Fall 2005
I once delivered an 11-pound baby. How can a body that has withstood such trauma regain some of the vim and vigor it had before it birthed a baby whale? Well, the answer was simple but not easy: Diet and exercise.
Yuck. Double Yuck.
Getting out of debt also may sound simple, but it sure isn't easy: You must spend less and save more.
Just as excess weight leads to health and emotional concerns, so debt has its consequences as well:
- Debt makes you a servant to the lender.
- Debt borrows from your future.
- Debt erodes resources through high interest payments.
- Debt promotes impulse buying.
- Debt hinders sharing with others.
- Debt makes you ugly. Well, this is just my personal opinion!
On the other hand, those with a light debt load enjoy many benefits. A household with little debt experiences fewer arguments about money. You can answer your phone and not worry about screening calls from creditors. You won't need to float the bills to make minimum payments. As a servicemember, you won't run the risk of military-related consequences from a high debt load, such as mandatory counseling, disciplinary action and possibly even a less-than-honorable discharge.
Do you really have a debt problem? If you're not sure, then it's time to step on the scale to determine whether you need to go on a debt diet. Here are some likely indicators that you need to get in shape financially:
- Using credit card cash advances to pay for living expenses
- Using and depending on overtime to meet the month's expenses
- Using credit to buy things you used to pay for in cash (such as groceries, gasoline, clothing)
- Using the overdraft protection plan on your checking account to pay monthly bills
- Using savings to pay bills
- Using one credit card to pay another
- Delaying one bill (or "floating") to pay another overdue bill
- Paying only the minimum amount due on charge accounts
If you want a quick start to fixing your debt problem, try the one-hour money-burn workout. This exercise is a combination of a brainstorming session and a motivating exercise. The key is to keep the conversation and the activity moving along.
Make Up Your Mind Warm-up (five minutes). My husband, Bob, and I have experienced the incredible miracle of being freed from $40,000 in consumer debt. We committed ourselves to the goal of getting out of debt and made lifestyle changes to accomplish this. Within two years, we were debt free! We made up our minds and found the strength we needed to make that decision and stick with it.
Family Meeting Strength Training (10 minutes). It usually takes more than one person to get a family into serious debt. Even if one person does most of the spending, the other spouse usually tolerates the destructive behavior in some way. Call a family meeting to write debt diet goals on paper, producing a tangible standard that everyone understands and will work toward. The goals you set should include: 1) how to stop spending more than you make, 2) how to pay the interest on the debt you have accumulated and; 3) how to retire the debt.
Budget Burn (20 minutes). Many people with debt problems have never established a household budget or they don't stick to it. Now is the time to establish a budget or tweak your existing one to help you meet your financial goals. The Kiplinger website offers a workable budget plan.
Take Your Heart Rate (20 minutes). This is the point where you obtain credit and debt information to help you decide if you need to go to your post's professional financial counselor. You may want to order a copy of your credit reports from the major credit-reporting bureaus (Equifax, Experian and TransUnion). Thanks to new federal legislation, all Americans are entitled to a free credit report in a 12-month period from each of the three bureaus. Call toll free 1-877-322-8228 or go to AnnualCreditReport.com.
Cool Down and Feel Good (five minutes). Sit back, grab a glass of something cool to drink and reflect on all you've accomplished in just one hour!
Consider this a quick start that you can build on in the weeks to come. Keep in mind that building your fiscal fitness is a long-term commitment!
# # #
Ellie Kay is an author of eight books, a national radio commentator and a motivational speaker at military events. Her newest books are "Debt Diet" (Bethany House Publishers, 2005) and "Kisses of Sunshine for Moms" (Zondervan, 2005). She is the wife of a fighter pilot and mother of seven children. To receive Ellie's free newsletter or invite her to speak at your military base, go to EllieKay.com.