Debt-Free Forever (13 page)

Successful people often have a mentor who sees their potential and offers to guide them through the political and corporate quagmire so they can move from one level to the next within an organization. You’re looking for a Yoda to your Luke Skywalker.

Your employer, your university or college, or an organization with which you or your family is associated may have a formal mentoring program in place that you can take advantage of. Or you may be able to identify someone you admire and respect at work, or through your personal connections, who could help you grow.

You’re looking for someone to help you assess your strengths and weaknesses. Ultimately you want to develop skills for success as well as create a long-range career plan. You need someone with whom you can work through career and workplace
problems, someone who can provide a fresh perspective, someone who helps you make decisions more by suggesting alternatives rather than telling you what to do.

If you take a job with an employer, and stay with that employer forever, you may not maximize your income potential simply because you’re taken for granted. If you’re in a rut, it may be time to look around. Most people earn more money when they change jobs. The key is to present yourself to a new employer in a way that will not only get you the job, but get you more money. From your cover letter to your resumé, from your interview to your follow-up, you need to send a strong positive message. You’re the product. But you’re also the marketing department and the salesperson. If you’re no good at either of those roles, get help.

And for heaven’s sake,
don’t quit your job before you get another one.
I don’t care how ticked off you are. People like to hire people who are already working. So if you’re in a job you hate, make a plan for getting out, but don’t just up and quit.

You don’t have to be a lawyer or a doctor or a teacher. There are as many different jobs as there are kinds of people. Good mechanics are hard to find. So are good plumbers, electricians, and painters.
Being good at what you do
is far more important than
what
you do.

I’m a good writer. There are hundreds of people who purport to be writers, and there are dozens of editors who know
differently. When I write a story for a magazine, there are very few changes needed. I figure out what my editors want and then I give it to them. So easy. Other people spend loads more time writing only to have the story returned with gobs of edits and hours of work attached. Doing something and doing something well are completely different things. If you’re really good at what you do, after paying your dues you can pretty well rule the world.

Don’t get caught up in what other people think you should do for a living. You have to decide what will make you happy. Since you’re going to spend between 8 and 12 hours a day doing it, you should like it at least a little.

When I was married to Husband #2, I got to see how a career choice can truly screw up a person. He was a dentist. His mother wanted him to have a profession so he would be his own boss. He followed her dreams and went into dentistry. And he was a damn fine dentist. But he was miserable. Did you know that dentists have one of the highest suicide rates going? Me neither. But I saw the stress first-hand.

Every Sunday night, while he slept he would scratch at his face. We tried putting socks over his hands, trimming his nails as short as possible, all sorts of stuff. He kept scratching. Ultimately the pressure got to him and he developed through-the-roof high blood pressure.

I can’t believe the money was worth it.

Some people have jobs that have no future. If you work retail and know you’ll never be a store manager, buyer, or corporate
executive, you may feel there’s nowhere to go. If you’re a server who barely puts together enough money every month to keep a roof over your head, you may believe you have no options. That’s sad. If you have no options, you’re doomed to the life you’re currently living. If you can’t find a way to increase your skills, maybe you can turn something you love to do into more money.

Exceptional people turn ordinary situations into phenomenal opportunities. Mrs. Fields baked her way to becoming a cookie maven. Mrs. B—who has a candy store in my small town—found a way to make money making candy. It’s a matter of seeing an opportunity and then busting your butt to turn that opportunity into a money-making proposition.

People who are passionate about personal fitness become fitness instructors or personal trainers. People who are passionate about gardening learn to landscape. People who are passionate about design, cooking, photography, sewing, animals can all find a way to turn what they love into an employment opportunity or business.

