XJW's And The Debt Factor

hillary_step

Hello,

A common feature many of us suffer from after exiting from the WTS is that we are often left submerged in a morass of financial problems.

The 'live for today' attitude induced in us by the WTS is certainly no help in building wealth, so few of us leave the WTS without some damage happening to us financially. In my own case it was a business partner who cleared out the business accounts when I was an overseas trip, no doubt justifying his fraud as I was now not attending meetings. That is a story for another day!

A period of depression which is common after discovering the realities about the WTS often leaves us unable to concentrate on work, with the resulting effects in our paypacket. Marriages break up straining income, business partnerships fail due to the 'shunning' farce. The effects can be devastating on our finances as well as our emotions.

I am fortunate in always having been able to avoid large debts, but I have most certainly been hurt by the 'live for today' mentality that was viewed as indication of a strong faith to a JW, and have also met numerous XJW's who are trying to live with crippling debt.

This thread will, I hope, help those currently in debt to find a way out of your misery and to gain control of your lives rather than having it control you. Do not be afraid to face your debts, and though easy to say, remember that anxiety will not remove one penny of debt, in fact it could well add to it. Be positive and be strong - take control.

So here is the plan, explained to me a number of years ago by a day-trader I know who lost everything he had :

1) Write down a list of your debts, credit cards, store cards, etc. Write this in order, from smallest to largest debt, with the largest at the *bottom* of the list. Be honest with yourself. Do not minimize the debts, write down absolutely every debt.

It may shock you at first to realize just how much you owe, but after the initial shock you will be glad of this honest appraisal.

Forget a vacation this year, and maybe even next year. Forget new clothes, new cars, or anything that you can live without, just for a few months.

2) Develop a *yearly* not monthly view of your financial budget. For example do not say, I spent $10.00 on coffee this week, take a yearly view. $520 per year for coffee is a lot of money, drinking half these cups at home can save you $260.00, leaving you with $260.00 to pay down on one of your debts. I think you get the idea.

3) Pay all the minimums on your credit cards and save as quickly as you can $1000. This is your emergency fund.

4) Add to your income by working an extra eight hours a week. Make this a Saturday if you can. You may be an IT manager, but can you paint a wall? It is amazing how many people are looking for the services - painters, gutter cleaners, yes, window cleaners, book-keeper etc. etc. Ebay is an ideal enivironment for you to scour the thrift shops and sell what you find for a little extra cash. Put away your pride. There is dignity in all work, and you owe people money, you have no room at the moment for personal pride. Your aim is to try to earn an extra $100-120 per week.

5) Start paying down you credit cards this way : Pay only the minimums except for the smallest of the debts. Do not worry about interest rates, worry about paying the smallest debt *first*. Concentrate all your spare cash in paying off the smallest debts and once this is done, move to the nest smallest debt, while paying the minimum required on the others.

6) It is never a good idea to close down credit card accounts - they useful to regain control of your probably shredded creditv rating. Keep them but only use them minimally *if* you can discipline yourself to pay off the complete balance at the end of the month. As you are in debt now, it is not likely that you can do this so, as your cards get paid, hand them to a friend whom you trust to take care of them for you. Make sure that they are trustworthy!!

I am sure that many can add numerous practical tips as to what they have found a useful methodology in dealing with your debts. Please feel free to share them.

Good luck - HS

greendawn

I don't know how things are in the USA but in the UK supermarkets often put up very good offers and if these are useful one can buy a quantity and store them, even meat in the freezer, for longer term use.

I don't mean silly offers where you get a few pennies of reduction but things like buy one and get one free or 30% and over off the normal price. Over the year this can build up to a tidy sum.

MegaDude

great post.

I would just add to begin educating yourself on money, how to make it, invest it. It is interesting to study people who have made quite a bit of money. I highly recommend "The Millionaire Next Door." You'd be surprised how spartan some millionaires live. Much of this information is available for free at your public library. In many cases it's available on audio at your library so you can listen to it on your drive to work.

potleg

I found myself in the same situation too ( isn't it amazing how much we all have in common) the best information/plan I found was Dave Ramsey's "The total money makeover" it's tough, but it works.

hillary_step

Mega,

You'd be surprised how spartan some millionaires live.

