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April Newsletter: Stop the Anguish of Debt
April 17, 2013
Hello to all my frugal friends:

Okay, this is three months in a row with a newsletter. I can hardly believe it. I must be getting my act together. Well, it's about time!

As I sit in the middle of a huge snow storm here in Cheyenne, and wish I was still fishing in Texas, I think about others in a storm of their own...crushing debt. Usually, it's of our own making, and that makes it all the more undesirable. I think it's long since been time to get rid of that ball and chain, so that's what this month's featured article is about

When I was in debt, it was a sickening feeling. The word "anguish" just started to describe it. Instead of agonizing over it, I put a plan together and worked the plan to completion. It was like another project for me, but the stakes were much higher...I had to get back on my financial feet. So, I'm hoping to give some general guidance about that this month in the featured article. At another time I'll share my story in detail so you'll have some insight about what specific steps I took to resolve my own quagmire of debt.

As you have seen before, the format is:

1) a little about the site

2) a little money talk

3) this month's featured article

Let's dive in...

Site Highlights

Being a frugal individual suggests that I make do with what I have instead of going out to buy something, especially something new at retail prices. I'm a big fan of garage sales, auctions and using services like FreeCycle to obtain things free of cost or at greatly reduced cost. I'm also big on making things myself.

Since we enjoy watching movies at home, I collect video racks whenever I engage in garage sale shopping on the weekends during the summer. It's easy to find just about anything at a reasonable price at a garage sale. Here's how I made a tall DVD rack out of two shorter ones. My interest was to take up less floor space and still make use of the two racks that I had obtained for $2 each, and I did just that.

For another do-it-yourself project, I created a large drop box that sits at the top of our drive. It accepts multiple packages and large packages, and thereby allows us to be away from home for a while and still get deliveries. Most importantly, it obviates delivery vehicles coming down our drive when it's muddy or covered in deep snow. Once a UPS driver almost didn't make it back up the drive because of the mud. Now, the potential for that problem is all but eliminated. Plus, we have more privacy if delivery vehicle turn around 300 feet from the house instead of 30 feet away.

Now, on to current events...

Money Talk - How Large an Emergency Fund?

Emergency funds are usually what people create as part of their planning efforts for getting out of debt. I understand, in the event of the unforeseen, it's nice to have something to fall back on. There are many who advocate $1,000 as an emergency fund. I think it's a great beginning, but in my mind, $1,000 is just a starting point.

Think about many days in a hotel and renting a car and eating out will $1,000 provide for you (and your family)? When I traveled as part of my business, it wasn't any trouble at all spending $1,400 to $1,800 for travel and living expenses for a one week trip, even when I was trying my best to minimize expenses.

In my mind, $1,000 just doesn't provide you with many options. As I like to say, money gives you options...more money, more options. So, I would encourage you to think about having a more substantial emergency fund, perhaps $5,000 or even much more.

A few years ago I had a chance to sit down with a financial adviser while he was counseling one of his elderly clients about how much they might want to keep on hand, in the bank, in the event of emergencies. Silently, I thought to myself, as a ballpark figure, he might suggest $25,000 to $50,000. His suggestion matched my guess well enough, he simply said, "I'd keep $50,000 minimum."

To most of us, that seems like a lot of money, and it is, but for an elderly person who might need to have most things done for them, this isn't such a large pile of cash. As the adviser explained, "What if you need a new roof or a new car?" When I think of the $45,000 price tag on a new pickup truck, or the $75,000 price tag on a luxury SUV, or the $25,000 bid for a roof on my house, I can imagine how a natural disaster causing damage to home and vehicle might deplete $50,000 in a relatively short time.

I've said all of this to get you thinking about your emergency fund. If you had a major home repair, an unforeseen medical expense, or you had to replace your vehicle, would you have enough on hand to do that? Or, would you have to go into debt to recover?

If you don't have an emergency fund, you should start one. If yours is modest, you might consider bumping it up a bit. Think about the following:

  • homeowner insurance deductible
  • major car repair or replacement
  • medical insurance deductible
  • major home or vehicle maintenance
  • loss or reduction of income
  • car insurance deductible

The amount of readily available cash you keep on hand -- preferably in the bank -- is up to you, and largely depends on your circumstances. You might even be comfortable going without an emergency fund altogether. The only truth of the matter is one size does not fit all.

