- Let's Make It Clear - (part 2 of 2)
With a short night of sleep, Mary and Bob woke up on Saturday morning with minds that were in a fog. After a cup of strong black coffee, they decided to visit that ugly unwanted houseguest, their debt pile, once again as it stared at them from the kitchen table. After much discussing and cussing the two of them decided that they had three options. Option One was to try to increase the limits on the credit cards they currently had and see if their family members would loan them some money. Option Two was to look for second and third jobs to bring in more money. Option Three was to work at figuring out how to live on the amount of money they received from their paychecks each month.
After looking truthfully at Option One, Bob and Mary knew that going that route would lead them to bankruptcy. After looking hard at Option Two, Bob and Mary realized that even if they worked 24 hours a day they could not afford their current lifestyle, let alone pay off their debt. They decided to look for second jobs solely for the purpose of paying off past debt. With this decision, they realized that they needed to first modify their spending so that each month they would at least break even.
Bob and Mary decided to try to preserve a good reputation and work on Option Three. Because they still maintained their good credit rating they were able to move the balance from that really pretty card with their faces on the front, the one with the very high interest rate and annual fee, to another card with a lower interest rate. They cancelled the pretty card. Their new luxury cars had some equity in them so they sold them and paid cash for modest cars a few years older. They cancelled the family vacation planned for The Bahamas and lost the deposit they had paid. The daily stop for a $6.00 cup of coffee and the weekly $35.00 car wash ended. The travel mug they took from home and washing their own cars in their driveway on Sunday afternoons felt good. Although they missed the pleasure of eating out at their favorite restaurants several times a week, they chose to reserve that pleasure for special occasions.
Mary and Bob found that at the end of the fourth month they were able to pay all of their bills except two credit cards. A brief phone call to each credit card company allowed them a month's grace period with no damage to their credit. When they paid their bills at the end of month five, they had no money left, but all their bills were paid. Now the really difficult, hard and gut wrenching work began.
At a family meeting, Bob and Mary explained to their children how the past irresponsible behavior of their parents might have seemed fun but it was not reality. Reality was now biting them in the butt. They explained to Susie that the payments they had made for a portion of the college education she was finishing was from money they had borrowed and were now working at paying back. Susie was told that she was not obligated to pay her parents back for any of her educational costs because that was the agreement that they had made with her. However, Susie was informed that if she wished to keep the car she was driving, she would need to find a job and make the payments herself. Bill was told that he would need to work on weekends and during the summer for the next two years if he expected to have a car to drive when he turned sixteen. Alice was informed that if she wished to go to the college of her choice, she would need to work hard in school for the next seven years and earn a scholarship or she would be attending a local community college and live at home.
Needless to say, if the family members were polled immediately following the family meeting, Bob and Mary would receive the lowest approval ratings of their lives. However, if Bob and Mary continued with their commitment to Option Three and their family members were polled ten years later, they would receive the highest ratings possible for respect and their reputation with their neighbors would be at an all-time high.
The irresponsible financial behavior of our Federal Government and many of our citizens has created a major problem for everyone. How do you think we should handle our national federal deficit, Option One, Option Two or Option Three? If you chose Option Three, be prepared to sacrifice at some level and plan on having the will to be patient for a few years.
What do you think? Send me your comments.
* I have been receiving some great comments and want to thank all of you who have been contacting me.
" At the same time we must accept the fact that being born in one of the richest countries in the world does not guarantee you a spot in the middle class of our country."
[Nick Streza. PROGRESS IN AMERICA, Redefining The American Dream, (Tate Publishing 2011), page 185]blog comments powered by Disqus