it won’t be to focus on the totality of our still very steep and long climb; it will be to focus on doing the next right thing.

Oprah on “Luck”

             “Luck is preparation meeting the moment of opportunity,” she said.  In the first ten months of our journey out of debt, DH and I have had episodes of such luck.  By budgeting, tracking, being thoughtful and intentional with expenditures in the first months, we were prepared for November’s windfall (See “Debt and Uncertainty . . .” and “Debt Reduction and Guilt . . .”); and we were prepared in December and January when the Christmas rush put DH’s business on steroids.  In the three months from November 2012 to January 2013, we paid off $27,300 of debt because we were prepared when the moments of opportunity came.  In the three months from December 2011 to January 2012, we had similar opportunities, but because we were still in financial La-La-Land and not remotely prepared, we had no such luck.
             Lately, the moments of opportunity have been keeping themselves at bay, and combined with our burned-out sloppiness with budgeting (See “Debtors Anonymous [& Our Property Tax”]) we haven’t been making much progress.  But I’m focused now on stepping up to that next foothold, and I’m reaching for the ledge just above my fingertips.  Opportunity will come again; I’m preparing myself for it.
It’s been a long, long winter.  “I was told it was going to be spring,” Oprah said soon after she came onto the stage, her mock sense of having been tricked making us all laugh.  “And now they’re telling me, ‘Last year at this time, it was warm and sunny here.’”  And it was!  Right now, however, we’re dealing with the after-effects of a snowstorm.  Spring remains aggravatingly out of reach, but going to see Oprah was an even more powerful energy-boost than that wonderful season.  Miss Winfrey gave me a sharpened vision and fuel to my efforts.  By sharing her strategies for triumph, she made me more certain of my own.

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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.)

Stereotypes: Girls in Training for Debt

   
DD3 = Dear Third Daughter
                 A couple of months ago, driving DD3 to the library, I was on a rant.  Feeling burned out, I was going on about the oppressive number of items on my to-do list.  “I’m not going to do it,” I declared emphatically about one such item.  “It’s not urgent, and I am not going to do it.”
               “You go, Mom.  Good for you!” said DD3 supportively.  “You’re a strong, independent, black woman.”
               Where did that come from?  I’m of English and Irish descent – about as white as possible.  “Why did you say that?”  I asked, laughing.  DD3 didn’t give me a straight answer.  She was just pleased at having successfully jolted me out of rant mode.
               A few days later, a colleague at work was venting some frustration about her students. “Sometimes I just have to put on my ABW,” she said.   I asked her what that stood for.  “Angry black woman,” she answered.
               My colleague is black, so that part made sense to me.  But I was struck by the similarity of her comment to DD3’s, and so I shared my “strong, independent, black woman” story with her.  She laughed too, and then gave me an explanation.  “You think about the way black women are represented on TV,” she said.  “They’re either angry, powerful spit-fires or they’re helpless victims.”  I thought about it, and I had to agree with her.  I wondered to what extent those stereotypes impacted our female students of African descent.  Were they going to be moulded into one or the other?  Angry and powerful or else victimized and despairing?  Would there be obstacles to their becoming gentle and competent?  Happily energetic and productive?  Nerdy and fulfilled?  Stereotypes shape us profoundly, so I hope that this one gets flushed away.

