Debt Reduction & Keeping up with the Joneses?

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.
 

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

Debt Reduction And Deep Cleaning

DH = Dear Husband
 

 Spring!

            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.

Spring car-cleaning

            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.
 
 

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Inspiration While Climbing Out Of Debt

DH = Dear Husband
 
               It’s been a week of inspiration.
Monday evening, I had the privilege of joining ten students and some staff from our school in a viewing of Girl Rising.  The film features nine girls from nine different parts of the world who struggle against staggering odds to get an education.  As stated on the website, “Girl Rising showcases the strength of the human spirit and the power of education to change the world.” It is beautiful visually, and although its subject matter is often so bleak, we all left the event warm with hope.  I had the chance to talk at length with one of our students whose experience shed light upon the fact that girls face obstacles to education not only in faraway places, but at home too.  “Miss, I want to do something,” said another student, trying her best to express the spark that had been lit in her.  Me too.
               Wednesday evening, I joined a small group of teachers and other supporters of schools in our board for a dinner with Eva Olsson, speaker and holocaust survivor.  In her early seventies, after decades of keeping silent on the topic of Nazi atrocities, Eva was confronted by the questions of her earnest and beloved young grandson.  She broke through her silence and opened up.  Today, over ten years later, she continues to answer the questions of students, school staff, and community members as she shares the nightmare of her experience and urges us not to be passive bystanders in the face of injustice, but to stand up to bullies.  And her choice to forgive is nothing less than monumental, her abundant life its most poignant testimony.  “I hope I will see you again before I get old,” she joked with me over dinner.  Dr. Olsson is eighty-eight years old.  “I’ll be back in November.”
               Friday afternoon, we hosted Ivan Coyote, writer and storyteller, in our school library.  It was decidedly ground-breaking, and although I eagerly looked forward to the presentation, I have to admit I was out of my comfort zone.  I adopted the role of organizer-skittering-about-the-sidelines, making sure there were enough chairs; dealing with the noise coming from an adjoining office; leading the charge to put tables and chairs back in place afterwards.  I can’t get my head around certain gender issues, but perhaps the point is that I don’t need to.  Ivan is a great storyteller, and her words drew me in along with everyone else.  Funny childhood mishaps; the oppressive anxiety brought on by high school mean-girls; devastating consequences of school bullying . . .  There are no boundaries to these human experiences.  The imperative of kindness is what lingered, along with many students who chose to stay in the space after the bell had rung and our guest had left.  They do that when something great has happened.
               It’s been the kind of week that leaves me wondering about life purpose – mine in particular.  My journey out of debt has me focused upon things that are far from inspiring:  We’re sticking to our grocery budget. High-five for us.   I still haven’t submitted that receipt for my orthotics.  Got to get on that.  DH’s business has been slower this month.  April might end up being another dry month for debt repayment, but the good news is that he has time to do his share of the house cleaning these days.  I’d rather be out there confronting bullies, fighting injustice, and opening up the doors of opportunity for the underprivileged.  And of course I have some margin of power to do all of the above already.  I have to acknowledge though, the limitations that debt imposes upon my ability to give to and to devote time and energy to causes resonating with worthy purpose.  It’s frustrating.  And it’s mortifying to acknowledge that I am the root cause of these limitations.
Oh well.  What did Oprah say again?  “Do the next right thing.”  Climb out of the hole.  Step up to the next foothold.  Reach for that ledge just a little higher up.  This is the mundane work that over time creates a better picture.  It’s the effort required to build a strong platform from which to launch into new purpose.

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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.)

