DH = Dear Husband
DD1 = Dear First Daughter
DD2 = Dear Second Daughter
DFF = Debt-free Friend
Of all ingredients for successful debt-reduction, says Ramsey, “Total, sold-out, focused intensity is possibly the most important. This means saying to yourself (and meaning it), To the exclusion of virtually everything else, I’m getting out of debt!” (Ramsey, p. 119-120) In his book The Total Money Makeover, Ramsey coins the term “gazelle intensity”. Although smaller and slower than the cheetah, nineteen times out of twenty, the gazelle manages to outmaneuver its predator. “Likewise, the way out of debt is to outmaneuver the enemy and run for your life (Ramsey, p. 121). One of the ways to outmaneuver debt is to take on more work. Last summer, for the first time in fifteen years, I taught summer school as part of our debt-reduction efforts. I taught a single credit course half-time through the afternoons of July. This summer, I’m teaching full-time for a double credit course. That means I’m working mornings and afternoons through July and until mid-August.
I turned fifty years old last week. I remember when Oprah turned fifty. “I refuse to be fifty and fat!” she declared, starting out her day with a workout. I can’t say “I refuse to be fifty and indebted,” because I started this journey too late for that to be my reality, but I can say, “I refuse to be fifty and complacent about debt.” So I’m fighting debt through summer school.
But I’d so much rather be camping with my family. As part of my birthday celebration, DH flew DD1 home. He had her phone me from our driveway during my party, and then ring the doorbell in the middle of our conversation. DH took the phone while I got the door, and there she was! It was such a great moment. Big points for DH! We had a wonderful week-end visiting family and going out to the theatre (our first play since our journey out of debt began), and then it was off for a week of camping. Our campground is only an hour away, so I have driven out to it every evening after work and driven home from it early every morning. I’m exhausted.
Someone once challenged my resolve to get out of debt by citing a study. “On their deathbeds, people often say that they wish they had spent more time with their loved ones. They never say that they wish they had worked harder.” I stumbled through an answer at the time, and it still trips me up. I think there are two parts to the response I want to give. First of all, staying out of debt to begin with does not mean working harder; it means managing finances better. The best manager of money I know is DFF, and she hasn’t worked outside the home since her first child was born almost twenty years ago. When crisis hit her – in a way that typically sends stay-at-home moms out of the home and back to work – she was able to keep her house and stay at home because her finances were in such fabulous shape. So she is living proof that being debt-free means you can spend more time with loved ones.
The second part of my answer is this: If you are already in a debt-ridden state and you want to get out of it, it’s true that you will likely work more to achieve that goal. But it’s as a means to an end, and that end is financial security which affords the freedom to spend time doing all the things your memory will cherish in your deathbed hour. I know that when my hour comes, I’ll be cherishing the memory of camping trips with my family more than the reminiscence of extra work I took on for a few summers. But I also believe that this extra work will help set the scene for more of the memories I’ll cherish.
For now, I’m in focused debt-reduction mode, and it does come with its sacrifices. But it’s Friday evening, and soon I’ll be picking up DD2 from work. We’ll head out to the campground, and our whole family will be together for a week-end of camping and a trip to the amusement park we used to visit every year when our three daughters were younger. Since DD1 moved out west over two years ago, these whole-family excursions have been few and far between. So even though we’re in this chapter of gazelle intensity, I’m going to soak in every moment. And I know our week-end will become a memory I’ll cherish.
DH = Dear Husband
DD2 = Dear Second Daughter
“Are you asleep?” I whispered to DH. He opened his eyes. It was just after 4:00 a.m. “I have an idea,” I said – very quietly, in case he wasn’t actually conscious. He produced a sound. “Hmm?” So I felt free to share the idea that had come to me in the last couple of sleepless hours.
Two weeks ago Saturday night, I woke up, looked at the clock, and saw 2:27 a.m. So it was really two weeks ago Sunday morning. It was the day after I had posted “Debt and Credit Cards: Beware of ‘smallenfreuden’”, and my mind, of its own volition was racing around the ad. “DD2 and I were watching a bit of TV,” I’d written, “when a commercial came on that I’d never seen before. I was at once captivated by the quirky charm of the ad with its 1950s-era . . . style, and I was pleasantly bemused by its focus – a word I’d never seen or heard before: smallenfreuden. But when the commercial’s purpose became clear to me . . . I muttered my contempt . . . [It] was all about Visa, and the ‘joy of small’ that comes with using the credit card for ‘small purchases you’d make anyway’. In the days before our journey out of debt, I would have remained somewhat amused by the commercial from start to finish . . . One full year into our debt-reduction, however, I see it as an insidious new agent of the Debt-Matrix.”
