Our Debt Story Part V: Emotional & Mental Advice

Getting out of debt and having good money practices takes a lot of emotional and mental preparation.  By listening to TV, radio and Internet ads, we are constantly bombarded with financial myths, low-interest sales pitches, scarcity tactics, etc that are easy to buy into.  We did for years!

Some of the emotional and mental tips we’re sharing come from Dave Ramsey, while some of the other come from other financial blogs GRS and SimpleDollar we read or from our own learning.  This isn’t a comprehensive list, just a few of the ones that really made an impact for us.

• Live Like No One Else so You Can Live Like No One Else:  Tattoo this to your forehead or monogram it on your wallet.  Remember every bit that you don’t spend now is only saving up for the future.  I know the future doesn’t seem real because it’s so far away / unknown, but I love knowing that at the very least we’ll be able to function for 6 months of one of us looses our job or becomes unable to work. Every time I say “no” to a purchase I would picture the days when we’re debt free; and now I picture the days when we buy a house; and soon it’ll be Giving Like No One Else!!!!

• Do as rich people do:  For me (Elizabeth) this has been an underlying mantra.  Remember in my story how I took financial advice from someone to transfer my credit card balances at a 3% interest rate?  I later found out about the financial mess he was in.  Would you take wood shop safety from a guy missing a finger? Why take financial advice from someone who is broke?  Instead talk to “rich” people who have a solid financial plan!

• Don’t emotionally buy before you’ve made the purchase: Very early on in my (Elizabeth) financial turn around days, I bought in to the iPhone hype as it was everything I’d dreamed of in a phone.  I saved up my $300. Woke up early. Stood in line for 2 hours.  Had the second-to-last phone in my hand and the cashier said “That’ll be $500”.  Long story short, I didn’t qualify for the lowest advertised price.  Instead of saying “no” (because I really wanted that iPhone TODAY), I pulled out my VISA and put the balance on my credit card.  The whole walk to the car I knew what I’d done wrong but rationalized that I “needed” it because it could do everything from the palm of my hand....I almost felt too sick to use the phone.  Lesson learned:  Keep a level head when making purchases (of any size) and prepare yourself to walk away if it’s not exactly what you want and have saved up for!

• Brand loyalty or bargains:  I was a J.Crew shopper for both of Eric and I’s entire wardrobe.  I loved the brand. I loved the smell of the store. I even tore out pictures of outfits and hung them in my closet (oh, life before Pinterest).  However, this brand loyalty was killing my wallet and later had no place in our meager clothing budget.  You know what did fit in the budget?  Finding other stores to shop at, including utilizing our family’s employee discount + sales + coupons at Macy’s.  Sure it didn’t have a J.Crew tag, but given all our discounts most everything we buy there is cheaper than Target (and way better quality).  WIN!  I just had to look outside the box. (PS: I am still learning to like stores like Ross, TJ Maxx, etc - but these are great too! So are consignment shops, garage sales, etc) 

• Get in the mindset that “debt is bad” - We both used to think that having student loans, car payments, and a mortgage were okay because everyone (it seemed) had them. After running the math and realizing what having a lower cash flow does to your options, we started to think of debt as a nasty, grubby thing that we didn’t want around. Bu-bye.

• Squeeeezing vs creating a budget we knew we’d stick with -  I (Elizabeth) have been on really strict diets that last all of two-three weeks.  I slip up one time and I feel so overwhelmed with failure that I can’t even try again.  Knowing about my perfectionism/self-control battle, we created a budget that was a little fluid and forgiving.  This allows for the occasional mistake, impulse buy, or over spend at the store without sending us in a downward spiral or giving up all together.  More on this in our next post...

• If it’s too good to be true, it probably is:  About 8-10 months ago, Eric found a really amazing credit card offer (that alone should have been the red flag).  It was offering like ten trillion Sky Miles for spending like $2 or something.  We thought this deal is too good to be true.  After scanning the fine print, though, we almost bought in that it WAS a good deal and even considered signing up.  But knowing the “too good to be true” rule, Eric sent the fine print to his sister, an auditing accountant, and she highlighted some tricky wording and wrote back saying “It is too good to be true”.  Same rule goes for most sales pitches.  Be veeeerrryyyy careful.  Read the fine print.  Ask questions.

• Getting rid of the consumer mindset - By being content with what we have and not focusing on the newest tech gadget, upgraded bike part, or the newer slightly better camera lens we save tons of money by not spending on wants.  One thing that helped us do this was reducing our exposure to ads by eliminating cable and magazine subscriptions, as well as unsubscribing from e-mail marketing.  It helps identify what you want, not what the advertisers tell you to want, so I view this as a win-win since all the money we spend actually makes us think about us.

• Learning to wait and save vs impulse buying - Eric almost got caught in with this on a video game (Starcraft II).  He was going to have to buy a new computer (which we were considering anyway) and spend $60 for the game.  After talking about when he was going to play it and reminding himself of his other games that remain unbeaten, he decided not to.  He was able to do that by putting it in the back of his mind temporarily and reevaluating at a later date when he wasn’t caught up in the nostalgic emotions of Starcraft.  We may still get Starcraft II, but it will be after we get another computer not just for gaming reasons and when the price of the game has fallen to $10 like Starcraft I has.  He will get the same enjoyment out of it then that he would have if he had bought it as an impulse for a fraction of the cost.  Note: We’ve found half the time we wait and save that we end up spending the money on something else because we didn’t really need that item anyway.  Or if we do purchase, that item becomes treasured because we worked hard to buy it.
• Ask what you have to pay, not what you’re “saving”: After doing a bit of preliminary research we learned that AT&T would be the best Internet provider for our area and our needs. Eric and I found a time that we could both go to the store to talk to the sale employee.  We mentioned the ads we saw on-line for the price we wanted.  The salesperson wanted nothing to do with us naming that price but instead spent TWO HOURS talking AT us about all the bundles, packages, and upgrades we could have and how much money it would save us a month.  Finally, Eric was able to get a word in and asked, “ma’am, if we purchase that package, how much will we be spending each month”  And she looked at us blankly and replied, “No one has ever asked me that question.  I need to find a calculator”  At the end of it all, turns out the best deal she could offer us was the one we came in looking for. Funny.

• Abundance vs scarcity mentality - One of the things that helped Eric was to realize that there is not a shortage of things we need.  As an example, we just sold our kayaks, which we really enjoyed.  One of the reasons we were able to part with them was because we know that when we have the time to kayak again, we will be able to buy kayaks, because there is an abundance of kayaks.  If kayaks were scarce would have been much more hesitant to get rid of them, knowing how hard it would be to get them again.   Because we view these items as abundant, we can keep a small apartment and save money.
• We can't mention it enough - Praying for the strength and courage to fight these battles, as well as sharing the vision with each other has helped more that any other piece of advice. At the end of the day, coming home and sharing our struggles or triumph has been the most rewarding and has brought us closer together.

We have one last post on our practical tips of navigating life's choices and temptations. We hope to incorporate answers to your great questions as well!

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