Thought for the Day:
“You must gain control over your money, or the lack of it will forever control you.”
Dave Ramsey
Question for the Day:
Do you have control over your finances?
Okay, so I’ve decided to just gloss over the fact that I haven’t posted anything for over a month because the only explanation I have is that I was burnt out. When you work as hard as I do, especially as a mental health professional, sometimes a shutdown is necessary. However, I’ll save those details for a future post. Nevertheless, I’m back and I’m picking up where I left off, which is at Part 3 of my practical money management series, “The Coin Collection.” For those who might recall, I started this four part series to be of support to people like me who may be intelligent and competent in many areas, but have special needs when it comes to managing money. I’ve told you all about how my toxic relationship with debt began and how mutually abusive it eventually became. Like all unhealthy relationships, it took a piece of me that I thought I’d never recover. Before we go any further, feel free to follow the links to catch up on anything you missed.
The Coin Collection (Part 1) See, What Had Happened Was….
The Coin Collection (Part 2): Let Me Hold a Little Somethin’….
Now, despite me being a former queen of maxed out Visas and a surviving payday loan hell refugee, I sit here today largely out of debt with prime credit, savings, and a beautiful new home. It wasn’t because I won the lottery, received an inheritance, or had a financial advisor who gave me a hot tip on an lucrative investment. It was simply because I finally learned, with the help of Chapter 13 bankruptcy limitations, how to live without the safety net of credit. As long as there were credit cards and loans willing to enable me whenever I spent beyond my means, I might have never realized the full extent of my borrowing addiction and would likely still be somewhere trying to make a minimum payment.
For those unfamiliar with Chapter 13 bankruptcy, it’s when the government basically feels you make too much money to file for a Chapter 7, which would be a total and instant elimination of all current debts. Your credit will suck for awhile, but at least the collection calls will cease and the relief is immediate. But a Chapter 13 means that the government has decided that though you may be bad at money management, you still make enough money to pay your bills. The bankruptcy court basically responds to your cries of “I’m broke” like cousin Pookie does when he’s denied that $20 he asked you for. “Come on cuz, I know you got it!”
With a Chapter 13, what they do is freeze or eliminate your interest rates, put a pause on federal debts that can’t be discharged such as student loans, and put you on a strict payment plan. You pay the court directly, and they’ll pay your creditors on your behalf. It’s like one of those credit consolidation agreements only you had better be on time with the payments because being late will land you in court. There’s nothing fun about being on the receiving end of a nasty phone call, but ain’t no hanging up on the judge.
For me and my husband, our plan lasted five years and the payment was as high as a giraffe singing soprano, but we managed. When you’re on a Chapter 13 plan, you are not allowed to have, use, or apply for any new credit. You also cannot purchase anything new that would require credit, and you cannot, I repeat, CANNOT miss a payment. So what this meant for us is that we had to learn how to budget, save, and live within the boundaries of our paychecks. We still had children to raise complete with birthdays, extra curricular activities, Christmases, college savings, haircuts, school shopping, and, of course, relentless begging. We still had emergencies that came up, especially with having two old cars that we couldn’t just replace at the dealership without first throwing ourselves on the mercy of the court. We still wanted to take our yearly family vacations, still had family to help, still had groceries, gas, rent, utilities etc. which meant that what we earned HAD to be saved and spent wisely. There was no room to spend frivolously and “treating myself” went from massages and pedicures to splurging on a full tank of gas.
Had we not decided to exercise discipline during those five years in terms of budgeting, saving, and working consistently, we could have easily found ourselves without the necessities. So basically, though we weren’t ready for it initially, the government put us on a diet. We were forced to give up all the guilty pleasures that came with a high debt diet, and were put on a much more suitable regime of bacon, nest eggs, and extra cheddar. Though not the most conventional of diets, I highly recommend it to all of you because the results are fabulous!
Bacon
Most old heads remember that 1980s commercial for Enjoli Perfume where the blonde Farrah Fawcett look alike sang about the multiple roles of working women. “I can bring home the bacon, fry it up in a pan, and never, ever let you forget you’re a man.” (Flag on the play! If bae forgets he’s a man, then he might have dementia or some other identity issue, but they didn’t have any business adding that to the list of womanly responsibilities. ijs) But I digress, that commercial solidified the term “bring home the bacon” in pop culture as being synonymous with working to support one’s family. Bottom line is, when it comes to managing debt, there is no way around getting your behind up and going to work everyday. Money management can’t exist without a reliable and consistent source of income that guarantees you’ll bring home at least the cost of all of your monthly payments, rent, and utilities PLUS at least 20% extra for savings and paying down debt. So, if you find that you can only cover the minimum payment on credit cards, constantly need to take out loans to cover basic expenses, are always making payment arrangements on utilities, and paying late fees every month on your rent, you’re simply not making enough money. For many, this is no fault of their own as systematic racism and unequal access to education have put many at an honest disadvantage that is hard to overcome. Yet for others, there could be room to evaluate other factors that affect earning potential. For example, adjusting one’s attitude towards work and/or an examination of whether or not one’s work performance is worth more money, is also worth considering.