I went to the guest room, hoping that a change of scene would bring the sleep I wanted. But it didn’t. And then, the idea came to me. DH had been saying for years that he’d like to create a short video, put it on YouTube, and see what would happen. He has had a fascination for video editing since his childhood, when his family won a movie camera. I’ve seen old footage of the stop-motion animation he produced in his early teens. “Try to think of an idea,” he’d say. “Something about our dog?” I managed at one point. Our dog is really cute, but that didn’t do it for DH.
Now, however, I had a vision: We would put together a video to counter the message given in the “smallenfreuden” commercial. Imitating the cheesy style of the ad, along with its rapid-fire eye candy, we would tell the world that it was smart to use money actually saved up and in-hand when making purchases, and that the best thing to do with credit cards was to cut them. I had ideas for the narration; I had ideas for video and images; I had ideas about which family members, friends, and colleagues might take on which roles. And by 4:00 a.m. I was waking DH to tell him all about it. He liked the idea, semi-conscious as he was, but he wanted to go back to sleep. So I left the room again to grant him his slumber, and went to my computer. By 7:00 a.m. I had a script complete with descriptions of video clips and still images.
Over the past two weeks, we have reworked the script, asked people to be our actors, taped, and taken footage over lunch hours and evenings in different locations. This evening, we captured two scenes and sat down one last time to edit. Our end product is just over 40 seconds long, but we’ve put more hours into it than you would think possible. It’s now after midnight Thursday night – so it’s really Friday morning – and we’ve just put our creation up on YouTube. Check it out if you’re interested, and share it with your friends if you like it. DH and I are pleased to give you cuttenfreuden.
DH = Dear Husband
When I first read The Total Money Makeover, Dave Ramsey’s call to debt-freedom, I flipped through his diatribes against credit cards as if I were an outside observer. DH and I were not in credit card debt. We paid off our balance each month. We earned points. We used them. We were winning in this game, right? “Wrong,” says Ramsey. He then refers to a study of credit card use at McDonald’s which revealed the fact that people spent 47 percent more when using credit cards instead of cash (Ramsey, 42).
Three Reasons Why We Spend More When We Use Credit Cards
1. Ramsey gives the explanation that is most commonly used: “It hurts when you spend cash; therefore you spend less” (Ramsey, 42). The depletion of money in your wallet is a palpable sign that you are spending too much. The credit card in your wallet gives no such evidence of over-spending.
2. “New Study Shows Why We Spend More with Credit Cards” is an article written November 24, 2011 by Lowcards.com for ctwatchdog.com about a study that examined consumer spending. “Consumers paying with a credit card are much more focused on the product benefits, and they make a purchase based on superior benefits instead of the cost . . . Consumers who pay with cash are more likely to choose an option based on cost, even if that option offers inferior benefits.” When we use credit cards, we buy for perceived benefits more than price, and when we use cash, we buy for price more than perceived benefits.
3. Furthermore, according to the same article, “The study says it’s harder to accurately remember the price if you pay with a credit card.” I can identify with that finding. When I pay with cash, I have to count out the cost of my purchases, and I’m therefore more aware of how much I’m spending. When I pay with a credit card, I can escape into La-La-Land and make transactions with little awareness of what I’m spending. Even with a debit card, I’m more aware of cost because I know that the money is coming right out of our account as soon as I use it. With credit cards, there is a false sense of comfort in knowing that the charge won’t take effect until later. Since you’re less likely to remember the price when using a credit card, you’re less likely to track your spending, and with your head in the sand, you’re more likely to get deeper into debt.
What Does Life without Credit Cards Look Like?
If we spend more when we use credit cards, that’s reason enough for me to stop using them. But DH and I use them as such an integral part of our day-to-day functioning. Generally, when we’ve bought clothing for our children or purchased gifts for birthdays, graduations, bridal and baby showers, weddings, anniversaries, and Christmas, we’ve used our credit cards. We pay for health and dental expenses with credit cards and then get the insurance refund before the Visa bill is due. We buy our gas with a speed pass linked to our Visa. We pay some of our bills with credit cards. We do online shopping with credit cards. When DH travels to the U.S. for business, his credit card allows him to make purchases with no inconvenience.
- First of all, when it comes to clothing and gifts, there is nothing to stop us from using cash. According the study mentioned above, we would spend less on these things if we used cash.
- Likewise, there is nothing to stop us from paying upfront for health and dental expenses and then getting the refund later. It’s a practice that would keep us current in our finances.
- Next, although our speed pass at the gas station won’t link directly to our bank account as a debit, it would not be a bad idea for us to pay cash for gas. The speed pass swipe is far too easy, and it leaves me in a state of blissful ignorance regarding how much I’m spending. I won’t spend less on gas using cash, but I will be more aware of how much it’s costing and more likely to track my expenditures.
