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The author of The Best of the Cheapskate Monthly provides readers with detailed plans for a financial makeover. This is an encouraging and user-friendly guide for applying sound, simple financial principles to the lives of ordinary people with typical financial challenges. Original.
I've Been Where You Are
There's a very good chance I've been where you are now, financially speaking. I've experienced just about every situation imaginable. I've been slightly uncomfortable. I've been in huge jams. I've gone through minor dilemmas, moments of unbelievable abundance, and seasons of interminable financial drought. I've been on the mountaintop of plenty, in the valley of desperation and every point between. I've made most of life's worst financial decisions. I know the secret terror of wondering not if, but when, to call the bankruptcy attorney. On more than one occasion I've thrown myself into a heap wailing; "This is it, there's absolutely no way out this time."
From time to time I experienced the delight of having what I considered large sums money come my way. But time and time again to my utter astonishment instead of "more money" solving the problemsand fixing everything, I would be left in an even worse situation when the money seemed to disappear into thin air.
I know what it feels like to live in a perpetual financial panic while trying to keep up appearances, dodge creditor's phone calls, figure out clever new ways to make sure the mail mysteriously disappears, hide the shopping bags, cope with foreclosure notices, finagle, contrive, and cleverly deceive. I know how to manage a new outfit even when the checking account is overdrawn, the utilities haven't been paid, and the credit cards are way beyond their limit.
I've been caught up in the trap of worshiping money, convinced that just having enough of it will fix everything. I know how to envy others who in my distorted way of thinking have perfect lives, make more money than God, and are my living proof that money can absolutely buy happiness beyond belief. I know how to zap the joy right out of a marriage. I know how to put a spouse under so much financial pressure that his career is in jeopardy and his patience is all but spent.
Believe me, if financial juggling were an Olympic event I'd be wearing a gold medal.
No matter what shape your finances are in, no matter how embarrassed, frightened, or uneasy you are right now, relax. I know what you are going through. If I haven't experienced your exact situation I probably know someone who has. I've heard it all, so you can't shock me. You should find comfortin knowing you are not alone and relief in understanding I'm not going to judge, condemn, or flog you.
My own excursion into credit hell began quite innocently. As a college freshman I quickly adapted to the privacy, convenience, and freedom my personal checking account offered. And the flexibility--that was the best part. By exercising a few clever maneuvers I could make purchases as early as Wednesday, get paid on Friday, deposit my check the following Monday and feel a little bit too cocky knowing that once again I had beaten the system. No problem. I could appear as affluent as any of my friends. I could cash checks at the local market and have sufficient time to figure out how to cover them later, in private and at a more convenient time.
My propensity to spend money that I didn't actually have was greatly enhanced upon the occasion of my marriage to Harold Hunt. I got my very first credit card! As credit cards go it was no real prize. It was a gasoline card which required full payment each month. It didn't greatly enhance my spending abilities but it did free up cash which heretofore had been required to purchase fuel. And it was certainly superior to our checking account. With the advent of more efficient computer systems the bank had rudely shortened the period of time I had between writing checks and depositing funds to cover them.
It was a time in my life when I experienced the ultimate in mixed emotions. I was proud that Harold had aspired to the position of bank manager,but he was my bank manager and so it was becoming increasingly more difficult to hide my audacious activities. With my Texaco credit card I felt quite entitled to "fill 'er up" at will and then enjoy 30 days of denial before being faced with the inevitable pain of payment.
My first credit card kept me happy for oh, two or three months until the gentle beckoning of other credit cards with more potential won me over. I began collecting plastic, not because I had a particular reason or plan but just to have in case of emergency. The problem is that I became a habitual user. I had a lot of emergencies. Plastic spending felt good, too, because it relieved the panic. Plastic was convenient, it was socially acceptable, and it allowed me to enjoy now and worry later.
In time I no longer saw my purchases for their price tag but for what they represented as a monthly payment. A 10 or 15 dollar minimum monthly payment seemed hardly worth a second thought. Such a reasonable payment amounted to mere pennies. Surely we'd never even notice it. I was impressed with the payment arrangement the credit card companies offered. The issue of interest charges never crossed my mind. The all-consuming issue for me was having as many lines of credit with the highest limits possible.
Over the course of the first 12 years of our marriage I managed to do a few remarkable things, not the least of which was give birth. I had two boys we named Jeremy and Josh. So anxious was I to relivemy own childhood through the two most wonderful kids on earth that my unbridled spending now had a higher, more justifiable purpose. I also gave birth to a huge, ugly monster called debt. In time it would entice, seduce, and stalk me. I allowed it to do every thing it could to destroy me, my marriage and my home. When it came to money, I did everything wrong.