The credit card princess and the struggling diamond-in-the-rough

               I see similar stereotypes for teenage girls and money.  There is the credit card princess who spends her life at the mall (like Alicia Silverstone’s Cher in Clueless), and the struggling diamond-in-the-rough who tries to balance work and school and helping out at home, always putting others ahead of herself (like Molly Ringwald’s Andie in Pretty in Pink).  Each seems doomed either to perpetual superficiality or to perpetual drudgery, but if all goes well, after overcoming a series of obstacles, each can luck out with a rescue by Prince Charming.
               There is ample evidence of the credit card princess among the friends of my daughters.  Thirteen-year-olds with a taste for Lululemon and an urgent need for every conceivable electronic device; sixteen-year-olds with a sense of entitlement to organized school trips, whether to ski slopes, European destinations, or the sunny south; twenty-somethings with the right to stylish clothes andnicely furnished abodes and a car right now . . .  Where Mom and Dad can’t or won’t keep shoveling in, the credit card takes over, and these young women get launched into lengthy relationships with debt.
                I have come across more than one struggling diamond-in-the-rough at my school.  Bright, hard-working girls who spend a full day in classes and then go to part-time jobs and responsibilities at home, taking care of everything but themselves.  The girl whose parents were beside themselves, not knowing what to do about their son, and she, wanting to placate her brother, giving him money on the sly to the tune of $1,000 – which she knew she would never get back.  The girl with an overwhelming sense of financial obligation to extended family back home, in a war-ravaged, impoverished country.  The girl who gave her mother money, earned from her after-school job, every time her mother’s social assistance funds ran out.  Last week, deeply concerned about one student who was clearly exhausted, I arranged for her to see the nurse practitioner who visits our school.  “You are working yourself to death,” was the diagnosis.  A doctor’s note for limited hours at work and a firm command to get some sleep were among the treatments.
               The stereotypes of the credit card princess and the struggling diamond-in-the-rough need to be confronted.  Girls can be taught the power of planning their finances – of patiently measuring their expenditures and their savings.  Girls can be guided in the difference between helping loved ones and enabling them.  Girls can be encouraged to recognize and look after their own needs – and not to feel selfish for being unable to look after everyone else’s.  Such a girl won’t need to be rescued by Prince Charming.  Unencumbered by neediness, she will less likely be swayed by phony “princes”.  Wise with her own money, she stands a good chance of recognizing a man who, among other stellar qualities, is wise with his, and of avoiding today’s number one killer of happily-ever-after:  financial stress.
               When DD3 called me a “strong, independent, black woman”, she was tapping into a stereotype that she couldn’t articulate, but that had seeped its way into her mind.  Stereotypes are powerful, and a first step in overcoming their influence is to recognize them and to recognize the ways in which they shape us.  Girls are in a sorry state if the stereotypes of the credit card princess and the struggling diamond-in-the-rough are unchallenged in pushing them into their respective moulds.  We can do better for the girls in our lives.

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Monthly Budgeting for Debt-Repayment

DH= Dear Husband
DD3 = Dear Third Daughter
 
            “We have made budgeting and planning our future together enjoyable and fun,” say Cheryl and Ken Rhoads.  “It’s like dating again!” (Ramsey, 75)  Sarada and John Marsh are equally enthused by their budgeting:  “It might seem boring, but we’ve turned our regular budget/calendar meetings into enjoyable, future-planning dates!” (Ramsey, 98)  These upbeat testimonials, included in Dave Ramsey’s book, The Total Money Makeover, do not jive with my experience.  DH and I have a very hard time getting together to fine-tune and follow-up on our monthly budgets, and when we do, it’s not “enjoyable”.  It’s nothing like a “date”. 
We have learned from sloppy auto-pilot budgeting (See post “Debtors Anonymous [& Our Property Tax”]) that we really do need to go over our projected expenses together, but there’s a tension in any budgeting session we have. And while it feels good to have things sorted out once it’s done, we approach budgeting with dread.  Sort of like house-cleaning.   
            Our progress along the path of debt repayment has been very limited over the past two months in comparison with the great strides we made in December and January.  We started paying off Debt #3, DH’s mammoth business debt, in December, after having paid off our two smallest debts.  We have been using money generated by his business to do so, and with the Christmas rush and its attendant ripple effect, we managed a whopping $10,000 in December and an impressive $4,500 in January. 
           In February, DH went to one of his franchise’s two annual training programs, so for one full week, he generated no income.  His three working weeks in February were very strong, and we were able to put a respectable $2,500 against the business debt.  Between the start of December and the end of January, Debt #3 went from $80,800 to $66,300, and at the end of February, it sat at $63,800.
            March has been a different story.  The business has been beset by technical glitches.  DH essentially operates alone, so when technical problems arise, it can mean a time-sink of several days.  Furthermore, March has been a month of huge expenses.  We had the big property tax bill to pay, which our too-busy-to-budget sloppiness made difficult. (See post “Debtors Anonymous [& Our Property Tax”])  We’ve also registered DD3 for spring and summer activities and camps, benefitting from the early-bird sign-up rates that always passed me by before I became committed to money smarts.  The thing is, even though these rates are good, we still have to pay them – and paying for all at once has proven to be daunting.  As I predicted earlier in March, we have not been able to put anything against our debt this month.  Logically, I get it, but it’s still disheartening. 
            Looking ahead to April, we’re committed to getting back to the basics.  We’ve set out an April budget which, if things go reasonably well for DH’s business, should allow us to take another respectable slice out of Debt #3 by the end of the month.  We will be vigilant about tracking our expenses and reconciling them with the numbers we’ve set out.  We will “take care of the pennies so that the dollars take care of themselves.”  Hopefully at the end of April, we’ll measure our success for the month, feel good about it, and launch into our budget for May without dread.  And perhaps before this journey out of debt is finished, DH and I will have learned to embrace our budgeting as the Rhoads and the Marshes do.  Like a date.
 

