Friday, June 25, 1999

Twenty Bucks

by Carl Toft (2BELIEVE)

"Life is pain, Highness! Anyone who says differently is selling something."
-- Westley as the Man in Black/Dread Pirate Roberts in The Princess Bride

I have a problem. I'm an instant gratification junkie. Don't want it in a week, don't want it tomorrow, don't want it in an hour or even half a minute from now. Now is the time. Now, gimme! Yes, it's a personality defect, but it's mine. Society is not to blame, nor are friends or parents. Lord knows they've tried to teach me patience. I take full responsibility for it.

The financial impact of this habit has been quite devastating. Until the beginning of this year I spent like there was no tomorrow: $70,500 in credit card debt, student loans, car loans and parental loans. And why not? I had well paying jobs, and I could always pay stuff off later. Right? My best friend was Mr. Plastic, and he didn't ask for much -- merely 3% of the total balance per month. Heck, I used to have a field day every time I got a new card, inviting my friends out to help me break it in! And Mr. ATM/Debit Card kept me in cash for the places that didn't take Mr. Plastic.

Then I got married...

All of a sudden, I was accountable for financial decisions, not to myself, but to someone else. And unlike myself, she is a born saver. After taking one look at the disastrous financial straits I (and now she for that matter) was in, my wife put her foot down and said, "This is going to change." After examining last year's expenditures, we set up a budget where every single cent was accounted for and tracked, except for $20 dollars a piece per month. That was our allowance -- mad money to be spent however each of us saw fit, without having to account for it. But once that $20 bucks is gone, that's it -- no more 'til the next first of the month.

Other changes occurred as well, such as brown-bagging lunch, carpooling, working out at lunch to maintain health, drinking work-supplied decaf coffee instead of Starbucks, no cable, no new computer parts, cooking at home, and becoming an avid lurker of The Motley Fool Credit Card and Living Below Your Means boards. As a result we've been able to knock the debt down to $44,400 in five months.

Has it been painful? Heck yes! There are days where Mr. Plastic screams at me "Use me, abuse me, you know you want it NOW!" At that point I try to remind myself that what I really want is the instant gratification of being able to check my (as of yet imaginary) portfolio and see how well I'm doing against the S&P. And still being on Step 2 of 13 on the Foolish path of investing is a real ego check.

But it is still excruciatingly difficult to walk by the candy machine and not pull out part of that $20 to get something, just for gratification of it.

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