Think about it for a minute. Could you offer a service related to your expertise? If you like to write, you could help people with business plans, brochures, or by ghostwriting articles. Or you could start a blog and build your traffic until you were generating enough views that advertisers would want to be on your site. Could you use your programming skills to create a software program or a game? Could you build a website with collections of e-photos? Are you a craftsperson? Could you build furniture, fix small engines, or do household repairs? Could you become a personal shopper? A driver? A
companion for shut-ins? How about baby-proofing homes for new parents, teaching music, custom-making greeting cards? The options are endless. The only limits: your imagination, your willingness to work hard, and guts.

You may not end up making a million dollars from your hobby, as many a website is apt to promise, but you may not need a million dollars. If your budget is short $300, $500, or even $1,000 a month, could you generate that much consistently with your “hobby”? If so, then turn what you love into a way to supplement your cash flow and you may find that over time, more and more of your income comes from following your bliss.

All my life I’ve been told I’m a lucky girl. Things just seem to fall in my lap. I have been lucky. But I’m not sure that luck has been the major player in my life, since some of my “luck” took a lot of hard work.

I started life as legal secretary, and a pretty crappy secretary at that. I just wasn’t cut out for that job. So I got fired, over and over. Then I switched to being a word-processing operator (yes, I’m that old!). My first big career move was joining a young consulting company that needed someone to process the manuals it was using for its training programs. I was hired for two reasons: I had great legs (luck), and I said in the interview that I’d take the manual home and be ready for work on Monday (hard work). They liked my legs and my chutzpah.

I worked for that consulting company for four years, learning and growing, internalizing all the crap they were teaching corporate clients for a bazillion dollars a pop. My education
was free. I eventually went into sales because they wouldn’t pay me any more money if I didn’t (luck).

When I started in sales, I had to make cold calls. You’d call up some stranger and try to get their agreement to meet with you so you could sell them something. I hated making cold calls. I hated making cold calls so much that every morning for a year I would toss my cookies before I went to work (hard work).

I set myself the goal of making 25 cold calls a day. And I did it (hard work). Over time, it got easier to make the calls. Having been rejected 2,878 times, the next rejection rolled off me like water off a duck’s back. And when a body said yes to a meeting, I was elated.

I became pretty successful at selling. I learned to handle the objections shot my way deftly and with grace. I learned to take rejection in stride. But mostly I learned to feel the fear and do it anyway. I didn’t stop until I’d make those 25 calls each day. And I became happier and happier in sales as I realized just what I could accomplish.

Eventually, I started writing the training programs I was selling. I went from making $27,000 as a secretary to making $50,000 in sales and consulting (luck and hard work). And there was no looking back. I started a small business with a partner, and we worked together for about five years.

Then I worked on my own. And I worked hard. During one consulting project for a major bank (luck?), I worked 17 hours a day, 7 days a week, for about 7 months (hard, hard work). I dropped two dress sizes just before my wedding and my client laughed and said, “Hey, we’re not charging you for the weight-loss program!”

When I had my kids I knew I couldn’t do the 7 to 7 schedule anymore because my kids needed me, so I said buh-bye to my consulting career and found another way. I became a freelance writer, penning up to 27 columns a month (luck). I’d get up at 4 a.m. to write (hard work). I did that for 10 years.

I took two years off while my husband picked up the slack (luck). I was burned out big-time. And then the email came asking whether I wanted to host
Til Debt Do Us Part
(more luck).

In between it all, I found time to start a financial magazine for women, write 10 books about money, host a call-in show on a regional TV station, and do hundreds of media appearances (really hard work).

I could never have predicted where life was going to take me. Waiting until I was 34 to have my first child meant my career path changed substantially as I had to cope with being self-employed and being a mother. And when I went back to work after my self-imposed hiatus, I moved on to a career path I could never have predicted. I’ve come a long way from being a legal secretary. And it’s mostly because I’ve been open to new things, and willing to puke my brains out and work my nuts off.

Once you’re making enough money to live, work can be about a whole bunch of other things: doing things you love, making friends, making a difference, achieving success, pleasing your clients, feeling important, creating something new, satisfying a desire, making other people feel safe—there are a million
reasons why people do the work they do. These are the things you can focus on, once your most basic needs for food and a roof are met.