Featured Article

Thomas Jefferson suggested, "Never spend your money before you have earned it." No doubt he was a wise individual with much to say about the human condition, especially as it relates to affairs of the state. Sadly, many of the old sayings from the past are readily dismissed, and we suffer because of it. Instead of learning from history and the wisdom of others, we choose to repeat it.

Our friend Mr. Jefferson also reminded us of how to regain peace of mind when we have a problem to solve, perhaps a problem like debt. He advised that there is no use agonizing over it, instead, we need to get busy fixing it. Occupying our mind with activity to solve our problem often alleviates our worries about it. I would largely agree, provided there is a good plan to follow, and he would agree as well. After all, he said, "Delay is preferable to error."

With that as an introduction, here's the featured article for this month.

Alleviate The Anguish Of Debt – Commit Yourself To A Frugal Lifestyle

by Clair A. Schwan

If you’re in need of help with your debt, you’ll likely need help with your approach to everyday living as well. Debt doesn’t sneak up on us and capture us one day. It slowly creeps into our lives because we allow it to happen. Quite often our lifestyle has encouraged it, condoned it and promoted it. We are to blame.

Getting ourselves out of debt would appear to be the first and foremost concern. It is, but it can’t be our only focus. We also have to change the course of our life so we don’t get back into trouble with debt. We need a change in lifestyle so our debt solutions will be effective, and debt will no longer be a recurring threat.

I’m talking about making a commitment to a frugal lifestyle where you live with a clear understanding of the value of money, and you make your hard earned income provide a comfortable and secure life. I’m talking about a change in course for the rest of your life that will help provide you with peace of mind.

If you’re not willing to make changes, then expect debt to creep back into your life and rob you of the freedom that you deserve when it comes to personal finances. Make no mistake, debt is a form of enslavement, and there are plenty of people whose aim it is to get you financially enslaved.

It seems only fair with all the individuals out there hoping to financially enslave you that you would do everything in your power to stay out of the snare. The days of indentured servants, share croppers and slaves in chain are long gone. There is no sense bringing them back again on such a personal level, even without the iron chains.

In order to change your lifestyle, you’ll need to start associating with people who:

• understand the value of money

• know the rules of “the money game” and play it well

• are satisfied with simply meeting their needs

• know how to plan for and achieve what they want

• have attained success and are debt-free

To the extent that your association with financially successful individuals allows the “shine” of others to rub off, you’ll be pointed in a better direction. You’ll soon have better skills to keep you on track to renewed financial prowess and peace of mind. It’s more than simply doing something different; it’s changing your mindset to support better planning and decision-making that’s in your best interest.

Having money and being a good money manager provides us with tremendous advantages in our society. If we want to enjoy the advantages and convenience of having money and being able to pay for things with a credit card, then we need to get a handle on our personal finances and stay in control of debt. The alternative is it bosses us around.

My personal slogan is "debt be damned" and I'll be damned if I'm going to allow debt to ever overtake me again. Been there, done that, not ever doing that again.

If you have a similar attitude, then start hanging around with the "eagles" of personal finance and ditch the "turkeys" in your life. Finding a good example to follow and a mentor to work with can make all the difference in the world. Often, it's a great way to introduce yourself to a different lifestyle, one with greater potential for financial success.

Wrapping it Up

This month we looked at do-it-yourself projects and emergency funds and generally how to address debt looming overhead. I suppose if you want things done right, you have to do them yourself. Often that's the case simply because it's in no one else's best interest to do it for you. In my mind, being adept at frugal living is all part of living a more self-reliant life.

Thanks for being along for the ride here at Frugal Living Freedom, and I hope your adventures in frugal living are going along as you'd like them to.

I wish you all the best,


P.S. If you are receiving this in text format, the links to the new pages might not be complete. You'll have to copy and paste the link into your browser in order for it to take you to the correct page.

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