Thursday, July 23, 1998
Finding a Way, Part II
By Captain Terrence T. Manns
Hello again, my Fribble friends. First, I would like to thank all of you for the kind remarks we received about "Finding a Way." We were really happy to hear that the article made a difference and since so many of you have asked if I would share the dirty details, the saga continues.
I was told once that you should never give a speech without starting off with a joke and never, under any circumstances, give advice without first issuing a disclaimer. So, here's my feeble disclaimer attempt. What you are about to read may or may not work for you. We were two desperate souls; therefore, we searched for and tried just about everything you can imagine. Our techniques and methods changed several times, but the ones you are about to read are those that always made the cut and survived the run.
Now, Let's get ready to Fribble! The first thing we agreed to do was to agree on a few important ground rules: (1) Never argue over money -- we didn't have any so why fight about it. (2) Never try to find fault -- we knew exactly why we were in debt: "no discipline." It became a family issue and "we" accepted the blame. (3) Complete commitment -- no plan will work without it. Okay, after you agree on your ground rules, give the following a go:
Goals & Objectives: This is where the leather meets the ground. You must set attainable and realistic goals and objectives. Don't get outrageous; start low if you must and work your way up, but you must set goals and objectives. Don't be upset or lose faith if you miss your mark from time to time. It will happen. Just regroup, readjust and as we like to say in the Army: Adapt and Overcome. Also, I suggest a proactive and not reactive approach to your overall plan.
Credit Cards: Stop charging. Decide on the credit card (notice I said card and not cards) you want to keep for emergency purposes (i.e. airline tickets, auto repair, etc.) and made little crispy critters out of the rest. Reduce interest rates by pitting card lenders against each other. Research and find lower rates, contact your card lenders and threaten to jump ship if they fail to match or beat the better rates. Most will. Abandon those that fail to. Transfer your balances as often as required to keep low interest rates. Try this web site: www.asque.com, The Asque Credit Card Rate Guide to do your research.
Consolidation: Work your debts down to figures so a consolidation loan will have a low monthly payment. This will allow you to double up on the monthly payments. Good rates are important here also. Try using the loyalty curve with your bank, but if it fails to get you the best rate, again, complete abandonment comes to mind.
Personal Budget: Let's face reality for a moment. No plan will ever encompass 100% of your income. I promise that if you get paid today and use every penny to pay bills tomorrow, the next day Murphy will pay you a visit. Therefore, we agreed to maintain a small amount of money each month for personal use. Now that you have a figure, never go over it. In other words, let's assume that at the end of the month you have $40 dollars remaining in you personal account and your better half has $75 dollars. Don't hoard. Put the $115 dollars towards a bill. This will be a big money saver for you and will help discipline your spending habits. Turn this into a contest and treat the one who saves the most to a dinner or a movie.
Ankle-Biters: I call them ankle-biters because they are the little things that nibble away your income. Most of the time they go unnoticed, but they are there slowly eating away your income. You have to get rid of things like spa and gym memberships, Golf club memberships (aaaaaaaaaagh!!!), magazine subscriptions, all twenty cable movie channels (after ESPN and the History channel -- is it really worth it?), lottery ticket purchases, etc. These things must go. You will be amazed to find just how much "back-in-the pocket" income you will generate by eliminating the Ankle-Biters.
Spare Change: Try this. Every evening you come home from work or school, place all of your spare change in a jar. Spare change should be anything under two dollars. At the end of the month raid the jar and use the money to pay down a bill. The change will likely add up to an extra $20 to $30 a month towards a payment.
Jeopardy/Wheel of Fortune: What the heck is he talking about? I can almost hear you saying it. Face it, when you are trying to get out of debt you find yourself spending more time at home in front of the tube. Well, it will be completely up to you to make life interesting and fun and trust me, you can have fun. We placed small bets on each Wheel puzzle and on the Final Jeopardy question. The loser tossed the cash in the spare change jar and it went towards a bill. We placed silly little bets on music, sports, and other TV shows just to help break up the routine. We still bet on Jeopardy, but now the money goes into our son's piggy bank.
The 50% exception/100% rule: As you work your way through your plan, certain events will likely occur -- a pay increase, a debt paid off, etc. This will increase the amount of money you will have available to pay on other bills, or provide money to use on other important areas you may need to address (remember Murphy). We agreed that at least 50% of this money would always go towards bills. That's the exception. The rule was 100%.
Junk & Junk: How many times a day will you take that leisurely stroll to the break area soda/snack machine? How about those 55-cent coffee breaks, and if you are a runner like me, the daily Gatorade supply. Give it all up and be amazed at the savings. Every time you want that snack, write down what you would have purchased and its cost and later donate that amount to your spare-change fund when you get home. Alternatives: Purchase the small one-cup coffee packets, microwave a cup of water, and make your own coffee. Give up the bottled Gatorade for powdered and just add water. Save, save, save. The Dirty Details in black and white.
These methods saved us a fair amount each month and helped us towards our ultimate goal of becoming debt free. You may be able to use these or incorporate a few others into your present plan. Some of you may already be using a few of the techniques. Great, but let's be honest about what you just read; it's not much on the surface, but it worked for a small-town country boy from West Virginia and a big-city Los Angeles girl. Yes, we know that we are the modern day Green Acres couple.
Once again thanks, good luck, and may the Fool be with you.