- Finally, the Visa debit card is as versatile as the Visa credit card. I knew nothing about Visa debit until I did some research this week. As far as I can tell, it can be used for pre-authorized bill payments, for online shopping, and for convenient travel. It is protected. There are no interest rates involved. There is no annual fee.
“When I am doing an appearance and cutting up credit cards,” says Ramsey, “the emotional attachment many people have to the first card they got in college is amazing. They clutch it like an old friend. Brand loyalty is real” (Ramsey, 46). How silly is that? I thought when I first read it. And yet I find myself, now that I am starting to make preparations for credit-card-cutting, feeling a surprising heart pang for Visa. Visa has been with me for longer than DH has. We’ve got history. But it’s time to modify our relationship. Now that I’m aware of the Debt Matrix fabricated by banks and credit card companies, I have to make a break from this codependency. Still, I have to admit that I find consolation in the fact that the Visa debit card exists. It means the break doesn’t have to be complete.
I used to think that there were two types of credit card users: People who stayed in perpetual credit card debt were the ones being duped. People who paid off their monthly balances were the ones gaining from credit card use. And I had us placed in the latter category. But I don’t think so anymore. If my credit card leads me to care less about price, not to track my expenditures, and to spend more, I’m being duped too. DH and I receive so many invitations in the mail to get more credit cards. We get bombarded with promises of highly coveted points to make all of our dreams come true. “Have you ever asked yourself why they work so hard to get you involved? The answer is that you lose and they win” (Ramsey, 41).
DD2 = Dear Second Daughter
DH = Dear Husband
A couple of nights ago, DD2 and I were watching a bit of TV when a commercial came on that I’d never seen before. I was at once captivated by the quirky charm of the ad with its 1950s-era music, film footage, sound quality, and narrative style, and I was pleasantly bemused by its focus – a word I’d never seen or heard before: smallenfreuden. But when the commercial’s purpose became clear to me, I could feel my eyes narrowing into a glare as my mouth tightened. A growl escaped me, and I muttered my contempt, but I kept it brief and quiet because DD2 tells me I talk about debt too often – and I don’t want to be that mom.
The commercial was all about Visa, and the “joy of small” that comes with using the credit card for “small purchases you’d make anyway”. In the days before our journey out of debt, I would have remained somewhat amused by the commercial from start to finish, perhaps rolling my eyes back when the Visa bit became apparent. One full year into our debt-reduction, however, I see it as an insidious new agent of the Debt-Matrix.
We’re following Dave Ramsey’s plan in our efforts to become debt-free, and Ramsey is unequivocally opposed to all things credit card. “As I said, when you play with snakes, you get bitten,” he writes in his book, The Total Money Makeover. “I have heard all the bait put out there to lure the unsuspecting into the pit. A free hat, airline miles, brownie points back, free use of someone else’s money, a discount at the register – the list goes on to get you to sign up for a credit card. Have you ever asked yourself why they work so hard to get you involved? The answer is that you lose and they win” (Ramsey, 41). Nevertheless, DH and I still use our Visa.
Our debts have been in the form of lines of credit. Credit card debt has not been an issue for us. With very few exceptions, we have always paid off our credit cards in full. And while Ramsey points out that “according to MSNBC.com, 90 percent of the airline miles are never redeemed” (Ramsey, 41), we eagerly use up every single one of ours. Furthermore, the credit card points that we rack up at the gas pump earn us a restaurant meal every two years. When I recently raised the possibility of getting rid of our credit cards, DH pointed out these things, and without directly stating it, essentially said that we were avoiding the pitfalls of being duped and that we were actually gaining from our credit card use. “Wrong again,” says Ramsey. “A study of credit card use at McDonald’s found that people spent 47 percent more when using credit cards instead of cash. It hurts when you spend cash; therefore you spend less” (Ramsey, 42).
Is it possible that if we took a pair of scissors to our credit cards, we’d ultimately spend significantly less? That we’d actually save in real cash far more than we could ever earn in terms of air-mile points or restaurant points? We’ve been living pretty frugally over the last year, so on the one hand it’s hard to believe that we could do better. On the other hand, we would never have believed that we could increase our debt-repayment by over 300% from one year to the next, and yet in the first year of our journey out of debt, we have. (See last week’s post, “First Anniversary of Debt-Reduction: $50,000 Down!”) We use our credit cards for relatively few and very fixed purchases, but I’m inclined to believe that we really would spend less if we got rid of them altogether. DH doesn’t feel as I do at this point, but he’s giving the idea some thought.
There has been some negative commentary on the whole “smallenfreuden” initiative. The Urban Dictionary has two entries for the word. The first one posted, obviously by a Visa-friendly individual, defines it as “An English/German loanword that literally means ‘the joy of small.’ ” The entry later posted, evidently by an individual with some reservations about Visa’s motives, defines it as, “The joy of falling into debt in small increments.” As for me, I’m just itching for a pair of scissors.
