Beating Broke

Personal Finance from the Broke Perspective

I’m Fine, Thanks

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I’m Fine, Thanks, the documentary that Adam Baker has been traveling the country recording over the last several months is almost complete.  As part of the finishing up process, he, and his crew at Crank Tank have opened it up for funding on Kickstarter.

From the moment that Adam announced the project, I’ve thought it will be an excellent project.  There’s not much that Adam turns out that isn’t top notch, and the topic of I’m Fine, Thanks is one of my favorites.  It deals with complacency, in work, family, and in life and how the different people that he interviewed deal with breaking free of the complacency that they face, and looks to also include several people who have done it and share their story.

One of the biggest things, on my journey from work, to quitting my job, to going back to work, has been recognizing my own complacency with my life, and attempting to break free of it.  It doesn’t mean you have to quit work and walk off into the wilderness.  What it does mean is that you have to recognize the areas that you are being complacent, and make efforts to change them.  I’ve made great strides in the right direction (I think) and still have a long ways to go.

That’s why I think that I’m Fine, Thanks is such a great project.  I’ll be adding to the funding pool, I just haven’t decided how much yet.  Consider doing the same.

Have You Become Complacent with Your Gazelle Intensity?

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If you have tens of thousands of dollars to pay off, gazelle intensity can be exhausting. You can easily begin to feel sorry for yourself and lament all of the things you have to give up and sacrifice when paying down debt.

We started our journey to be debt free on October 20, 2011. Our debt was a mind-numbing $57,966.01. In the 7 months since then, we have paid down almost $10,000. (We are sitting right around $48,000 now.) I am proud of our progress, but we have reached the point where the journey is getting long and difficult. Gazelle intensity has lost its luster.

Mhorr Gazelle (Nanger dama mhorr) © by 5of7

While we have no intentions of adding any new debt, we sometimes want to slow down and enjoy life. I don’t want to work so hard all the time; I want to spend money on treats sometimes.

And just like that it happened. The lifestyle creep began. We had been not been spending any money on eating out, and in May we spent nearly $200. Yes, I don’t think that seems like gazelle intensity either.

My kick in the pants came when I read on Yahoo! that Joe Mihalic recently paid down $90,000 in student loan debts in 7 months. Seven months! That is nearly $13,000 a month. Intrigued, I read more about his story on The Huffington Post.

After he did the obvious measures of selling off his extra vehicle, his motorcycle and cashing in investments and savings, he went renegade and cashed in his $8,000 retirement. (We certainly have enough in our retirement to erase our debt, but I am not as young as Joe, and I wouldn’t be willing to pay the penalties. Most financial experts do NOT recommend wiping out your retirement to pay down debts.)

Then he made the hard sacrifices including:

  • Not having dinner dates the entire time he was paying down his debt (opting instead to take dates out for coffee and bagels)
  • Foregoing travel at Christmas to see his parents
  • Missing two friends’ weddings
  • Finding two roommates on Craigslist
  • Starting a side business as a landscaper
  • Not buying any new clothes
  • Shunning consumerism in general

He was full force gazelle intense, and it paid off. He, as Dave Ramsey says, “lived like no one else so later he could live like no one else.”

While we are generally frugal, we slip up and spend too much money on groceries and other expenses (such as our unnecessary trips out to restaurants this month). There is still some fat in the budget, and that fat can be cut and funneled toward our debt repayment. We still have room to improve.

Sometimes when you are tired and are immersed in your debt repayment, getting out of debt can feel hopeless. You can feel like the debt will never go away, and you can start to doubt yourself and the sacrifices you are making. In times of doubt, read stories like Mihalic’s to see that gazelle intensity does work. He made it through to the other side. You can, too.

Are You Rationalizing Your Way Into Debt?

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Staying out of debt is difficult.  Terribly difficult.  It isn’t made any easier if you rationalize yourself into debt, either.  Many of us spend a good deal of our time and energy trying to get out of debt, and stay out of debt.  We do that through so many devices, and each have our own system that helps us along the way.  Budgeting is obviously a big tool that many of us use to make sure that we have enough money to pay the bills, and ourselves at the end of the month.  We figure out how many months it will take to pay off this debt, or that debt, and then budget out that amount over that many months.

Sale © by markhillary

Many years ago, I spent a few years working as a salesperson at a retail store where bigger ticket items were popular.  Computers, televisions, and cell phones were big sellers, and good for commissions.  As part of our training for our jobs, we were trained on the many ways to sell a customer on the item they were looking at, and even how to convince the customer that they needed the upgraded item.  One of those sales tactics was to help them rationalize the purchase.  And, chief among the ways to do that was to take the price of the item, break it up over a set amount of months (24, 36, 48, 60) and tell them how much they’d be spending “a month” for the item.  Suddenly, that $2000 computer (it was that long ago) becomes a $25 a month purchase.  Psychologically, people are more likely to purchase something if it’s under $100.  Even if that “under $100” is in the form of a monthly payment for several years.

Salespeople are the only ones we have to watch out for when it comes to this tactic in particular.  Pay special attention the next time you’re looking at purchasing something.  See how many times over the next month, you attempt to rationalize a purchase based on what it will cost per month on credit over what the total price will be.  I think you’ll be surprised just how often you use that same sales tactic on yourself.

Don’t rationalize your way into debt.  Fight back, and stick to your guns.  That purchase has a total price.  And if you’re buying it on credit, that price will be far larger than if you had purchased it with cash.  More importantly, don’t saddle yourself with more debt just because the “monthly” price is more palatable.