Tag Archives: debt

What Will You Do in 2020 to Make Your Difference Financially in 2021?

So, in my last post, I mention the four major areas I plan to focus on in 2020:

Personal Life
Home Life
Financial Life
Professional Life

I said that I’d be sharing some of the things I’m doing, learning, and planning for myself in this new year. No particular time table. No scheduled challenges. No added pressure contributing to the stress.

Even though I was planning to write from my own experiences, I couldn’t pass up this opportunity to share an awesome story with you from one of my BFFs adult daughters. I think you will find it very inspirational, even if the nature of it doesn’t specifically apply to you.

For the sake of this blog, I will call her LW, a 30-something year old, recently divorced, working mom of two kids. And like many of you reading this, she is in debt; a lot of debt. And like a number of you, she decided to do something about it.

99.999 percent of you will never win the million dollar lottery. And almost as many will likely never receive a multi-hundred thousand dollar settlement or inheritance. So the reality is that if you are living with debt that you can’t pay off each month, and you want to change that, then you have to be willing to change you. And by changing you, I mean, change your mindset about debt.

Debt isn’t something that just poor or middle class people struggle with. The simple definition of debt is owing more than you earn or have. Break-even means only spending what you earn/have. So if you earn (or even win) one million dollars, but you spend one and a half million; then you’ll find yourself in debt to the tune of $500,000. That’s why you often read about athletes who received huge multi-million dollar contracts, ending up broke just a few years into their retirement; or lottery winners losing their millions less than five years after their win.

But debt doesn’t always come about as a result of mismanagement of money. LIFE sometimes throws us a curve ball, resulting in unexpected expenses, a shift in lifestyle, or downturn in the economy. A bad investment, a business deal gone wrong, job loss, mounting medical costs, and lots of other things can impact your financial life. How you respond, and your willingness to adjust your lifestyle to your new normal, may determine the future of that financial life.

Here is LW’s story. The “bold” is my emphasis.

In 2019 I was finally in a position to take control of my finances, and I’m taking a moment to celebrate what I’ve accomplished.

On 1 Jan 2019 (after my separation but before my divorce was finalized), I had $120,814 of debt to my name. The number made me physically ill to look at, and I was burdened by 6 different minimum monthly payments on credit cards, a personal loan, a 401k loan, a car loan, and one (large, consolidated) student loan.

In July, my divorce was finalized.

Today, on 1 Jan 2020, my total debt is now $68,891 – just my car loan and student loan. I paid off $51,923 of debt in 2019, focusing on the lowest balances first, and snowballing those monthly payments into the next-highest debt as they were freed up.

I didn’t accrue any new debt. I’ve been so blessed by family – I lived with my parents rent-free for half of the year, then moved into a family-owned condo where I pay very low rent. I’m blessed with a good career and good income (that I work hard for), but even outside of that I worked my ass off!

I sold a LOT of my stuff. I started reselling gently used clothing on Poshmark and delivering for Shipt. I’ve never really had problems controlling my spending, but I tightened my belt even more this year, trying to focus on reducing fast food and restaurant meals and cooking at home instead; using what we have instead of buying new; continuing to use coupons and rebate apps like ibotta, and using our local “Buy Nothing” Facebook page. I didn’t buy any Christmas presents this year except for my girls (sorry, fam – next year!).

And it feels amazing; freeing, empowering.

I have a long way to go and a lot more work to do. And in other ways this year was full of more ugliness than I’d ever wish on anyone. But it feels incredible to see the quantifiable progress I’ve made in this one area. I’m on track to be completely debt-free in 2020.

2019 was for recovering, stabilizing, and rebuilding. 2020 is for flourishing, living generously, and teaching my girls how to do the same.

— LW

Time to Move from Financial Denial to Reality Living

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I made a Facebook post on my Catching Raindrops in Water Buckets page, bragging about how happy I was to find a large container of Folgers coffee on sale at Kroger. I was very happy about my find because I was in there picking up items for an event that was happening the next day, and coffee was among them.

Seeing that winter was refusing to leave, and the forecast called for a rainy and much cooler day, I knew that a fresh brewed pot of hot coffee would be a welcomed treat to our guests!

But within hours of me posting my 75% savings, and talking about having paid less than three dollars for a 23 ounce container that normally sold for over eleven dollars, one of the women who follow my page decided to mock my posting.

“It is $3 for a reason,” she wrote. Adding the ever present “hahaha” whenever someone’s trying to be funny. I fired back; not because I was personally offended. To be honest, I don’t routinely buy Folgers coffee. I don’t drink enough of it on a regular basis to buy large containers of anyone’s coffee. So I tend to grab the smaller bags; usually when I have a coupon for the grocery store, or when a place like World Market runs them for a Buy One Get One free! And on the occasion I’m sitting and writing from one of my favorite cafes, I’ll usually buy a small cup there, if only to justify why I’m taking up a seat while working on grades or even this blog.

But I responded to her, not so much to set her straight — perhaps she really was trying to be funny — but more as a message to any of my other readers who thought the way her comment implied:

“Lots of people love Folgers. Actually, lots of people are drinking it and don’t even know it. Don’t you know that’s what most people are serving at conferences and church? Do you really think it’s the high premium ones being served?”