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.)
DH = Dear Husband
A year ago, DH and I started our journey out of debt. With three lines of credit and one mortgage totaling over $257,000, it was no small deal. DH’s hi-tech job loss and eventual franchise purchase in the first decade of the millennium had added greatly to our already impressive debt, and last year, aged 53 and 49, a sobering reality was dawning upon us: We would almost certainly be retiring within ten years, but we weren’t anywhere close to being prepared for it. A recent and prolonged experience of financial stress combined with impending retirement made us feel uncomfortable with our debts as we never had before.
Last March, a friend of mine who knew of our struggles loaned us her CD-version of Dave Ramsey’s book The Total Money Makeover. Last May, I reluctantly started to listen to it on my commute to work. Somehow, that CD worked its way through the quagmire of denial and chaos that was my financial mind and made me weep. “I was surprised by my tears,” I wrote in my first post last May. “Debt repayment, after all, is dull. It’s all about practicality and numbers and detail and doing without and being sensible. But here was Ramsey presenting it as something life-giving. I allowed myself a vision on that car ride to work. In my mind, I fast-forwarded to the day my husband and I would make our last mortgage payment, and we’d be completely debt-free. It was glorious! I’ve known for years that our debt load has been a burden, but I didn’t realize how life-sucking that burden was until I envisioned it gone.”
We are part of a debt-ridden generation. My mother, a product of the Great Depression, was horrified into utter speechlessness when she found out the sum of our debts. A slightly younger colleague of mine, on the other hand, wondered what the big deal was. Ramsey has a theory for our generation’s growing comfort with debt. “The story goes that if you drop a frog into boiling water, he will sense the pain and immediately jump out. However, if you put a frog in room-temperature water . . . and . . . gradually turn the water up to boiling, the frog will not sense the change. The frog is lured to his death by gradual change” (Ramsey, 13). Last June, DH and I decided to jump.
We have three children. One is grown and living on her own, and two are in their teens and living at home. So we’re paying off debt while managing expenses typical of family life: groceries; property taxes; home and auto insurance; utility bills; gas for the car; costs related to our younger daughters’ sports and other activities . . . These are hefty obligations in their own right, and to pay off debt as well is challenging. From June 2011-June 2012, we paid close to $16,000 off our debt. From June 2012-June 2013, we paid $50,000 – a number that represents a jaw-dropping percentage of our combined take-home pay. Despite the fact there were no significant changes in our income or expenses, we had a 312% increase in our debt-repayment from one year to the next, and while I don’t completely understand it, I can share some lessons I’ve learned so far on the road to debt-freedom.
Lesson #1: Be fiercely intentional.
“You can wander into debt, but you can’t wander out of it,” says Ramsey. I don’t think that an easy-going approach to debt reduction is possible. In the April 21, 2011 issue of Statistics Canada’s Social Trends Magazine, Matt Hurst shows that Canadians’ average debt-to-income ratio has increased by 70% since 1990. The “flow” of our culture is towards more and more debt, so if you if you want freedom from debt, don’t “go with the flow”; go with focused intention.
Lesson #2: Sweat the small stuff.
There is a popular saying that goes something like this: “Don’t sweat the small stuff – and it’s all small stuff.” I really don’t like that saying. It pretends to be an antidote to worry, but it’s not. The management of personal finances requires attention to detail. For years – even decades – I had my head in the sand when it came to money matters, but since we started our journey out of debt, I have joined DH in tracking our finances, creating monthly budgets, preparing for big upcoming expenses, and deciding where to cut back. When we’ve let the details slip, we’ve been less successful in our efforts to reduce debt. We’re committed to sweating the small stuff so that we don’t need to worry.
Lesson #3: Be prepared to do some soul-searching.
In her book Payback: Debt and the Shadow Side of Wealth, Margaret Atwood examines debt. “ ‘Debt is the new fat,’ someone said recently. Which led me to reflect that, not so long ago, fat was the new cigarette-smoking, and before that, cigarette-smoking was the new alcohol-drinking, and before that, alcohol-drinking was the new whoremongering” (Atwood, 41). We’re a species bent on destructive self-medication in one form or another. As you face down your indebtedness, you’ll be shoved face-to-face with powerful opposing forces from within. Do you struggle with the need to keep up with the Joneses? Are you invested in an image of affluence or generosity? Is it hard for you to say “No” to expensive social or family traditions? Are meals out or shopping sprees a vital source of comfort? Do you have money guilt? To soldier through your forces of inner-sabotage, be prepared to undergo some discomfort and some deep-seated paradigm shifts.