Very true. After my first home was purchased many years ago, I sold it at a profit and with the cash left over bought outright a much *smaller* home than the one I had just sold. Of course most people raised their eyebrows, but public opinion is of little merit in these matters. If you live your financial life for others, you will be in financial trouble for most of it.

In time I sold this home at profit and bought a larger home outright, this time not having to pay a mortage company back its loan, as the home I sold was not mortagaged. Using this methodology, I eventually owned free of liens a large seven bedroomed Georgian home in Europe, which I sold. I then downsized as I hate big homes as much as big TV's and invested the cash left over. From beginning to end this took twenty years, which may sound a long time, but looked at as 240 months it is much less painful....lol

I have made my fair share of very stupid decisions, and lost at least two fortunes, but if you keep your nerve recovery is possible.

Warren Buffet drives a ten year old car and is happy to live in a home that compared to his net worth is very modest. The man has the right priorites. We all end up at the same grave in the end, but being owned by a bank or a credit card company gets you there a little more rapidly!

HS

DanTheMan

Other than my house mortgage, I am in the black, not by a wide margin though. I have a "pay-as-you-go" personal philosophy that I am quite rigid about, hence I drive a car that is over 10 years old, wear fairly plain clothes, don't travel much, etc. The thought of investing scares the crap out of me, seems like a roulette wheel, though foreign currency is starting to look attractive.

G Money

For those that are homeowners, they may be able to tap into the equirt in their homes as mortgage rates are lower than credit card rates and the payment per 1,000 borrowed is also less. Even better if you can lower your rate, shorten the term (i.e. go from a 30 year loan to a 15 year loan) and still be paying less than the old loan polus credit cards.

Another long term strategy is to contribute to a retirement plan. Many employers match. As the earnings are pre-tax, $200 a month placed in a retirement plan may only lower your monthly take home pay by $150-180. Also you can start small and it is amazing how it adds up. One never knows what the future brings and qualified retirement plans can be kept through bankruptcy as well as may be immune from attachment if you lose a lawsuit.

talesin

good thread ...

I started taking a lunch to work after my divorce. Yeah, there were a few bills. Even if you are eating on the cheap, $5 lunches, that is 25 bux a week, or $1250 per year. That's one credit card, easy!

A couple I am friends with had a credit card problem. They took a large ice cream tub, and filled it half with water, froze it. Placed the VISA/MC whatever inside, then filled it up and put it in the freezer. The reasoning was, you can't nuke it, it may damage the card. He wouldn't be able to make impulse buys, cause he would have to thaw it out first! It worked for them. ;)

Good idea on the bulk buys of food on sale,,, you can save lots of money on 2-for-one... last week, I got frozen tuna steaks this way, that is half price.

Also, buying your meat in bulk,,, a side of beef or pork, or a dozen chickens, direct from the farmer can be REALLY CHEAP. You can split it with a friend. Just make sure you check the weight, and the farm is reputable and government certified.

tal

Frog

great advice hs:) I've had to fully re-educate myself financially since leaving the org as well. Not that I can blame the org entirely for the live for the day policy. My father was an absolute scrouge and my mother was never given a cent from him, so I never really experienced money until I started working, and it took the novelty of having money a very long time to wear off!

Re: saving money on food by buying in bulk, my suggestion, although a very biased one, is to give up eating meat! It's bloody expensive to buy good quality organic meat, and it's not worth buying the horrible low grade stuff. There's plenty of great food you can buy to supplement meat in your diet. Perhaps just buying some fish whenever you can afford it. I find fresh food markets are the way to go for buying fruit & veg. It's pretty normal to pay half supermarket price at markets.

Don't have a credit card anymore, just can't seem to manage them properly. I tend to be able to invest in bigger and better things when I have to save up the cash for it.frog

the_classicist

I don't know how things are in the USA but in the UK supermarkets often put up very good offers and if these are useful one can buy a quantity and store them, even meat in the freezer, for longer term use.

I don't mean silly offers where you get a few pennies of reduction but things like buy one and get one free or 30% and over off the normal price. Over the year this can build up to a tidy sum.

You should meet my family. Both the fridge-freezer and the large freezer (quite large, it's about a meter and a half? wide and a little over a metre tall) are packed. Mind you, I can't cook and the quality of microwaveble foods that come frozen have risen (like frozen tortellini).

XJW's And The Debt Factor

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