Making Purchases While Getting out of Debt

DH = Dear Husband
DD2 = Dear Second Daughter
 

 The itch to buy

               Seven months ago, DH and I started to feel the itch to buy, buy, buy.  It was a familiar sensation – one we had historically resolved by discussion, argument, doubt, buying on credit, worry, stress, and resentment.  If you read my post “Mickey Mouse and His Broom:  Debt Illustrated in Fantasia”, you can see the list of items and services that tempted us, at that time, to reach for our credit cards:  “I’m noticing stains on our carpet.  The piano is out of tune, and its bench is cracked.  The furniture in our family room is visibly worn.  DH keeps talking about getting a sectional sofa and a flat screen TV.  My wardrobe is in dire need of sprucing up.  Today DD2 said to me, quite sweetly, as we got ready to walk the dog ‘I want to sign you up for What Not to Wear.’”
DH and I knew we could not respond to these wants as we had in the past.   We had read The Total Money Makeover, and we were committed to our journey out of debt.  Dave Ramsey establishes a humbling truth near the beginning of his book:  To find the cause of your failures with money, look in the mirror.  “You are the problem with your money . . .  The Total Money Makeover plan . . . works because it gets to the heart of your money problems:  you” (Ramsey, 4).  So what did DH and I see when we looked at the couple in the mirror?

 The couple in the mirror  

The woman had never developed any financial maturity.  Dismissive of the laws of addition and subtraction, she had only a vague notion of how much she earned, but kept no track of it.  She kept no track of what she spent either.  Aware that something was amiss with her financial management, she would sometimes go on a spending fast and buy remarkably little – but that only lasted until she binged and bought when and what she wanted.  With no measured discipline, she fluctuated between fasting and binging.  The baby of the family in which she’d been raised, she had learned in adolescence that raising a fuss brought results when it came to money matters.  She was stuck in financial adolescence.
The man seemed to be so much more mature.  His eyebrows were dark and heavy as he managed the money.  He knew pay schedules, and he kept track of expenditures.  He could specify where the accounts stood.  And he worried.  The baby of his family, he had grown up with a dad who was always worried about household finances.  That’s what dads did.  So while he kept track, he did his part to ensure the maintenance of our anxiety.  Every once in a while he’d suggest a big expenditure to his wife, much to her surprise, given his general complaint about household finances.  A week-end get-away perhaps, or a piece of furniture.  He would offer a compelling rationalization that should have raised red flags in her mind.  But money talk went over her head, and she had a strong aversion to mucking about in the details of finances anyway.  She, who was not inclined to deny herself anything, was not inclined to deny her husband either.  So with her blessing, he’d carefully purchase what they couldn’t afford, and successfully maintain the state of worry necessary to the position of dad.

Our plan of action

With a steady eye on the couple in the mirror, we have made decisions about each item on our wish list over the past seven months:
        We paid to have the carpets professionally cleaned in October, with money budgeted to household expenses.
        I bought $200 worth of clothing in October, with money from my discretionary fund (see post “Shopping While Getting out of Debt”).
        We had the piano tuned in November, with money budgeted to household expenses.
        I have talked with the wood work teacher at my school, and he has agreed to look at our cracked piano bench to see if it would be suitable as a project for a student.
        In October, we started to put aside the money we were no longer spending on cleaners.  Every two weeks, $100 has been going into a mutual discretionary fund for items that are “wants” as opposed to “needs”.
        On Friday of this past week, we bought a flat-screen TV with money from that fund.
        $200 remains in the fund, and it is going to go towards new flooring in the family room – in several months.
        The sectional sofa will have to wait.
We’ve enjoyed the flat-screen TV this week-end.  Four episodes of Mad Men, season five, with a sharpness of colour and clarity that is, for now, amazing.  But I think I’m even more pleased with the fact that we did it:  We wanted.  We planned.  We saved.  We waited.  We purchased – without going into more debt.  We are starting to see something different in the mirror.  This man and this woman, who have been at the heart of our financial problems, have shown concrete evidence of improvement.  “Are you ready to take on the guy or gal in your mirror?” Ramsey asks.  “If you are, you are ready to win” (Ramsey, 3).  I feel something of the shyness I typically feel upon meeting new people.  I don’t quite dare to believe what I see in the mirror.

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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.)

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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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.)

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.
 

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.)

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.
           

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.)

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.”
           

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.)

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.” 
           

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.)