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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.)

DD1’s Debt-Avoidance: “Stretching” & Living Large

DD1= Dear First Daughter

Susan Cain on “stretching”

            “A sizable part of who we are is ordained by our genes, by our brains, by our nervous systems.  And yet . . . we have free will and can use it to shape our personalities . . . We might call this the ‘rubber band theory’ of personality.  We are like rubber bands at rest.  We are elastic and can stretch ourselves, but only so far” (Cain 117-118).  I like this rubber band theory from Susan Cain’s book Quiet:  The Power of Introverts in a World That Can’t Stop Talking, both because it ascertains that we are fundamentally who we are, and because it affirms the possibility we have of developing – of stretching.  I’m annoyed by the, “If you can dream it, you can become it,” type of inspirational message that I have often read and heard.  It simply isn’t true.  But I’m even less fond of messages to the effect that we’re stuck where we are.  “You can’t teach an old dog new tricks”; “People never change.”  So defeating.
 
            The rubber band theory comes into play big time in the avoidance of debt.  DD1, who is working on her master’s thesis at a university out west, recently found herself in a challenging situation.  She needed to study material that can only be accessed at the New York City Public Library, but she didn’t have the funds to fly to New York.  Ever steadfast in her avoidance of debt (See post “A Temptation Back Into Debt”), she started to seek out a solution.  She knew that her university provided funding for graduate students presenting papers at out-of-town conferences, and so she checked to see if any conferences related to her studies were going to be held in New York City in the near future.  She found one, submitted her application, and was accepted.  This month, she flew to The Big Apple.
           “The conference was grand even though I nearly shook from nerves,” she wrote on the postcard she sent to us.  (Yes, she really did write “grand”.)  So it wasn’t an easy ride.  A lowly master’s student presenting alongside Ph. D  students and professors will certainly be intimidated.  But she did it.  She stretched.  And her trip was almost completely covered by the funding she received to present her paper.  “I’ve never worked in a more beautiful place,” she wrote of the New York City Public Library.  “I’m finding lots of thesis fodder at the archives & am finding time for some fun too!”  

DD1’s “Glee” Moment

            Now how is this for fun:  DD1 grew up with a boy at church whose singing talent got him a place at Julliard studying opera.  When she knew she was going to New York, she contacted him, hoping they would be able to get together.  They had troubles connecting through her week there, but on her last evening in NYC, she received a phone call from him.  “A bunch of us have just finished our auditions for the master’s program, and we’re going to a karaoke bar.  Would you like to come too?”  DD1 spent four hours that night singing karaoke with about twenty students from Julliard.  The highlight for her was “Summer Nights” from the musical Grease, which she sang with her childhood friend while the other Julliard students did back up. (“Tell me more; tell me more; like does he have a car?”)  I’m pretty sure that’s a memory that will keep for her whole life.
            We are fundamentally who we are, but amazing things can and do happen when we stretch.  And debt-avoidance in our society can be a real agent of such stretching.  DD1 is a poor student, and she lives like a poor student – in a basement apartment with two room-mates, taking public transit to get to classes, tutoring and working part-time to make ends meet.  Public speaking makes her nervous, especially in new situations.  But she’s putting her nerves to the test; she’s overcoming her finances; and she’s living large.  DD1 has managed to avoid debt, and in so doing, not only is she setting herself up well for her future, she is embracing a present that is, in the best sense, rich.
           

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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.)