You see. I’m convinced that the reason so many people struggle financially for so long following a job loss, or downsizing, or an economic blow to their bank account, is because they’re not willing to adjust their lifestyle to their new life. They live and spend and go about their days in what I call “denial of the moment,” that catches up to them when the debt collectors come calling.

I know there are some who really don’t know how to make a major life shift, because luxury spending and not having a budget was always so much a part of their every day life, that adjusting is difficult. They don’t know where or how to start. However, that doesn’t mean that they shouldn’t learn.

But then there are others; several people who I know personally, who don’t because they won’t. They would rather be seen with the five dollar green logo cup of coffee in their hands, than the one dollar gas station version; or even something brewed from home. They would rather run up their credit cards at their old familiar boutique retail outlets, than to be seen coming out of a discount store, let alone, any type of consignment shop.

These are the women who buy cars for “show” and look down on generic or store-brand products, some of which have beaten the higher priced items in blind taste tests, or are even products made by the same name brand companies. But when you’re putting on a show, the illusion is what you’re trying to sell.

And that’s one of the things that can get people into financial trouble, or gets in the way of them getting out of it. For an illusion to be believable, it has to be sustained. People have to work at getting others to buy their lie.

Today in church, I sat next to a friend I’ve known for over 10 years. When service was over, another woman we both know commented on her outfit; complimenting the skirt and top she had on.

“I got it from Goodwill,” my friend spoke up confidently. Their conversation after that was about which one of the Goodwills in town had the best finds, and which day of the week was the best time to go, etc. I had to smile, because I’d actually gone shopping with this friend at several Goodwill stores before. I’ve also spoken frequently with other women about giving it a try; especially if they said they were serious about watching their budgets.

But if there’s anything I’ve learned watching and personally walking through this past decade, it’s that you can’t make someone change their ways. You can only offer them assistance, show them another way, and encourage them to make life’s adjustments to their new normal. It’s up to them to face the reality of where they actually are, and stop with the illusion of where they once were, or hoped to be.

There should be nothing embarrassing about being wise with your money.

When Stores Close, Where Do People Go?

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Back before the Christmas holidays, I remember hearing news about the toy store company, Toys R Us, closing some of its stores. I didn’t take a serious note of it; first, because I don’t have kids, and my youngest nephew is 16 years old. So it’s been quite a while since I’ve shopped in any of their stores. Second, news of the closing of “some” of their stores was not unlike the reoccurring news of Kmart, Sears, Macy’s, even Sam’s Club. It had become an all too real part of the news cycle. Another month, another retail store filing bankruptcy, mostly to reorganize, and in the process, closing several of their stores.

But then earlier this month, that news changed. It was no longer just some stores closing, but rather, news broke that the company planned to sell or close all 800 stores in the US. The part that jumped out to me in the articles I read was that as many as 33,000 employees would be affected!

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From what I understand, Toys R Us had declared bankruptcy back in Fall 2017 because of an almost EIGHT BILLION DOLLAR debt it was struggling to pay. Let that sink in… Other than the position we’ve allowed ourselves to get into as a country, where else do you hear about a business continuing to operate for so long with that kind of outstanding debt?

One of the things that came to mind was wondering how many employees took any action upon originally hearing about the company’s bankruptcy? How many people in upper and middle management pulled out their resumes and started working on updating their information? Or who of the hourly employees started looking for other places hiring in their community? How many even knew or gave thought about the financial instability of their company — even though the information was readily available and reported on?

Perhaps it’s hard to say with certainty what any one of us would do, given the same scenario. Or maybe you DO know, because you have already been in this situation. But I ask these questions because I’m curious as to why people stay in a place, making little effort to seek alternative employment, when they know the clock has already started ticking down towards the day when they will lose their job. An announcement that a company you work for is closing should signal that it’s time to get serious about making a change; preparing for reality — the new normal that’s about to fall up you.

One article I read talked about the gap between the time when some people can apply for unemployment, and the timing it takes to actually start receiving an unemployment check. And while that money is there for such a time as this, it won’t be the same amount as what most soon-to-be former employees have become accustomed to living on. By its design, it’s suppose to just tie people over until they find that next job. For some, they’ll have one the day their store closes. For others, it may take weeks or months.

So my question for you is, how prepared are you if you were to find out today that you will no longer have your job by the end of the year? Or by the end of the month? Maybe even by the end of the week?

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In a list posted by Clark, a retail and consumer news site, some of the other stores scheduled to close at least some, if not all of their stores this year, include: Abercrombie & Fitch, Foot Locker, Best Buy cell phone stores, J.C. Penney, Bon-Ton, Sam’s Club, Macy’s, J. Crew, Gap and Banana Republic, Teavana, and Michael Kor’s. Additionally, Ascena Retail Group, which is the women’s clothing retailer that operates the brands Ann Taylor, Loft, Dress Barn, Lane Bryant, Justice and several others. (https://clark.com/shopping-retail/major-retailers-closing-2018/)