If you’re not making enough money, today’s the day you sit down and create a plan for making more money. Set a goal, whydontcha?

O
nce upon a time, there were no cell phones, prepared meals didn’t exist, and coffee was something we brewed at home. Eating out was for special occasions. Nails were something we grew and food never had the word
junk
in front of it.

Now people spend money on energy drinks, buy 62 different versions of cleaning products (whatever happened to a mop and bucket?), and wouldn’t dream of not buying lottery tickets because if their numbers came up they’d be mad as heck! Folks throw huge weddings, going thousands of dollars into debt for one night of fun and frolic. Parents throw ridiculous birthday parties for kids, inviting whole classes so no one will be offended. Guys and dolls spend buckets of money trying to look youthful, to lose weight, to be healthy. And just about everyone believes that if the deal is good enough, it justifies spending money they haven’t yet earned.

Most of the people I have worked with have had a problem
with impulse spending. Do you? If you walk into a shoe store and see a pair of shoes you like, do you buy them? If you are grocery shopping, and the smell of the bakery wafts in your direction, do you fill your cart with yummy goodies? I’ve even met people who have bought a car on impulse because “they looked good in it.” You’ve got to be kidding me!

Putting away your credit cards, working with the Magic Jars, and writing down everything you spend will go a long way to making you change your spending patterns because it’ll make you aware of what you’re doing with your money. No awareness—shopping unconsciously—means the Impulse Gremlin can ride around on your back whispering sweet nothings in your ears.

If you let the Impulse Gremlin live on your back, nothing much is going to change in your life. You’ll always be responding to the Gremlin’s whispers. You’ll never have a cent saved. And your debt will continue to grow. But if you’re determined that you are no longer going to be at the beck and call of a Great Sale, the Last Day, or the Best Price, there are some steps you can take to help yourself. The place to start is to understand just what your Shopping Gremlin looks like and how it is leading you down the wrong path.

Shopping is easy; stopping isn’t! If you are responsible for keeping your house beautiful, keeping your children beautiful, keeping your partner beautiful, you’re probably always shopping. You may love a good bargain. Maybe you’ve made a habit of hitting the Everything’s 60% Off Everyday Store every
chance you get. I’ll bet not a day goes by in which you don’t buy something: food, clothes, stuff for the kids, a pack of gum, a magazine—your job is to shop and you’re damn good at it.

Problem is, the “I’m the Shopper” Gremlin has no clue about the difference between a
need
and a
want.
It just wants to SHOP. And so, with this Gremlin whispering soothing messages of love, caring, and responsibility in your ear, you keep shopping.

The first thing you have to come to terms with is the difference between a need and a want. Needs are the things you must have to keep on keeping on. You must keep a roof over your head, so basic accommodation is a need. Having a six-bedroom, four-bathroom home with hardwood floors and cathedral ceilings is a want. Basic sustenance is a need. Lobster, shrimp, and filet mignon are wants. So are beer, wine, and cigarettes. (I don’t care if you’re addicted, it’s a want.) A snowsuit for Baby Jane is a need. Anything beyond your fourth pair of shoes is a want. Health coverage, insurance, and the ability to get to and from work are all needs. Vacations, big-screen televisions, and nicer cars are all wants.

If you’ve got the “I’m the Shopper” Gremlin running rampant through your life, then you have to build in some structure so that you stop shopping unconsciously. Some people decide they will only shop one day of the week since it removes the temptation of the impulse buy. Some people decide to shop with a list and buy only what’s on the list. If they see something they want, they add it to their next list. Some people declare a moratorium on shopping, deciding to participate in
shop-free days two, three, or four days of the week. They don’t buy
anything
on those days. Then there are the folks who challenge themselves to see how long they can go without buying anything. (Gas and food are the usual exceptions since they are virtually always needs.) If they do shop, they have to start their count again, and they’re always trying to beat their best no-shopping streak.