Lesson #4: Master the discipline of measured spending.
I remember a local story about a group of men who worked together winning the lottery. Each received about $400,000, and as far as I know, the first thing that every one of them did was to pay off his mortgage. I’m pretty sure that if I won $400,000, I would immediately eliminate our debt. But I’m not counting on a lottery win. The practice of measured spending and gradual repayment is difficult to acquire in this all-or-nothing age of instant gratification, but it is possible.
Lesson #5: Let go and let God.
This advice seems to fly in the face of lessons #1 and #2, but it doesn’t. Sometimes, even when you’re focused and taking care of all the details, events beyond your control stop your progress. It’s easy to get very discouraged at such times, but it’s important not to. Ramsey says it takes the average household seven years to get out of debt. It’s a long road, and there will be both ups and downs along the way. Find the grace to weather the journey.
DH and I are encouraged by our first year. 60% of Canadians retire in debt, but we’re hoping to beat the odds. There are no guarantees, and I’m sure there are many more lessons to learn, but we’re on our way.
DH = Dear Husband
DD1 = Dear First Daughter
DD1 = Dear First Daughter
Sometimes I think, If we took our discretionary money and put it against our debt, we’d make faster progress on our journey to debt-freedom. But it’s a thought that doesn’t stick, and that’s a good thing.
Just to recap, DH and I have individual and joint discretionary money:
Ø Individual: We give ourselves each $600 per month for things like charitable donations, gifts, clothing, entertainment, restaurant meals and snacks – not to mention items like tooth paste, shampoo, and shaving cream.
Ø Joint: We used to hire house cleaners to the tune of $100 every two weeks, but now we do our own cleaning, and the money is set aside in its own account. We use it for larger household purchases that represent wants rather than needs. In April, for instance, we bought a flat-screen TV with money saved in this account.
There are two reasons why I think discretionary spending allowance is important – even while getting out of debt:
1. If you don’t give yourself any permission to treat yourself, you’re at greater risk of burning out and giving up altogether.
2. Discretionary spending provides training for life after debt. While it is a perk, it’s one that fosters delayed gratification – waiting while saving; it encourages thoughtful purchase – taking a look at what’s out there and at what the best deals are; it provides practice in measured spending.
DH and I Compared
From the start, DH has been much better at managing his discretionary fund than I have been at managing mine. He has been able to save for relatively big ticket items – like paying for his annual gym membership outright – while still maintaining a healthy balance at the end of every month. Furthermore, DH got in the habit of putting aside all of his change a few months before we started our journey out of debt. For over a year now, he has dropped his coins into a jar, and as it has filled up, he has considered what he would do with it – a week-end of snowboarding generally coming out on top.
I, on the other hand, have had a hard time keeping my discretionary fund above $0 – let alone saving anything. In my last post, I identified my biggest weakness in managing money: I buy snacks and meals too often. My discretionary fund has suffered from a chronic leak of $1.50 here and $10.95 there. Nothing exorbitant or even unreasonable in itself, but over time, draining. So it is no surprise that my discretionary fund generally comes out at around $0 by the end of each month. It’s better than less-than-zero (which it always used to be), but it exposes a real deficit in my practice of the thoughtful, measured spending mentioned above. So DH and I are living proof that two people with the same income and the same expenses can end up in radically different financial situations.
Last week, I drew a line in the sand. In the name of taking a trip out west to visit DD1 this August as long planned, I stated (in bold no less), “not another penny will I spend on treats or meals out until I have saved enough money from my discretionary fund to purchase a plane ticket.”
This past Monday evening, DH asked me to come and see something. He showed me his coin jar. It was empty. Then he showed me an envelope filled with bills and some change – amounting to just under $600. “What are you going to do with it?” I asked. He handed me the envelope. “You can use it for whatever you want,” he said, “but I thought it would help for your trip out west.” My eyes well up just writing it.
I’m too touched by his generosity not to be inspired by it. I will not allow this incredibly sweet and sacrificial gesture to go to waste. In the name of learning to manage money wisely, I’m inclined to steer clear of the “not another penny will I spend” route and truly to master that thoughtful, measured spending which has always eluded me. After DH handed me his envelope, I did have enough money in my discretionary fund to buy a plane ticket, and was therefore free of the vow I had made only a few days before. “Discretion”, according to mydictionary.com, is “the trait of judging wisely and objectively.” Measured spending shows much wiser judgement than knee-jerk “not another penny will I spend.” So on Wednesday evening, I practiced discretion and took DH out for a treat at Tim Hortons. It was all on me.
DH = Dear Husband
DD3 = Dear Third Daughter
DD1 = Dear First Daughter
I’ve recently entered the world of Twitter. In October, I decided to get a Twitter account after the morning host of a local radio station interviewed me and advised me to do so. In February, a Twitter advocate among my colleagues sat me down and helped me to set up an account. In May, I actually started to use it. It took seven months from decision to execution, but Prudebtfree is now in the Twittersphere.
