Debt can be useful when leveraged properly. For most of us however, it has the potential to become a scary millstone. The work life impact? Choices
. Excessive debt removes our choices, burdens our mind and body and adversely affects our well being. Which is why I was intrigued to discover several months ago Adam Baker of Man Vs Debt
. His mantra: “Sell your crap. Pay off your debt. Do what you love.”
I have an interview with Adam coming up in the Work Life Stories series. As a segue way, here’s a little of my own experience. About 12 years ago, I was finishing up my Masters and suddenly moved back to Australia from the UK. I remember joking that if I ever got married my dowry would be a whole bunch of debt and a great photo album.
I’d accumulated a large sum of student debt, but at commercial lending rates (my Masters was in London and I was not eligible for student loans there) including some travel and consumer debt. I was blessed with a fiscally wise brother who helped me work out a strict budget. He and his room mates allowed me to move in to their place for very low rent, that same brother sold me an old bomber of a car that leaked in rain storms but got me from A to B, and he was my loan officer for the car until it was all paid back.
Critically, for the next three years I walked around with cash that had yellow stickies and paperclips on it, segmenting it into spending categories on a twice-monthly and weekly basis. I would withdraw cash each pay period and hide it in my house, divided and labeled, transferring budgeted amounts to my wallet weekly. When the cash ran out for food, no more food. I could not dip into another category to top up, because those amounts were also accurately pre-planned and the dollars needed to be preserved accordingly.
In the middle of it, I got married so between the two of us and some gratefully received parental air miles, we bought a ring, paid for a wedding and moved countries. Two salaries were then able to get us through the last stretch of debt, but most of it was taken care of before I got married.
Note to suspicious persons, I don’t do this anymore! Insane, right? But surprisingly liberating. I had to see the money to learn the lesson. The journey back from irresponsibility and ignorance was long, slow and hard. I’ve never lived without a budget since, although certainly I have experienced subsequent fiscal tests and not always passed them with flying colors.
Here’s what I continue to learn. Giving yourself boundaries actually gives you more control. This truth applies to time, to food, to exercise, to relationships (especially in parenting), to work and to money. That does not mean your boundaries look like my boundaries. That does not mean limiting ourselves to scarcity thinking and being in a state of lack. It means having a vision of where this is all headed, what we want, who we are and why we are doing what we do. Our money choices reflect that sense of mission as much as our time choices and our health choices.
What’s your money story? How has your relationship with money changed your work life equation? It is important to discuss money, especially in marriage, but also in the workplace, in a more honest and up-front way. There are so many taboos and risks in being more open on this issue. The topic is especially on my mind since a recent negotiation course I took. What are your thoughts? How do you stay true to your guiding principles when it comes to money?
This post is written in deep gratitude for the blessing of patience and support from my extended family and for their role in my on-going money management education.
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Photo credit: Money http://www.flickr.com/photos/dborman2/3258378233/