04 November 2012

Making money work for me...

A very hard subject to talk about is money. The times we live in right now have made it extremely difficult for folks to see a way out of financial nightmares once they start.

I watch in person and on the web, people struggling with finances. Some folks I admire for the actions they are taking to correct their situation, others I shake my head at in disbelief on the way they treat money and their credit, while still others I feel their pain, not knowing what to do.

I was in that place of not knowing what to do. I not only went into a panic when the phone rang, I hated getting my mail. Everybody wanted money and I had none to give them.

This is my second time of being in dire straits with money and bills.  The first time was about 20 years ago.  I was in my 30s and living life to the fullest.  I had a fancy car, an awesome stereo and all the toys a guy could want.  All of it acquired through credit and an unbelievable thirst for alcohol.  I didn’t care about bills.  I wanted this stuff and I was going to have it.  

This attitude changed when I got sober.  By the Grace of God I have been sober for 18 years and try my best to live an honest life.  The first thing I had to do was pay off these old bills.  These weren’t “emergency” bills… they were just “self-will run riot.”

I struggled and it took nearly eight years but I managed to pay all of those debts.  And even acquire new ones, which I kept current.

Things changed though when my ex-wife got ill.  Surgeries, prescriptions, follow-up care, and all the expenses going to these appointments put us deep in the hole.  Credit cards got maxed out.  The home was refinanced… yet we were still buried in debt.

We lived this way for ten years.  Paycheck to paycheck.  Sometimes getting my paycheck just to cover the expenses up to then… basically being broke as soon as I got paid.  Paycheck advances… anyway I could come up with money… I did… until I was drained. Our credit was shot and maxed out and no longer was I able to even make the minimum payments.

Like I said, we lived like that for ten years.  My ex-wife recovered from her illness but our marriage was dead.  A lot of it was because of finances and our different ways of trying to get out of the hole.  It ended up being a very depressing life to live.

I finally threw in the towel and moved out.  That was in January of 2009.  I started a new life filled with fear and uncertainty.  I found a place to live but had no money to move into it.  I sat and talked to the landlord about my predicament and asked him if he would rent me an apartment and if he would hold a check for two weeks.

Thankfully, he agreed.  If not I would have been homeless.  He showed me two apartments.  One had a couch in it and I asked if I could have that one.  I had no furniture to speak of… so this couch would at least give me a “home” atmosphere.

Those first two weeks in that apartment I ate tuna sandwiches, grilled cheese sandwiches, peanut butter and jelly sandwiches and macaroni and cheese.  I was beyond broke and beating myself up for letting it happen again.

The first three days I slept on the couch, but being 6’4”, the couch was quite uncomfortable and I ended up moving my bed to the floor. For the next month, I lived in fear, waiting for the world to collapse around me. Fear that I would forget to pay a bill or end up having my wages garnished.

Finally, I began to find some confidence that I could get out of this mess. The first thing I did was get a mattress. Not a bed... just a mattress. I placed that on the floor and felt like a king. I had a bed. It would take a couple of more months to get a bed frame. That I got for free. Some remodeling was taking place where I worked and I was given the old lumber and I made my bed. Three years later, I still have that same mattress and bed frame. It is a reminder of where I was when I started this journey.

I share this because I was at the end of my rope. Within those three years, I went from $65,000 in the hole to being totally debt free.

With a mountain of debt looking at me, I had three choices. The first one was bankruptcy. I didn't go this route, but if I did, I wouldn't have felt bad... these debts were beyond my control. The second choice was increasing income. I did this in the past. I nearly worked myself to death with two jobs and I still couldn't get ahead. The third choice was what I decided to try and that was to reduce my expenses.

Without realizing it. I started this right from the first day I moved into this apartment. I promised myself that I would never bounce a check again. My old checking account had overdraft protection and I used it frequently.

To stop this bad habit, I started rounding up my checks and rounding down my deposits. In a way, this was my first savings account. If I wrote a check for $14.01, in the checkbook I would write $15. If I made a deposit for $100.99, I wrote in the checkbook $100.