Debt-Warriors on Twitter
Twitter was an overwhelming place at first, but I’ve narrowed my focus to people and organizations committed to debt reduction, and it’s become a source of motivation. I find myself humbled by what other debt-warriors are sacrificing in their respective efforts. When you’re getting out of debt, you come to realize that there is always something more you can do, and while this can be a deflating truth, it can also, if specifically targeted, help each one of us to move forward. Many of my fellow Twitter debtors are in their twenties or thirties, and I cheer them on. It’s so wise to start young! But whatever the age, whatever the size of debt, and whatever the income level of the debtor, there are common threads that run among all of us:
Ø Most of us have a history of bad money management.
Ø Most of us have had a wake-up call – typically in the form of a loss of income.
Ø Most of us are following some kind of program to get out of debt.
Ø Each of us has particular points of weakness in taking on the giant.
I’ve pinpointed mine, and it is now my target. Food. I LOVE food. I especially love food that has been prepared by someone in a restaurant. Food that I don’t normally eat at home. Muffins so warm, butter melts upon contact. Asian vegetables cooked to a baffling crispy perfection. Indian naan bread soaking up the sauce from buttered chicken . . . My love affair with food is long standing and intense.
Discretionary Money Challenge
DH and I decided several months before we launched on our journey out of debt that we would each have $600 per month for discretionary spending. (See post “Discretionary Money: His and Hers”.) It goes towards gifts and charitable donations; towards purchases that one of us wants to make, but not the other; towards movies, treats, and meals out. All of the above is OK.
Here is what is not OK: I too often buy snacks and meals on my own. When I’m rushed in the morning and don’t make breakfast; when a snack craving hits me mid-afternoon; during my wait while DD3 trains for her sport in the evening. And it all adds up. I told DD1 in the fall that I would fly out west to see her this August. She’s been living far from home, studying and working for over two years now, and I haven’t yet visited her. With so much lead time, you’d think I’d have saved a good amount for the trip by this point. But I haven’t. The leakage towards treats and meals is sabotaging my plan. So here’s my commitment: not another penny will I spend on treats or meals out until I have saved enough money from my discretionary fund to purchase a plane ticket.
I’m slow to adopt new technology and social networking. But I’m glad I’m on Twitter. Reading the experience and advice of other debt-warriors has helped me to determine where I need to focus in my own fight against debt. And I know what I need to do. Prudebtfree is ready for battle.
DH = Dear Husband
I haven’t been sleeping well lately. And the life-giving bursts of spring all around me haven’t been giving me much life. Thoughts of muffins, egg rolls, and melted cheese have beckoned to me from some deep recess of my brain, promising to be the answer. Except for when the knot in my stomach has stifled my appetite. I could recognize the symptoms, but why? I regret to say that despite my efforts to have perspective, I became deeply worried about the slow-down in DH’s business.
In March, we could make no payment against our debt. In April, the same. There are logical reasons for this: We had a big property tax bill in March, and our finances had become such a mess that we had nothing left over to put against the debt. In both March and April, we had higher than average expenses. In both March and April, DH’s business was slow. Remarkably slow. After months of hyperactivity, the slow-down was at first a relief. By the end of the first slow month, relief gave way to philosophy: There are ups and downs in self-employment. This won’t last. After the second slow month, philosophy gave way to dread.
Our journey out of debt was launched in part due to our six years of financial stress after DH lost his career in the colossal hi-tech bust early in the millennium. I can’t adequately express the bleakness of those years, but I can tell you that I felt it more than DH did. According to Deborah Thorne’s research, as presented in Katherine Porter’s book Broke: How Debt Bankrupts the Middle Class, “. . . the distress associated with severe indebtedness is gendered, with wives disproportionately reporting stress, insomnia, and depression” (Porter, p. 141). Thorne includes in her research the anecdote of a woman she calls Traci who faced bankruptcy along with her husband. “As they edged toward bankruptcy, the stress of unmanageable debts, collections calls, threats of wage garnishment, and the possibility of losing their home in foreclosure became virtually unbearable to Traci. Her feelings of despair over their financial situation left her wishing for death: ‘When I went in for surgery, I prayed to God that I didn’t wake up . . . I wanted to have an easy suicide . . . I didn’t want to live” (Porter, p. 136). I hope and believe that the extremity of Traci’s experience is rare, but there is a continuum of dread, despair, and depression that allows most of us to empathize with her.