Sure, we made pretty good money during those years. But I consistently and impulsively overspent our income. The more we made, the more I spent. More was never enough. When Harold's raises and promotions didn't come fast enough, I would demand that he find some way to refinance the house. Inevitably we would end up spending our precious equity to cover late fees and exorbitant interest charges in our never-ending quest to "catch up."
In time our ordinary living expenses plus the minimum monthly payments on the constantly growing debt monster exceeded our monthly income. Keeping food on the table and the house payment reasonably current became the emergencies that sent us in search of new sources of credit, higher credit limits, additional cash advances--loans from any source on any terms.
My turning point came one Saturday in 1982. I woke up from my marathon debting-spree to find my husband unemployed with no unemployment benefits, absolutely no income, and over $100,000 in unsecured debt. I was overcome with terror and panic. Like a cornered animal I felt as if there wasno way out, no solution and everyone was out to get a piece of me. We were doomed to lose everything that mattered.
Never have I felt so lonely, so abandoned, and so helpless. For the first time in my life I was completely out of ideas. My schemes had failed along with all of my clever back-up plans. I was at the end of the line, I was tired and there was nothing I wanted to do more than give up. It is difficult to describe the unrelenting pain I carried in the pit of my stomach. So debilitating was my situation I couldn't even talk about it. To say that the communication between Harold and me was less than desirable is an understatement. At the time in our lives when we needed each other the most, we were the least able to reach out.
As I sunk to my all-time low there was nothing I could do but fall on my face completely broken and repentant before the One who knows me best and loves me most. I begged God to forgive me for the terrible mess I'd brought upon myself and my family. I confessed my penchant for lying, for deceiving in order to work things out on my own. I unconditionally promised that I would do whatever it took to turn this horrible situation around, to pay back the debt and change my ways. Since I was already in confessional mode I humbled myself even further by admitting to God that I had absolutely no idea where to start or what to do.
I wish I could say that at that very moment a brilliant light burst through the window as I was kneelingon the kitchen floor with my face buried in an overstuffed rocking chair.. If only a loud voice had emanated from the brilliance announcing that all our debts were miraculously paid in full, our credit slate wiped clean. If only I could report that at that very moment I was supernaturally endowed with an invisible, impenetrable protective shield which would fortify me against ever again being tempted by the seductive lures of the credit industry. If that had happened, I would have a very happy publisher because this book would be guaranteed a permanent position at the top of the bestseller list.
Aren't we all secretly looking for miracles that will let us off the hook? Magic pills that will instantly fix everything? I received no such intervention, no magic. I suppose it is a good thing too, because had the solution been handed to me on such a scintillating platter I doubt I would have ever undergone the personal transformation that I have. Had my personal financial recovery been simple I might have been too easily persuaded to return to the foolishness that got me in trouble in the first place. Pain and fear are fantastic motivators, and was I ever motivated.
Change for me was a process which began ten days later. I received a phone call which would alter our lives. I agreed to accept a two-fold employment position. I became both a property manager for several large industrial developments and a real estate agent selling and leasing industrial properties. Hard work? Yes. Stressful work? At times. Wonderful opportunity?The best. With my new job came a big change on the home front. As I became the breadwinner, Harold became the home keeper. Switching roles turned out to be an excellent move. Jeremy and Josh got to spend a lot of time with their Dad, and I had an opportunity to test my resolve to do whatever was necessary to pay back the debt and change my ways. I learned firsthand how difficult it can be to earn a living.
I came to the point that I acknowledged the true source of my income. I determined that I'd spent my last moment worrying about from where the money would come. I realized for the first time in my life that my employer (or my parents, investment portfolio, pensions, bonuses, rental income, unemployment checks, gifts from family and friends or any other entity) was not the source of my income. These were simply channels through which I received money. The source is God who'd given me abilities and skills. I determined that never again would I fear the loss of my job, the fall of real estate values, the stock market or any other economic disaster. I could relax confident in the fact that the channels through which I receive money may come and go, but my source is the same yesterday, today and tomorrow. Never again would I mistake the channel for the source nor would I shirk my responsibility to perform to the very best of my ability.
Our spending habits immediately changed dramatically. Over the following months and years we learned to cut and cut. And cut. And cut somemore. I can't say we did everything right. Because we didn't share our situation with anyone and sought no outside help we missed out on an important aspect which would have surely sped up our resolve to live debt-free.
There is something cathartic about telling another person about your situation and plan to change that situation. In 1992 I had one major cathartic experience.