My suggestion would be to explore ways you can clock more hours or qualify for promotions and raises whenever they come available. Demonstrate a strong work ethic by not calling out every time your period starts or being habitually late because your day can’t start without that $6 coffee from Starbucks you can’t afford anyway. Show your employers that you will show up as promised and consistently deliver results which can move you to the top of the list for raises, promotions, extra hours, and bonuses. Don’t bring your marital issues or baby daddy drama to work or waste time complaining or gossiping about stuff that’s not relevant to your job. Create a reputation for yourself of being a hard worker who deserves more, which can posture you to actually receive more. Basically, you can’t be lazy and half ass at work and then expect anyone to give you more of what you need. There is nothing in this world that comes free of charge accept God’s love and grace and it is sufficient enough to sustain you through the kind of grinding that can get you out of debt. Under-employment, minimal effort, low productivity, a bad attitude, or an overdependence on public assistance will never lead you anywhere. Wake up, Wake up! (It’s The First of the Month) You’ll only find yourself further down the rabbit hole with more bills, more collection calls, more worries, more depression, more guilt and more shame. I think “more work” sounds like a much better alternative.
Nest Eggs
If you want to get out of debt, you MUST commit to saving, period. This was an area in which I consistently struggled but going through a Chapter 13 was the kick in the butt I needed to finally start making saving a habit. Like I said, there were plenty of sacrifices that had to be made while we were going through the bankruptcy process, but our yearly family vacation was not something I was willing to forgo. As a therapist, mental respite and escaping everyday reality becomes imperative. For me, there’s something about roller coasters that transports me far away from talks of depression and trauma back to the simplicity of childhood. It’s therapy for me, so the idea of not vacationing for five years was gonna be a “no” for me dawg. But without a credit card to swipe, that meant some serious saving needed to occur. I remember it taking almost three years to save enough money take the family for a trip to Universal Orlando. When we finally got there, I was determined to ride every coaster ’til the wheels fell off. I was in the park late like that last drunk person at the club who refuses to leave until the music stops, the lights come on, and everybody else went home. When you save three years for Universal, you don’t care if it’s Harry Potter or one of the Minions, but somebody’s going home with you. Lol!
But seriously, bankruptcy taught me the importance of working against the need for instant gratification. Everything doesn’t have to happen today. Saving for the things that you want is not only responsible, but leads to greater satisfaction and pride in oneself when the reward finally materializes. I told you all that we finally purchased a lovely new home after all of that struggle, and the gratification I feel knowing that it was well earned is undeniable. Yes, we probably could have qualified for a subprime loan at one point on a house we really didn’t love just to say we had a house, but I’m grateful that God didn’t allow for things to play out that way. We needed to develop the discipline to save because with a house, anything can go wrong and you have to be prepared for the fact that there is no landlord who will send someone out to fix what’s broken. Saving a minimum of 10% of your earnings every paycheck for emergencies is wise. Saving 20% to include luxuries is even wiser. This way, you’re always prepared if the tire blows out or the washing machine dies without having to take out a loan or max out your credit card. Also by saving that 20%, there will eventually be enough extra to possibly take a mini-vacation or enjoy a spa day which are essential forms of self care. After 40, saving should become even more aggressive as retirement age looms and our bodies start to tap out on us. When the “check knees” and “check back” lights start to come on, you’ll want to be saving at least 30% of your income in preparation for the inevitable fact that working won’t be an option forever.
Extra Cheddar
The term “multiple streams of income” has been trending for awhile now and in today’s economy, I’m glad about it. If you’re blessed with the ability to pay all your bills above the minimum and cover all of your living expenses plus savings with one paycheck, more power to you. But for people staring down the kind of debt that I was once up against, one paycheck may not cut it. This is where side jobs and side hustles become extremely beneficial. For me, I was working full-time for a private hospital that allowed me to get the supervision I needed to upgrade my licensure. Once, I got the higher license, I kept my full-time job and began providing online therapy services through another private company. Since then, I’ve added performing substance abuse evaluations, speaking, and mental health consulting to my employment repertoire and the extra income is partly why we were finally able to qualify for the home we’ve dreamed about for so long. Now, I’m not advocating for any woman to work herself to the bone forever, but there may be seasons in life when this level of hustling is necessary. If done right, side hustling can be a temporary solution that allows you to pay off high interest debt and save more aggressively. A productive grinding season could possibly enable you to return to a life where one paycheck is sufficient. Now if you like nice things and have expensive tastes, perhaps keeping a regular side hustle is the best mode of operation But for people like me who are basically content with just a vacation a year, having multiple side hustles may not be healthy forever. However, if there is something you love and are good at outside of your main job, I strongly encourage you to maximize your earning potential with regard to that gift, especially if doing it doesn’t even feel like work. If you are a gifted hair braider, resume writer, or crafter you can easily decide to utilize those skills and assign all profits to paying down debt or saving. If you are a man who is good at yard work or cutting hair, let that be the money used to tackle overdue bills and settle collection accounts. Everybody likes cheese, but a little extra cheddar makes everything better.
It is my hope and prayer that someone reading this will know that they already possess the power to achieve financial health. There’s absolutely no need to drive yourself into bankruptcy, like I did, before you decide to adopt habits that will set you free. We all have God-given internal resources but it’s up to us to tap into them and make them work for us. The bible says that the Lord gives us the ability to create wealth so don’t remain in financial bondage because you insist on waiting for someone else to relieve your burden and bestow good fortune upon you. Even these stimmy checks everybody’s so excited about aren’t enough to make any of us rich. As with anything, it’s what you choose to do with whatever you’re given that counts. Be blessed everyone and stay tuned for Part 4! I promise not to take another month to post it either. 🙂
“All hard work brings a profit, but mere talk leads only to poverty.”
Proverbs 14:23