In our very consumer-focused, advertisement-driven, marketing-moulded world, “better” has come to mean “more.” People think that their lives will be better if they can just figure out how to have more stuff. They have been listening to the “Having More Means a Better Life” Gremlin.

Ya know what? More stuff doesn’t make you happier. Nope. In fact, I’ve seen an inverse relationship. It seems the more unhappy you are, the more stuff you need, as if shopping is the balm that soothes your sense of what is missing.

If more made you happy, then lottery winners, people who inherited, and people with the highest incomes would be the happiest in our land. Not so. Studies have shown that those who suddenly come into “more” are often worse off five years later.

So why then do we have an obsession with accumulating more stuff? Why the drive to have the latest cell phone, the newest fashions, the shiniest car? It may simply be that we’ve stopped measuring the richness of our lives by the things we take for granted, that other people would die for: clean air, an abundance of water, healthy food, good health, the availability
of education, meaningful work, and freedom of religion and speech, to name just the most obvious. We have substituted consumerism for what people really want: love and community, a sense of belonging, worthwhile effort, happiness. The work of overcoming our rampant consumer addiction can only be done inside ourselves. Nobody else can fix this for us. We need, individually, to fix it for ourselves.

How? One approach is to move from being Impulsive to Thoughtful. Stop choosing short-term gratification over long-term benefits. Saving for retirement might be boring, but it’s going to be really important when you finally stop working.

You can apply any of a hundred rationalizations to why you need to drive a certain kind of car, acquire a bigger house, or wear brand-name clothing. It isn’t about meeting needs. It’s about the “Having More Means a Better Life” Gremlin weaving its intoxicating spell.

If you’ve got the “Having More Means a Better Life” Gremlin on your back, keep a small notebook handy and every time you get an urge to shop, practical or not, write it down. Note where you were, what you wanted to buy or did buy, and how you felt. Note every time the “Having More Means a Better Life” Gremlin squawks at a prize, whether it grabs you online, at a store, or when you’re flipping through a flyer. No matter how often it chatters in your ear, make a note of it. And whether you buy the item or not, keep track of the Gremlin. Once you know what your weakest areas are, you can take steps to inoculate yourself against this Gremlin. Avoid the mall, the discount department store, the dollar store—anywhere the Gremlin exerts its power over you.

This Gremlin is, perhaps, the hardest of the spending monsters to combat. Having slaved away in the mines all day, you feel entitled to a pint with the boys, that spiffy new hat, or dinner out. You need a glass of wine to relax. You need a vacation. You need a new “whatever is hot right now.”

If you’re walking around with the “I Work Hard So I Deserve It” Gremlin in tow, you’re willing to exchange your future income (that’s what credit is) for stuff you think you
deserve
to have. I’ve had people tell me, “We work really hard, we deserve a vacation.” I’ve heard people say, “I have a great job, I deserve to drive a nice car.” And I’ve had folks inform me, “I do 12-hour shifts, I deserve dinner out.”

Hey, for all the people who want to drop $400 on the latest cell phone who have the money in the bank, I don’t have a thing to say to you. It’s your money; spend it any way you wish. But for the dopes who are planning to put that new phone on credit and then carry the balance around for a few years at some ridiculous interest rate (any interest rate), give your heads a shake.

The thing about this Gremlin is that it can trick you into pledging many years of future income for the pleasures you’re seeking today. It doesn’t care how much interest you’re going to have to pay, how much more expensive that “have to have” item will be when you tack on the interest, or how long it’ll take you to get out of debt. And it doesn’t care what else you may end up losing if your circumstances change and you find you can’t pay for that holiday you deserved.

Nowhere has the “I Work Hard So I Deserve It” Gremlin done more damage than in the arena of home ownership.
We have come to believe we deserve to own our own homes. Never mind that we haven’t had the commitment, the discipline, or the foresight to save a down payment. Lenders have played into this delusion by offering borrowers far more credit than they should have access to. So people have bought homes they can barely afford. Foreclosure and disappointment follow.