By that time we had struggled through 10 years of financial recovery. We'd done the old three-stepsforward two-steps-back routine. We didn't have a good master plan and treated the entire situation as a deep dark and embarrassing secret known only to the two of us. We stumbled more than once which did nothing more than delay the time it would take to reach our goal of becoming debt-free. By this time we had paid back the major portion of the debt; we had started our own real estate company and things were going well. But the debt repayment was taking much too long. I was becoming impatient, and began looking for a way I could bring fresh new excitement into my life and at the same time make enough additional income to get rid of the debt once and for all.
My search ended when I got the wild idea to write and publish a subscription newsletter. I had the equipment in place, I had a modicum of computer knowledge, and I sure knew the subject matter. After a few months of planning and strategizing Cheapskate Monthly was born on January 1, 1992.
In the first issue I gave a very abbreviated version of my story, the mess I'd made, and the journey we were taking toward recovery. I had learned to affectionately refer to myself as a "cheapskate" because that was the best word I could come up with which defined the radical changes I had learned to make. I redefined a cheapskate to be one who saves consistently, gives generously, and never spends more than he or she has.
Within a very short time I felt as if someone had turned on a faucet. Subscriptions started pouring in, the media started calling and I had to get a bigger post office box. Hundreds of letters began pouring in. Time and time again I would open a letter which would begin, "Dear Mary: I've never told anyone what I'm about to tell you ..." and then the floodgates would open. With each successive issue of CM I would open my heart further which in turn would encourage readers to do the same. As I became accountable to thousands of people throughout the U.S. and Canada my own personal recovery began to speed up.
As I began reading everything I could get my hands on in preparation for writing a new issue each month I began to understand where I'd been, why I did what I'd done and how far I'd come. I found validation in learning that much of we had done in order to get back on the right financial track was exactly right, and I had moments of regret and sadness as I admitted that we'd blown it on more than one occasion.
One of the most remarkable things I learned was that which I'd considered my unique problem was shared by many others. I even discovered people in situations worse than mine. But the wonderful thing was the sense of fellowship. In time I would receive so many letters that answering them became my number one challenge, but I couldn't ignore them because these were people who needed me as much as I needed them. As I would write reply after reply I could feel myself becoming stronger. The more I shared of my own recovery struggle, the more easily I was able to reject the constant opportunities to return to my old ways.
In time I began speaking publicly, telling my story and offering hope and encouragement to others. Soon I found myself living my recovery in fast-forward mode and in the public spotlight.
Some time during that first year I was offered a book contract which I accepted and miraculously found time to write. Once the book was published the faucet turned on full-blast and the letters started coming faster and faster. I received letters of desperation, fear, panic, success, joy and thankfulness. You name the emotion or situation and I believe I have at least one letter in my files that fits it to a tee.
So did we reach our goal? Yes. Do we have new goals? Yes. Have I recovered? No. I will always be inprocess with my recovery. It is a step-by-step proposition for me. I still struggle with the temptations of overspending, getting into debt and having today what I'd rather pay for next year. I handle it muchbetter now than I did before. I can go for days without being tempted. And I find that speaking out and helping others, encouraging those who are in the financial pits, encourages me. It's a lot like physical fitness. The more I work at my recovery, the stronger I get. But I need to work out regularly or I am sure to weaken and become susceptible to a major backslide.
... today has been the most stressful of all days of my financial worries.
"I am a 34-year-old homemaker. I have two children and left a lucrative career to stay home with them thinking I could and would make the necessary sacrifices. However, once my unemployment ran out I slowly started to get into debt. We just weren't making it on my husband's income alone.
When I quit work I had approximately $4,000 in credit card debt and a personal loan of $5,000. While I worked I lived from payday to payday and after ten years I really didn't have anything to show for it except maybe a closet full of clothes. I was always responsible for my own debts and my husband his.
When I quit I received a $20,000 severance which was to have gone to my mother to repay the $15,000 she lent us to purchase our home. But instead I paid off the personal loan ($5,000) and spent the rest on I don't know what.
I then started borrowing funds a little at a time from my mother's account to cover my overdrafts (I had signing authority but up until now she had no idea.) I just thought, "Oh, I'll be able to start paying it back every payday," but that never seemed tohappen. Now she knows and is furious with me. I owe her about $25,000.
This, combined with my husband being totally unaware of our obligations, has caused me immense stress. He has no idea that I've used his credit cards for cash advances to the tune of $ 7,000 and that I've remortgaged our home twice now without his knowledge.
My total debt is approximately $130,000 and my husband thinks it is $60,000. I can't talk to him--he would never understand.
Sometimes I think the only way out is the coward's way. If I were to pass on our home would be paid for, my personal loan would be paid for (insurance) and my husband and children would get a $150,000 life insurance policy.
I feel like I am going to lose it all--my sanity, my family, everything. Right now I feel so ashamed and embarrassed. I hardly ever leave the house ...
Copyright © 1995 by Mary Hunt.