Dave Ramsey notes the same gendered difference in response to financial stress in his book, The Total Money Makeover. “Somewhere down inside the typical lady is a ‘security gland’, and when financial stress enters the scene, that gland will spasm” (Ramsey, p. 144). My ‘security gland’ was in a spasmodic state for the better part of six years, so there is a trigger effect now, even though logic and perspective don’t justify it. Ramsey and his wife Sharon experienced bankruptcy in their twenties, and even though they have since become very wealthy, the impact of that stress is still present for her. “Her emotions can revisit the fear of looking at a brand-new baby and a toddler and not knowing how we were going to keep the heat on. That is a sensitive place in her psyche . . .” (Ramsey, p. 144).
Letting Go of Expectations
So what to do? Look on the bright side? Rustle up some positive energy? Not quite. But I have embraced a lower-key piece of wisdom that has recently come to me from three different sources: church, Oprah, and a book on health. When that happens, I pay attention. This must be meant for me, I think. (I’ve added the italics below for emphasis.)
Church Along with the congregation, I have sung these words to a hymn: “All of my ambitions, hopes, and plans / I surrender these into Your hands.”
Oprah I took notes when she visited our city. “Prepare yourself,” I scrawled. “Do all you can, and then release it. Have no attachment to what the outcome might be.”
Health Book Dr. Ben Lerner, in his book Body by God, says, “The really tough nights are when I allow my mind to race around worrying about not getting what I want . . . It is only after making the decision to let all my wants go that I finally get some rest. Nothing can be taken from me when I want nothing” (Lerner, p. 38).
It’s a tough balance to strike, but I get it. Give it your level best and hope, and at the same time, free yourself of any expectation. For me, it means that I can feel confident that we’re doing the right thing. We’re putting our efforts towards getting out of debt; we’re back on track with our monthly budgets; we’re communicating well; DH is working as hard as ever on his business. At the same time, I can feel peace when things that are beyond our control prevent us from reaching our goals – at least for the short term. Like unexpected big expenses. Or a few months of slow business. And longer term? If I answer the “What if?” questions, I come up with, “We’ll stop the business. We’ll sell the house and move into a smaller one. DH will look for another job. I won’t retire as soon as I’d planned.” Disappointing, but not the end of the world.
While women can have a tough emotional time with debt, the stereotype for men is that they are more tied up in the ups and downs of work. So there’s a double whammy for our household. “I’m here through thick and thin. ‘For richer and for poorer . . .’” I said to DH yesterday morning, putting my hands on his shoulders as I saw the strain of worry working on him. “It’s looking thin and poorer,” he said. “Well, at least it’s thin,” I smiled, patting his flattened abs. He’s had time for health and fitness lately. I believe that for both men and women, the concept of effort followed by surrender is the antidote to the sink hole of depression, whether debt or work is beyond our control. I don’t know if it is for sure, but I do know that I’ve shifted in my attitude as I’ve adopted this wisdom. And I do know that last night, I slept like a baby.
DH = Dear Husband
The grass is greener . . .
One sure sign of spring in these parts is the sight of neighbours let loose upon their lawns. A peek out the front window early on a week-end morning is sure to offer up at least a few industrious home-owners working away at the grass and gardens. For years I have observed with some perplexity the incredible amounts of time that many of them devote to this pursuit. What could they be doing for so long? I have often wondered. DH and I do not have particularly green thumbs, and over the last few years, with the start of his business, our poor yard has been neglected. The result is quite marked by this point. Most of our neighbours’ properties are covered with lush green grass and are attractively enhanced by shrubs, decorative rocks, and flower gardens. Our lawn, on the other hand, is equal parts weeds, grass, and bald spots. And our flower garden in the last couple of years has been overgrown with things I swear I never planted. “When you pay off your house and burn the mortgage, take off your shoes and walk through the backyard,” advises Dave Ramsey, (our debt-reduction guru), “The grass feels different under your feet.” With our yard as it is now, I’m pretty sure that even in a state of complete debt-freedom, we’d want to keep our shoes on.
Our neighbour to the right has award-winning gardens, a distinction facilitated by the team of lawn-care specialists who regularly come to work their magic on her property. We have some comfort in our neighbour to the left. Last week-end, as I was raking our pitiful grass, he came out to commiserate with me. Still quite new to Canada, he is unfamiliar with our spring-time lawn rituals. “What does everyone do to get their grass to look so good?” he asked me. I told him that if I knew, our lawn wouldn’t look the way it did. He shook his head in despair, saying, “We’ve got the ugliest yard on the street.” I assured him that we were giving him stiff competition. He told me that when he lived in the United States, everyone on his street hired a lawn care company. Were we thinking of hiring one? I told him we were. “Let me know what you decide. We’d like to hire someone too,” he said.
What to do?