Your Debt-Reduction Sweet Spot

DFF = Debt-Free Friend
DH = Dear Husband

Excercise machines turned clothes line

            Most people who have treadmills or elliptical machines in their homes use them to hang up laundry.  They purchase the equipment filled with good intentions to make regular use of it, and perhaps they do for the first week or month.  But before too long, the exercise apparatus becomes part of the landscape in a basement or storage room cluttered with neglected items that collect dust – or take on the burden of damp clothes in need of air-drying.   
            I know exactly one person who faithfully uses her elliptical machine.  DFF, who has been fiercely prudent with her money since day one – and who is sitting prettier than anyone else I know as a result – is also very disciplined when it comes to that exercise machine.  She bought it after all, and she never makes a purchase lightly.  DFF has done an elliptical work-out of at least thirty minutes each morning, with very few exceptions, since the day she brought the equipment home.
            That wouldn’t work for me.  I get very bored with treadmills and the like.  I can see that it would be practical to work-out at home and that it would save the cost and travel time involved with a gym membership, but if I adopted the fitness-at-home strategy, I simply would not exercise.  And I’d feel guilty about the idle equipment in my basement.  For work-outs, I function best at a gym, complete with classes and super-fit leaders barking out challenges (“Only ten more seconds!  Don’t put your feet down!  Don’t put your feet down!”) and encouragement (“You are a machine!”).  I aim for three work-outs per week, and I often manage to do them.
            For some people, it is enough to have a gym membership without the classes.  They go from weights to treadmill to mats on their own.  Others need a personal trainer to make it happen – someone who can offer a specific, custom-made program.

“Sweet Spots”

            I’m reading Susan Cain’s book, Quiet:  The Power of Introverts in a World That Can’t Stop Talking, and as an introvert who thought she’d already had this thing figured out, I’m blown away by how much there is to glean from it.  “Once you understand introversion and extroversion as preferences for certain levels of stimulation, you can begin consciously trying to situate yourself in environments favorable to your own personality . . . neither boring nor anxiety-making.  You can organize your life in terms of . . . what I call “sweet spots”, and by doing so feel more energetic and alive than before” (Cain 124-125).
            I can see how this “sweet spot” theory works for different people in the various ways they pursue physical fitness.   I can also see how it applies to those of us trying to become financially fit via debt-reduction. 
            There are people like DFF, either born with financially fit genes or else imbued with money smarts from early childhood.  DFF had a small mortgage for a few years, but she’s been debt-free since her early thirties.  Then there are those who slip into the norm of debt but then hear news reports and listen to warnings of the risks inherent in a high debt-to-income ratio.  “Well, I guess I’d better reduce my debt,” they decide.  And they just do it. 
            It took more for me.  The news reports slipped right over my head and the warnings sounded like Charlie Brown’s teacher, “Whaa-whaa.  Whaa-whaa . . .”   An in-your-face experience of financial distress caused by DH’s career loss is what it took to make us desire debt reduction in the first place.  We found our sweet spot in a book with a step-by-step program set out by an expert we trust (Dave Ramsey’s Total Money Makeover).
            You might need more than a book.  You might require a “personal trainer” – someone to guide and advise you through the minutia of your personal finances.  You might need a support group like Debtors Anonymous to address the despair you feel about ever getting financial control.  Don’t let anyone nag you with, “You don’t need that.  You just need to . . .”  It’s yoursweet spot.  You know what you need.
            The point is, we all do what we have to do.  If one strategy doesn’t work, we move on to the next.  If the treadmill is collecting dust in some corner of your house, sell it and buy a gym membership.  If your efforts to reduce debt on your own are failing, open up to the strategies of experts.  Buy a book; follow a program; or join a support group.  Each person’s sweet spot is unique.  Identify yours and make an effort, as Susan Cain says, to “situate yourself” in it, “. . . and by doing so feel more energetic and alive than before.”
           

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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.)

Debtors Anonymous (& Our Property Tax)

DH = Dear Husband

Debtors Anonymous

            So there really is a Debtors Anonymous.  You’d think that after ten months of focused debt reduction I’d be aware of that fact.  But it took someone’s anonymous comment to bring DA to my attention.  Last week, I wrote about my evening with a friend who was facing her own indebtedness, and I compared it with an AA meeting.  (See last week’s post, “Sharing A Fellow Debtor’s Moment”.)  A reader commented anonymously to let me know that DA actually exists and to provide a link to a DA site.
             In looking through the site, I am amazed at the extent to which my own experience is outlined and the precision with which my money habits are identified.  I am also encouraged by the fact that, in reading through “The 12 Signs of CompulsiveDebting” I am able to say, “I used to do that, but not anymore.”  One of the signs of compulsive debting is “3. Poor saving habits. Not planning for taxes, retirement or other not-recurring but predictable items, and then feeling surprised when they come due . . .” This month, one of our two annual property tax bills comes due, and we are “surprised” by the fact we’re not ready for it.  