And you know what? I haven't balanced my checkbook in three years. I do check it on-line once a month, just to see where I am at. Right now by this simple method I have created a nice little savings account in my checking account. Even though I know it's there when I see zero in the checkbook I know it's time to quit spending.

Right away I also quit using change. I do know how much change I have, but I haven't spent a penny, nickel, dime, or quarter, except for laundry, in three years.

In the course of the year I cut my expenses by over $9,000.  And I’m still trying to figure more ways to cut down on expenses.

So where did the money go?  With one salary I paid two large medical bills and one dental bill. I cleared up bills with pharmacies and clinics. Two credit cards, as well as a store credit card.  A third and final credit card was paid in the middle of September and all my debt is now gone! Yes, I lost my house… but you know what?  That house was a chain around my neck with its upkeep.  Keeping the lawnmower in working order, roof repairs, car maintenance, appliances… it was a money pit.

It wasn't all smooth sailing though. Living in town I walk everywhere so I don't use my car much yet I still want it to run when I need it. I had some major work done on it and new tires... paid with cash. I had a dream of making a musical CD with poems I wrote... I got it done and had it produced... paid with cash.

While I have really clamped down on what I spend money on, I have not become so frugal that I have no enjoyment at all. I do give myself rewards. The small rewards is a once a month Sunday newspaper. I walk past the bakery every day and once a month, I'll stop in and get a couple of sweet rolls.

Awhile back, I gave a lecture at a university that was 40 miles from my home. I treated myself to a mini-vacation. I went up early, went to the botanical gardens, ate a good dinner, did my lecture, and spent the night in a hotel. I had a great time.

And yes, I do treat myself to one big reward. The last two years I have spent Christmas and New Year's in England. And will be going back again this holiday season... this time for a month. And you know what? Everything has been paid for in cash. No credit just cash. It is such a good feeling to come back to America and not be in debt up to my ears.

What I have learned is that, for me, I made money my god and equated it to my happiness.  I fell into the trap that I was entitled to all these things that we think are necessary for our life and I was so wrong.  Freedom for me came with owing less.

My life, right now is 100% cash only.  If I have the cash and I truly need something then I will get it.  If I don’t have the cash? FORGET IT.  By having so little, my “wants” are all but gone and I have never been happier.  

What is truly amazing about all of this is that I agreed to speak at an AA function, about nine months after I moved out of my home. The function was over 600 miles away.  No way would my old car would make it there.  So I thought I would have to cancel it after I looked at renting a car and saw that a credit card was needed to secure a rental car.  Well, I applied for a new one thinking no way I could get one… but guess what?  My credit went from so super bad to being acceptable and I got a card.  So my trip took place.  I paid cash for the car, but I had the credit card to secure it.

Dreams for 2013? First is new glasses. I could get them now, with my credit card, but I want to stay with the idea of cash only. Recently I increased my medical insurance coverage and will get a full check-up, something that I have been scared of doing because of finances... while I still fear it, I'm now prepared for it a little better at least. And a dental check-up.

I mentioned earlier that I don't spend loose change... for 2013, I want to try and quit spending dollar bills. To start treating dollars like loose change. That one may be a challenge but I'm going to shoot for it.

I've learned to pay myself first. It started with loose change and rounding my checkbook... but it has grown. It took 15 months but I got a savings account. I started small saving 10% of my paycheck. By constantly cutting expenses, I'm now saving 30% of my check and the goal for 2013 is to reach 50%.

In three years I went from near bankruptcy to being debt free. I don't live beyond my means and my wants are little and my needs are met. I did it not by going bankrupt or by getting a second job... I did it by cutting expenses.

I did it in a way that it wasn't all “work and no play.” I gave myself rewards and things to shoot for down the road. If all goes well and I continue to go down this path... my long range dream... like five years or so would be to ride the Orient Express across Europe.

Having been homeless I know how much money is needed to just survive. Having been broke I know how easy it is to make money a god. Money is not my god and if I have faith, money will work for me, not me working for it.

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