Where was that millionaire’s manual?

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I peered over my youngest child’s shoulder as she opened a financial aid letter from the private college she’ll be attending in the fall. It was a notice about the student loan offer that was part of her financial aid package. (There’s an oxymoron.) “No, we’re not doing that,” I said to her. “But then,” she asked, “how will we afford my college?” “I’m saving our pennies,” I said. “You are not going into debt.”

My oldest had already accrued some debt before I woke up to our financial nightmare and started getting it together. I’ll pay that at the end of the line, after cash flowing both their college costs, paying off all our credit card debt and car loans. Then there will still be the HELOC and the mortgage. Still, we should be totally debt free in a little over five years.

Yep, I’m hell bent on living on a budget, paying cash for college, and paying off the nearly $662,000 in debt we accrued over the years.

I can’t believe how stupid my fella and I had been. As I’ve written, two decades ago we inherited a million bucks. An inheritance like that should come with an owner’s manual. It would include tips like these:

  • Put the money in mutual funds.
  • Don’t touch the principle except to buy real estate.
  • So don’t take out a mortgage.
  • Live on your income, not the proceeds from the investment, much less the principle.
  • In fact, live on a budget so you can still add to your investments.
  • And don’t borrow a dime.

Well, there was no manual, but we should have had enough sense to seek out some good advice. Fortunately, we did roll over a good amount into some IRAs so we weren’t left with nothing after all our stupidity.

As Dave Ramsey says, now’s the time to stop looking in the rear view window and start look ahead. It’s going to be fine.  I found me some sense before it was too late. I’ve written my own manual. If all goes well, we’ll get back that million and then some.

 

Obsessing

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I’ve been hyper focused on getting out of debt for almost three months now. Benefit: down more than $20,000 in debt. Downside: I’m hardly getting any work done.

I spend most any spare time drawing up spreadsheets that astonish me with their detailed power and demonstrate how I can be a millionaire again in a few years. I never before could make a decent spreadsheet and now I’ve got a life-changing one.

When I need to be working on my current book or preparing for class, I’m listening to Dave Ramsey podcasts, secretly, because it would blow my lefty cool to be associated with this evangelist preaching to the masses. But still I’m hooked.

I’m a bit OCD, to put it mildly. This is a curse and a blessing. I can hyper focus for an intense but short time. So as much as I am worried that my obsession is too much, I’m also worried that it will suddenly vanish.

I hope this time it is different.


Image: detail of Piet Mondrian, Oostzijdse Mill with Extended Blue, Yellow and Purple Sky, 1907-8. https://www.theartsdesk.com/visual-arts/mondrian-turner-contemporary-tate-liverpool

 

My FICO Score

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A 672 FICO score used to be cause for alarm. No more.

Now that I’m woke, my FICO score doesn’t matter to me at all. It used to be in the excellent — yes lend me more money! — range, even when I was carrying so much debt that no sane bank should have lent me another dime. Eventually even the banks had second thoughts and the score dropped down into the 500s.

Now it’s back up to good. In past days I would be despairing. Now I don’t give a damn.

That’s because in the meantime I’ve figured out (with help from Dave Ramsey and other folks) that this score is only good for conveying how good I am at making banks rich, not for taking care of myself.

I hope to never ever open up another credit line of any kind. So my FICO score doesn’t matter to me at all. Soon I’m going to aim for it to disappear altogether. Screw the banks.

On Dave Ramsey

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I get my little fix of debt-reduction enthusiasm now by watching Dave Ramsey at the end of the day. A month ago I hadn’t heard of this guy, testament to my left-wing bubble, and he’s over there in that right-wing bubble. He’s on the radio somewhere; I’m not sure where, since I’m busy on the left end of the dial listening to public radio. There seem to be parallel, non-intersecting worlds of the jesus-loving debt reductioners like Ramsey and the liberal elite who hardly ever pay attention to personal money matters.

Okay, many of my left-wing colleagues are very responsible, frugal, and cool with being on budget. But no one talks about it.

I’m just talking about me.

I love this Ramsey guy. I like how compassionate he is with a caller in dire straits. He toes an interesting line between being damning and being non-judgmental, insisting on responsibility but understanding when people have gotten themselves into deep kaka. Frankly, he’s the best kind of Christian. I’m no Christian, religiously, but I hope to live up to the best values that this Jesus dude lived by. So I’m all for these values.

I get worried when the mantra of living within one’s own means gets displaced on to the macro-level of politics. Austerity works great at the individual level when one is trying to climb out of debt, but it is a horrible policy at the national level. I’ve written about this academically, and I have family who have suffered personally under austerity politics; but I’m being pseudonymous here so I can’t tell you what. But ask any macro-economist and they’ll tell you that influxes of money have multiplier effects. Economies do well with infusions of resources that circulate; they whither when starved. That doesn’t happen in a household, but it’s vital in a large political economy. So, anyway, Ramsey’s rant about “socialism” just doesn’t do it for me.

Maybe part of the polarization in this country is tied up with this confusion between political economy and personal economy. The right want austerity at all levels, the left at no level. That’s just stupid. The left needs to appreciate the need for personal austerity and the right needs to appreciate the need for societal economic infusions. These are not mutually exclusive! They can live side by side.

So I’m basically ignoring Ramsey’s politics and taking with a grain of salt his particular religious view and all the subtle patriarchal shit on his show — like praising the “ladies” who decide to get a side job.

But I still love this dude, and probably much of what I love is the result of his Christianity and his politics. So I just have to sit with this mass of contradictions. He’s taught me how to think about paying off debt, how to live responsibly, and how to flourish.

Thanks, Dave.