Annual property tax “surprise”

             We’ve been too busy since the Christmas rush with DH’s business.  Like the proverbial juggler with too many balls up in the air, we’ve been dropping them.  The house isn’t getting cleaned.  The dog isn’t getting walked enough.  We haven’t sat down to make a monthly budget since October.  We’ve been going on auto-pilot, and our money is in a sloppy state.

            Furthermore, we have never adopted the habit of checking to what degree we’ve stayed true to our monthly budgets.  For instance, we’ve assigned $200 per month for “household” expenses – things like J-Cloths and laundry detergent.  But we’ve never checked at the end of any given month to see whether or not we’ve gone over budget in that area.  We’ve also budgeted a certain monthly amount to cover the big property tax bills, but because we haven’t kept adequate track of the other areas of the budget, they’ve bled into each other, and our tax money has gradually dissipated.
            When DH told me that we might not have enough to cover our property tax bill, I am pleased to note that I was remarkably serene about it.  It used to be that any financial crunch sent ripples of anxiety through our household.  It was truly awful.  This time, I was able to say that I understood why we were facing the crunch, and we moved on to the matter of how to handle it.  Would we use the money we’ve been saving to buy a new TV and sofa?  Maybe.  Would we use the money from our small TFSA (tax-free savings account.  We set it up before we began our journey out of debt and have continued putting $101 per month into it.)  A little more awkward, but a possibility.  Would we extend our line of credit?  NO!

Time to regroup

            As it turns out, we’re going to squeak by without having to dip into any savings.  We might end up with no debt repayment for the month of March, but I’m OK with that.  DH and I have to regroup.  We can’t go on auto-pilot when it comes to budgeting.  We have to make the time both to create a monthly budget and to assess how we’ve done on a month-by-month basis.   “Do not be discouraged if you cannot keep perfect records,” says Debtors Anonymous on its “Getting Started” page. “If you lose track, begin again as soon as you can. We believe in progress, not perfection.” 
           

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Sharing A Fellow Debtor’s Moment

CF2 = Church Friend Number Two
DD3 = Dear Third Daughter
DH = Dear Husband

Appeal of AA

            I know three people who belong to AA, and whenever I talk with them about it, I experience a bit of a yearning.   I feel the draw of their community.  People shedding their pride; facing their shame; acknowledging the truth; opening up to support and healing; celebrating victory . . . That’s how I picture AA.  And to me, it’s a very desirable picture. 
            Of course alcoholism is not the only affliction that people typically hide under layers of deception, and AA meetings are not the only venues for authentic relationship.  I believe there are parallels between bad money habits – medicating with out-of-control purchases – and substance addictions.   (See previous post, “Debtor’s Relapse”.)  And I think I got a little taste of AA-style community last night when I sat across from CF2 at Tim Hortons, passing the time while DD3 was at soccer. 