The only people in this world who are entitled are children. When you make the decision to have a child, you’re also making the decision to put what you want behind what your child needs. Children are entitled to feel secure, to have enough food to eat, and a safe place to live. Not all children get the things to which they are entitled, sadly. But parents who put their own wants before their children’s needs are selfish and irresponsible. How can having a fifty-inch plasma TV be more important than the pain in your children’s eyes as they watch their home being repossessed? How can a shiny truck be more important than fresh fruit and veggies for your kids? How can a fancy handbag be more important than ensuring you have enough money to keep a roof over your child’s head if the worst happens?

If you don’t have an emergency fund and some savings, if you’re carrying around a pile of consumer debt, if your expenses exceed your income and you’re covering the difference with credit, it’s time to grow up.
You are not entitled to anything for which you cannot afford to pay.

Dealing with the “I Work Hard So I Deserve It” Gremlin requires bringing to mind the reality of your financial circumstances so that you don’t rationalize spending money you can’t afford to spend. Consider making a credit card condom
or a debit dinger (Australian for condom) with a pertinent message. An envelope into which your credit or debit card sits snugly, the credit card condom helps to protect you from going further into debt. The cover should convey a reminder to yourself. Here are some examples:

• Do you have the money to pay this purchase off in full when the bill comes in?

• You already owe $2,500 on this card.

• Is this a need or a want?

The credit card condom will work best if you come up with a message that makes you stop and think, so create a message that will remind you of your goals.

• You’re trying to save $3,400 for that fabulous vacation. Will buying this [whatever] get you closer to that goal?

• You’re setting up an emergency fund. You can spend this money now or you can use it to meet your goals of having $500 in the bank! What’s it gonna be?

• You want to be debt-free in nine months. Is buying this going to help?

If you need more of a reminder than words provide, create a credit card condom with a picture of whatever it is you’re trying to achieve: a picture of a beautiful house if you’re saving for a down payment, a picture of a gorgeous beach if you’re setting aside money for a vacation, a picture of your son or daughter if you’re trying to build a school fund.

Becoming aware of your Impulse Gremlin lessens the likelihood you’ll give in to the temptations to spend you’ll face every day. Becoming conscious in your spending requires that you use some strategies to keep you focused on what you really want. Here are my top 10 strategies for becoming a conscious shopper.

Planned spending is an intentional approach to spending money. It is what most people never do. It puts
intention
in spending because it takes
reaction
out. It requires foresight and a system. It is the antithesis of the Impulse Gremlin and the first Strategy in shopping consciously.

If I’ve just bought a new house and I know I’m going to have to replace the roof in three years, I plan my spending on the roof. I open up a Roof Account and every month I have $140 debited from my regular transaction account and credited to my Roof Account. When the time comes to replace the roof, I’ll be ready. That’s planned spending. I’m going to spend the money and I have a plan.

Planned spending is what you do so that you don’t have to use credit. Tons of stuff falls into this category. From home maintenance to the seasonal clothing you have to buy for the kids, from vacations to that new TV you’ve been eyeing, if you have to accumulate money so you can make a purchase, it’s planned spending.

The single best way to move from reactive spending to planned spending is to use a shopping list.

Grocery shopping is one area where people often overspend unconsciously. In the name of “feeding our family” (said in a serious and very deep voice), we toss stuff in our shopping carts without giving it a second thought. We buy cherries offseason for $10 a kilo. We buy mangos, star fruit, and avocados in the depths of winter. We buy organic. And we pay a pretty penny for all these choices.

How much of what you buy is purchased on impulse? Boy, those hothouse tomatoes smell great, don’t they? If you don’t shop with a list, you’re leaving yourself susceptible to all the contrivances retailers have come up with to separate you from your money. Become conscious of what you’re buying and you can cut your grocery bill by 30%. If you’re currently averaging $1,200 a month, that’ll save you more than $4,300 a year.