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Living Below Your Means
Some *Good* MOJO

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By altoflaco
May 15, 2002

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Work is a little crazy of late, and I'm extra busy because I'm trying to get as much done as possible before I leave for a brief vacation later this week. I wanted to drop by and share this story, and glancing through the posts from the past week or so, I think y'all might appreciate something on-topic and upbeat. (Have we really added abortion!? to the pantheon of spat-inducing LBYM-board topics?)

I decided over the weekend to lend almost the entire contents of my efund *gasp* to a good friend to help bail him out of debt. Over the past two years he has gradually traded in his spendthrift ways (I used to mockingly call him "consumer boy") for a LBYM approach. He's even given up using his car � he's riding his bike to work instead � so that he can apply the gas, insurance and registration money to paying down debt.

His debt isn't shrinking very fast, however, because most of his payments cover interest on credit card debt at 24.99, 26.99 and even 32.99(!) percent. To speed things up, I'm going to retire about � of his credit card debt (essentially jump-starting the process for him). He'll concentrate all of his debt reduction payments on the rest. Once he is done with that (in about five months), he'll start paying me back.

I'll make a few points more in interest than I did from my money-market efund account, admittedly with greater risk and less liquidity, and he'll shave between 12 and 18 months from his debt repayment.

Following SeattlePioneer's good advice, I wrote everything up as if it were a regular loan, with payment dates and amounts, interest rates, and had my friend sign it. I think setting it up formally made both my friend and I more comfortable with the whole arrangement.

As good as it makes me feel helping my friend out, however, I have to admit to a few twinges after writing the checks that will leave me with about $240 in my efund. I like the feeling of security that comes from having five-months' worth of expenses in reserve.

That was yesterday. Today, my boss poked his head in the door and told me to be sure to catch him this afternoon. "You really want to see me." Oh, great, I thought, another project that just has to be done before I leave for vacation! My thoughts must have shown on my face because he just grinned and said "Oh hell, just come here for a minute." I went to his office, closed the door, and he just grinned.

Turns out I'm get a raise (10%), and a 5k bonus! (Bonuses are very unusual for our organization, so it was completely unexpected.)

Woohoo! Instant efund!

--AF


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