‘DA’ at Tim Hortons

            CF2 has known about our journey out of debt from the beginning.  A debtor herself, she has expressed a wide-eyed, head-nodding understanding of the challenges we’ve faced as well as an encouraging support for the triumphs we’ve experienced along the way.  “I’ve got to get my money in order,” she has often said with a drawn out sigh, eyes rolling, head shaking, and a bit of a growl.  But our occasional money conversations have always been initiated by me, spring boarding from something DH and I have experienced.
            Last night, it was all about her.  Included in the back-and-forth e-mails that we had sent each other to arrange our get-together was her message, “I’ve done some banking….we can talk about it then….in a nutshell………switching mortgages (institutions) paying debts off and paying them at a lower rate. I’m stressed…..”  You can bet that got my attention.  Not just a shake of the head and a sigh from CF2.  She was getting real and taking action.  And like many of us who confront our demons, she was unsettled, stressed, scared.
            I picked her up, and as soon as DD3 had left the car to go to her soccer practice, I said, “So, tell me.”  And she did.  The floodgates opened.  This time, I was the one with the wide eyes and the nodding head.  Our conversation was spring boarding from her money reality, and it didn’t stop until we picked DD3 up again.  In fact, it didn’t stop even then.  And I really knew that this was special – not just a venting session – when CF2 blurted out her numbers.  She had never disclosed that kind of information to me before, and I had never asked her to.  She broke the taboo of her own volition; the truth was out. 
            When a man struggling with obesity actually discloses his weight to a friend; when a husband admits to his wife that his “harmless” dabbling in porn is actually a debilitating addiction; when the party girl goes to her first AA meeting and says, “I am an alcoholic,” it’ a sacred moment.  And when CF2 shared her debt numbers with me, our little table at Tim Hortons was all at once a sanctuary.  I knew that this was just such a moment.
            And I could relate to so much of what she said.  “I need to make a budget.  I don’t know how much I spend because I throw out all my receipts.  Before my appointment at the bank, I didn’t even know how much I still owed on my mortgage!”  That’s the debtor’s head-in-the-sand syndrome.  “I’ve tried to get my financial act together before, and I’m afraid I’m going to fail this time too.”  That’s the debtor’s call to acknowledge, identify, confront, and triumph over agents of inner sabotage.  “For me, it’s all or nothing.  I’m no good at planning or detail.”  That’s the debtor’s challenge to practice some measured and intentional discipline – which goes absolutely against the grain.  CF2 needs to get current.  (See previous post “A Report Card for June . . .”)  She needs to dig into her bills and receipts.  She needs to set up a spreadsheet.  And she’s going to. 
            I feel honoured to have been sought out by CF2 last night – to have been invited to be a part of her journey.  And it had the added benefit of energizing my own pursuit of debt freedom.  There were misty eyes at our little table last night.  There was laughter too.  Beyond anything, there was authenticity.  It was a safe place for vulnerability to be exposed, and it was fertile ground for powerful support to take root.  I love that kind of interaction.  I’m pretty sure it was just like an AA meeting.
                 

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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.)

Navigating Changing Circumstances While Getting Out Of Debt

DH = Dear Husband

 DH’s busy business

            The reality of DH’s business has changed.  After an extremely busy Christmas season, he relaxed into the anticipated slowdown of January.  Only it didn’t slow down. February is typically a quiet month, and DH considered it his chance to catch up.  In relative terms, this month has been more tame, but when DH checked his numbers midway through February, they were still shockingly high.  Isn’t this what we were hoping for when DH purchased the franchise almost four years ago?  He’s a self-employed, small business, success story.  And we can hardly believe it.
            The thing is, he’s always working.  He really is.  Morning, noon, evening, night, and occasionally past midnight, seven days a week, his natural habitat is his office.  His work only gets interrupted by an intentional act of will.  DH manages to get in some family time, some social life, and some work-outs in a consciously scheduled way.  But what do you think has happened to the housework?

The housework battle

To recap the ongoing saga of our battle with housework, here are the key facts:
        We stopped hiring house cleaners when we started our journey out of debt in June 2012, meaning a savings of $200 per month.
        I was in serious debt with my own personal discretionary fund at the time (See “Discretionary Money:  His and Hers”), so we agreed that I would do the housework and use the monthly $200 to get me above zero.
        I have a significant loathing of house-cleaning, so this was no small deal, and I was glad when it was over.
        DH and I then decided to go 50-50 on the house-cleaning and to save the $200 per month for a flat-screen TV and a sectional sofa.
        Only we’re not splitting the house-cleaning.
        I’ve been doing the lion’s share.
        And I have some strong objections
Anyone who has been married for any length of time knows that when one spouse
becomes particularly busy, the other spouse takes up the slack.  With DH’s constant work, I’m doing the grocery shopping, the driving of our children to their activities, the cooking, the dishes, dog-walking, logistical arrangements to make plans come together . . . And all this on top of my day job.  In other words, I have become particularly busy too. 