Having surveyed the damage over the previous couple of weeks, DH and I felt it was time to do something major to improve our yard. In part, we reasoned that if our lawn kept getting worse, we would ultimately have to pay thousands to get it resodded. That wasn’t all though. I have to admit that there was also a more petty consideration at work. Our lawn was embarrassing – the kind neighbours talk about in hushed tones. DH got quotes from two different companies, each offering various services at prices ranging from several hundred to over a thousand dollars. We were pretty certain we would hire one of them, but we’ve sat with it for a while, and we’re not going to do it. We’ll settle for damage control – raking, weeding, and fertilizing to the best of our modest ability – and hope for the best.
“Don’t even consider keeping up with the Joneses,” Dave Ramsey writes in his book, The Total Money Makeover. “THEY’RE BROKE!” (Ramsey, p. 83) He might be right, but I don’t see it. I don’t believe that our neighbours are as indebted as we are. They’re so cheerful and purposeful. And they have such nice lawns. It’s possible that I’m fooled by appearances, but whether they’re “broke” or not, we’re with Ramsey: In our decision-making, keeping up with the Joneses will not be a determining factor.
Our neighbours to the left will have to hire lawn-care specialists on their own, and we will be unchallenged in our “ugliest yard” status. But I’ve noticed something since last week-end. Our lawn is looking better. Those hours of raking have made a difference. There is more green – less bald dirt. Sure, much of the green is made up of weeds, but we’ll work at it. And I’ll seek advice from our diligent neighbours across the street who spend inconceivable amounts of time on their yard. We can learn from the Joneses while refusing to keep up with them. And when the time comes, when we’ve burned the mortgage and have entered a state of complete debt-freedom, we’ll walk through the backyard – with our shoes off.
DH = Dear Husband
It’s Saturday morning, and the sun is shining in a clear blue sky. Spring is here. Hallelujah! We’ve had some teasers over the past couple of months. A rogue warm day. The promising appearance of birds (including, right on our lawn, to our utter shock, two huge wild turkeys). The seemingly final melting of snow. But then another temperature drop would be followed by another snow storm. We’ve got the real deal in spades now, and it’s very, very welcome.
As soon as the weather is warm enough, I’ll clean the inside of my car, I decided over a month ago. The rubber pads and carpet of the Ford’s floor were covered in layers of dirt, pebbles, and street salt. Crumbs from a variety of my daughters’ snacks were generously scattered across its seats. Dust blanketed the dashboard. A long winter had meant a long time between cleanings, but last week-end, I dealt with it all: rubber mats sprayed down with the hose; carpets and seats vacuumed; dashboard wiped with a damp cloth. Mission accomplished? Partially. The next day, the floor and seats looked fresh, but the dashboard looked worse. So many layers of dust had settled upon it that my attempt at wet-rag-wiping merely added moisture to the filth, creating dust-mud – which had dried and hardened over into a formidable grime.
Deep-cleaning our finances
When things are a real mess, deep cleaning is required. A token wipe didn’t do it for my dashboard last week-end, but a scrub brush, sudsy water, and elbow grease should do the trick today. Early in March, DH and I realized that our finances were in a real mess when we didn’t have the money we thought we’d set aside to pay our property tax bill. “We’ve been too busy since the Christmas rush with DH’s business,” I wrote at the time (See post “Debtors Anonymous (& Our Property Tax)”). “Like the proverbial juggler with too many balls up in the air, we’ve been dropping them . . . and our money is in a sloppy state . . . We’ve 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.” We paid the tax bill, but it meant we had nothing to put against our debt in March.
The thing is, it wasn’t enough for us simply to realize that our finances were in a mess. We neglected the deep cleaning required, and at the end of April, we were once again surprised by our money situation. “We’re over three thousand dollars out of balance,” DH said incredulously after we had carefully entered all remaining receipts from the previous week. Last Saturday afternoon and evening, it was all about straightening out our financial house. Besides doing our income tax, we went through our income and expenditures for April in painstaking detail. Our detective work brought us back a few months more, and it took some serious time, but we did it. We found the roots of the problem, and our account is in balance once again. For the second month in a row, we had nothing to put against our debt, but the deep cleaning has been done, all is in order and accounted for, and we’re looking ahead.
Things look favourable for May. I receive three paycheques (as opposed to two) two months every year, and May is one of them. We have surprisingly large income tax refunds coming our way. I was slow in submitting substantial claims to my insurance, but I’ve done it, and a hefty reimbursement should be forthcoming. Our street holds an annual garage sale each May, and this year, I plan to take part. DH’s business, which was off-the-chart slow in April (after months of being off-the-chart busy) is already proving to be picking up in these first few days of May. There will be significant expenses this month, but I’m confident that we’ll have a healthy amount to put against our debt by the end of May. Just as I’m confident that my dashboard will be pristine by the end of today.