Stalemate

            I brought this fact to DH’s attention last week, and he acknowledged it.  “So why don’t we hire cleaners again?”  I asked.  He recoiled at the thought and committed to house-cleaning on Saturday morning.  We would both put in four hours, and get it done.  I agreed and said nothing about my doubts.  As I suspected, Saturday came and went with no house-cleaning.  He had too much work to do.  I did not take up the slack.  And that’s how I plan to play it.  Let the dust bunnies take over.
           
            According to Dave Ramsey, it takes seven years for the average household to get out of debt.  In any household, there will be changing circumstances in the course of seven years.  We are very fortunate, in this case, that the changed circumstance is so positive:  DH is having more and more success in his business.  But we risk burning out if we don’t play it right.  Something has got to give.  I’d rather it not be our health or our happiness; let it be our housework.

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Personal Debt, Low Interest Rates, and Mark Carney’s Advice

   Prophet without honour . . . 

           “Now Jesus himself had pointed out that a prophet has no honour in his own country” (John 4:44).  I think that goes double when the country in question is Canada.  We Canadians tend to overlook the stars among us until they make it big on the international stage – at which point we’re very eager to point out that they’re Canadian.
One such bright light is Mark Carney.  He became governor of the Bank of Canada in February of 2008.  At that time, I had my head deeply buried in the sand when it came to all matters financial – whether personal, national, or international – so I couldn’t even have told you who Carney was when he took on the post.  Since I’ve been on a focused path to debt reduction, however, my awareness of the financial landscape has developed significantly.   So Carney has my attention.  Canada has done well, relative to other nations, in the face of the economic crisis of the past several years.  And while we can’t give Carney all of the credit for this fact, the general consensus is that he’s entitled to a great deal of it.

Prepare for a “brutal reckoning”

For years, Mark Carney has advised Canadians to rein in our personal debt.  He has cautioned us not to get sucked into the temptation to borrow more simply because interest rates are low.  “Low rates today do not necessarily mean low rates tomorrow,” he said just over two years ago.  “Risk reversals . . . can be fierce:  the greater the complacency, the more brutal the reckoning” (Alini).  Despite the warning, Canadians have continued to borrow more and more, our average debt-to-income ratio reaching a record high of 164.6 % by the end of 2012 (Beltrame).
But now, Carney has been recognized on the international stage.  This year, he will leave Canada to become “the first non-Brit to be named governor of the Bank of England in the storied institution’s 318-year history. Chancellor of the Exchequer George Osborne called the Canadian the ‘outstanding central banker of his generation’” (Beltrame).  With Carney’s international status as a financial rock star established, will Canadians start to listen to him?

Low interest rates → spending?

I’m not sure.  An article appeared in the Ottawa Citizen just last week entitled “Spend, Baby, Spend:  Policymakers Want Us To Cut Debt, Yet Make It Too Good Not To Borrow”.  In it, Terence Corcoran writes, with regards to Canadians’ record high levels of debt, “The official answer, from Bank of Canada governor Mark Carney on down, is Canadians need to start thinking about paying down that debt . . . Carney is essentially instructing Canadians to behave irrationally in the face of market signals, especially the 1% interest rate signal the Bank of Canada has sent since 2010.”  In other words, interest rates are still low, so of course we will keep borrowing, no matter what Carney advises.

Low interest rates → great debt-reduction opportunity

For those who see low interest rates as rationally leading to more borrowing, here’s an alternative thought:  Low interest rates make it relatively easy to pay down debt.  Yes, on their own, low interest rates do invite borrowing, but we have record levels of personal debt added to the mix, as well as a warning from our financial superstar that interest rates will go up.  I don’t like to believe that people are automatons – that we are programmed if interest rates are low, automatically to borrow.  I believe we are capable of taking in all aspects of our situation – to balance against current low rates the unprecedented size of our debts and the fact that the rates won’t last.  We have to consider what will happen when they rise by one or two percentage points.  How many hundreds of dollars per month will it add to each of our regular debt repayments?  Carney has warned us against complacency.  It makes sense to use the low interest rates of today to tackle our mammoth debts so that higher rates won’t become the instruments of a brutal reckoning tomorrow.
Canadians will be saying good-bye to Mark Carney in a few months, and Canada’s loss will be England’s gain.  Given his record and his status, his advice is worth heeding.  Don’t wait for Carney to save Britain’s economy before we listen to him.  Let’s benefit from the advice of our financial prophet while he’s still in his own country. 

Alini, Erica. “Econowatch.” Macleans.ca Household Debt and the Bank of Canada’s Anxiety
Levels in a Graph Comments.  11 Apr. 2012. Web. 15 Feb. 2013.  http://www2.macleans.
ca/2012/04/11/household-debt-and-the-bank-of-canadas-anxiety-levels-in-a-graph/
Beltrame, Julian. “A Year in the Spotlight for Mark Carney.” The Calgary Herald. 2 Jan. 2013.
Web. 11 Feb. 2013. <http://www.calgaryherald.com/business/year+spotlight+Mark +Carney/7764641/story.html>.
Corcoran, Terence. “Spend, Baby, Spend: Policymakers Want Us To Cut Debt, Yet Make It Too
Good Not To Borrow.” Www.ottawacitizen.com.  5 Feb. 2013. Web. 15 Feb. 2013.
<http://www.ottawacitizen.com/business/Spend Baby Spend/7917865/story.html>.

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Debt Reduction: Keeping Smugness at Bay

DH = Dear Husband

Mortgage-free but smug and uninspiring

            I remember about twelve years ago, going to the home of a couple who had recently paid off their mortgage.  They were in their mid-thirties, so it was a rare and impressive thing.  A few people were gathered together for some reason or other, and many of us offered congratulations to our newly mortgage-free hosts.  It wasn’t a status to which I particularly aspired at the time, but I was happy for the pair because they were clearly pleased at having achieved a goal.  Then the husband, avoiding direct eye contact, shrugged his shoulders, raised his hands and said, “If we can do it, anyone can.” He didn’t say it as an encouraging, “You can do it too!”  His message was a judgemental  “There’s no excuse for you if you haven’t paid off your mortgage like we have.”  The good will I’d felt towards them faded to a blank.
            Smugness is such an unfortunate characteristic.  It takes the shine off accomplishment, and it obliterates the possibility of inspiration.  Judgement brings on defensiveness, so the walls go up.  And when we defend our position and keep barriers against outside influence, change is less likely than ever to happen.  I know for myself, with regards to money management, that for many years I felt out of control and overwhelmed by the details.  Financial balance, the necessary starting point for any financial planning, eluded me.  Instead, there was a chaos of numbers and accounts and bills and unexpected expenses.  I was bewildered, and I felt the shame of incompetence.  But judgmental comments from people with money sense only entrenched me in my losing position.   Even purely sensible comments came off as nagging to me – something I’d block out.

Debtors & our resistance

Those of us with bad money management and big debt need to take the walls down if we’re going to change.  We have to open up to outside influence, but we’re not likely to invite arrogant know-it-alls to help us move forward.  DH and I became completely psyched by the possibility of debt freedom after reading Dave Ramsey’s book The Total Money Makeover.  Ramsey doesn’t nag or judge.  He presents a vision and offers a strategy.  Very wisely, he shares his own experience of financial failure.  In his mid-twenties, married and with two small children, he had to file for bankruptcy.  It was a devastating time, but from the ashes of his failure, he grew to enormous success.  And because he is transparent about this failure, I for one had no inclination to get defensive or put up barriers.  I was open to change.

Discovery of my inner-smug

So I have to watch myself now that I’m solidly on the road to debt reduction.  I was recently chatting with a young teacher who was excited about the house he had just bought.  He explained that it was a bit of a stretch because he was single.  And he was paying off student loans.  And he had big payments to make for the expensive car he’d bought two years ago.  I tried to stay pleasant and non-judgemental while everything in me screamed, Why did you take on a mortgage when you’ve already got so much debt?  I allowed myself to ask, “Would you consider selling your car and driving a junker?” but the look of incredulous horror on his face made his answer clear.  People are ready to change when they’re ready to change, and there’s no point in offering unwelcome advice.  I just have to learn how to deal with the new discernment I’ve developed for financial self-entrapment.  I don’t want it to lead me to nagging, judgemental arrogance.  I’ll aim for pleasant grace combined with honest but silent knowing.
            By the time DH and I pay off the mortgage, it won’t be quite so impressive a moment of accomplishment as it was for that younger couple of twelve years ago.  If we play it right though, it might be a moment of inspiration for someone else who sees debt-freedom as an elusive concept.  And to play it right, we’ll have to keep smugness at bay.

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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.)