Is DEBT Always a 4-Letter Word?

Photo "Wiping out debt" courtesy of http://taxrebate.org.uk

Photo “Wiping out debt” courtesy of http://taxrebate.org.uk

According to the 2015 American Household Credit Card Debt Study, U.S. consumers owe a total of $712 billion in credit card debt, and $8.37 trillion in mortgages. The average American household has $132,086 in debt, with $15,310 of that on credit cards. For those carrying student loan debt, the average balance is about $49,000.

OUCH.

Like risk tolerance, debt tolerance varies greatly from one person to another, depending on one’s circumstances, upbringing, etc. Some people seem to embrace debt like an old friend, while others avoid it like a weekend visit from the in-laws.

Financial guru Suze Orman believes that there can be such a thing as “good debt” in certain circumstances: student loans for an education that will improve your earning potential and net worth in the long run; a reasonable mortgage, when it’s managed responsibly and has an end in sight.

The Minimalists, on the other hand, wholeheartedly profess that “There is no such thing as good debt!” Debt is the thing that keeps us stuck in jobs we hate, making payments for a bunch of stuff we don’t need, trying to impress people we don’t know or like. All debt is evil. Avoid it at all costs.

Unfortunately, many people do get in over their heads, taking on more debt than they can comfortably afford. Hopeful twenty-somethings graduate from college with six-figure debt, only to move back home with their parents and work at Starbucks. Young families bury themselves in decades of mortgage debt in order to buy the McMansions of their dreams, furnish them with credit cards, and lease luxury SUVs to impress their equally indebted neighbors, without really looking at the big picture or questioning whether or not it makes sense for them.

While mindless consumerism likely accounts for some portion of this mountain of consumer debt, according to NerdWallet, other economic factors are also at play:

Household income has grown by 26% in the past 12 years, but the cost of living has gone up 29% in that time period. And some of the largest expenses for consumers — like medical care, food and housing — have significantly outpaced income growth.

When cost of living outpaces income growth, debt increases.

It would be easy to say consumers are spending irresponsibly, leaving the recession (and their budgets) in the dust. But it’s not quite that simple.

Personally, I don’t think any type of debt should ever be considered “good.” But I will acknowledge that, in certain situations, when entered into mindfully, with a clear means of repayment and an end in sight, some debt can be used as a tool to improve our lives and help us meet our long-term financial goals.

A small mortgage, for example, can make sense if the monthly payment, including taxes and insurance, is equal to or less than you’d expect to pay for rent. If you’re blindsided by an unanticipated financial emergency without adequate savings, a credit card can be a lifesaver. A small car payment can provide the means to obtain a reliable vehicle to get you to work every day.

What do you think? How do you feel about debt? Is it an important financial tool, the root of all evil, or somewhere in-between?

~PEACE~

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Dining Out, Downshifter Style

Since I began my downshifting journey, I’ve read hundreds of books and articles on saving money and living below one’s means. Most of them recommend preparing meals at home and eliminating restaurant meals as a way to cut costs. I won’t deny that dining in is a great way to save. It’s a no-brainer, really, but…

I truly enjoy going out to eat. As the only person in my house who cooks, sometimes I just get sick of cooking. Seriously sick of it. For me, trying different foods and new restaurants is one of life’s greatest pleasures. So what’s a frugal downshifter to do?

Fortunately, I’ve discovered a few simple ways to save in this area, so if dining out is important to you too, read on. We really can have our cake and eat it too!

  1. I don’t do “DINNER.” Perhaps due to my early morning work schedule, I’m not a big night eater. I like to get most of my eating out of the way earlier in the day, when I’m working, moving around, and burning calories. (Also recommended for good digestion and weight loss too!) I love to go out for breakfast, brunch, lunch, and/or happy hour, then just have a light snack at home in the evening.
  2. I try to keep it light. Kind of related to # 1 above. When I go out, I usually opt for lighter fare: soups, salads, sandwiches, appetizers. Or if I get a bigger meal, I take half (or more) of it home and get another meal or two out of it. (Also another good diet tip!)
  3. I don’t eat a lot of meat. I’m not a vegetarian, but keeping my meals light and simple often means not eating much meat. Even when I cook at home, I often use half the meat and twice the veggies that most recipes call for. It’s cheaper, and again, healthier!
  4.  I take advantage of specials whenever I can. Weekdays are an especially good time to take advantage of happy hour deals, half-price appetizers, buy-one-get-one-free offers, coupons, etc.
  5. I enjoy a drink. One. Sometimes two. Not three or four. Booze is expensive — and loaded with useless calories! Have a drink, then switch to water. Your wallet and waistline will thank you.
  6. I pay with cash most of the time. I hate credit card bills even more than I hate cooking. Dining on plastic just doesn’t make sense to me.
  7. I tip well, especially at places where I’m a regular customer. When you take good care of your waitstaff and bartenders, they’ll take good care of you, sometimes with free drinks, “samples,” etc. They work hard for their money. Don’t skimp on the gratuity.

While saving money is an important component of downshifting, mindful spending is key to living life according to your priorities. For me, this means never passing up an opportunity to share a drink and a good meal with a loved one. After all, isn’t that what life’s all about?

~PEACE~

A Different Kind of Spring Cleaning

Spring is a great time to clean house. Clear out those closets. Reclaim some free space in the attic, garage, or basement. Unload. Lighten up. Downsize. Simplify. Getting rid of stuff is so liberating! I feel freer just thinking about it, don’t you?

If you want to break ties with some of your baggage, but don’t know how or where to get started, here are a few suggestions and strategies I’ve picked up and perfected over the years. Trust me, once you get started, you won’t want to stop!

STUFF!

1. Start with one small specific area of your home, ie. the hall closet, the medicine cabinet, one bookcase, that catch-all dumping station by the front door, etc. Each small victory will drive you on to the next.

2. Decide on a short time limit, during which you will accomplish as much as you can without feeling overwhelmed. The thought of spending an entire weekend cleaning the house isn’t appealing to anyone, even a neat freak like me, but you’ll be amazed at how much you can accomplish in just an hour or two!

3. If even that seems like more than you can handle at first, try getting rid of just one or two things per day for, say, a week. Then another week. Then a month. Pull one thing out of the closet every morning that you can live without. Take one knick-knack off the living room shelf. Pass along a book or CD to a friend and tell them to do the same when they’re finished with it.

4. Once you’ve gathered together all the stuff you want to remove from your life, what do you do with it?

  • Have a yard sale.
  • Donate or consign newer or lightly-worn clothing.
  • Donate books, useful household items.
  • Sell larger or more valuable items on Craig’s List or eBay.
  • Sell books, CDs, etc. on Amazon.
  • Re-gift.
  • And, when all else fails, simply throw away some of the old stuff. It’ll feel great, I promise!

Then, the trick is to maintain. For every new article of clothing that comes into the house, get rid of two. This really works for me! Don’t let things pile up. Do a quick daily clutter sweep, even just 5 minutes when you get home from work. Keep it up! You’ll be driven by your new sense of weightlessness — freedom from stuff!

BUT WAIT, THERE’S MORE.

While clearing the space around you can be mentally liberating, you don’t have to limit the clean-out to just the tangible stuff in your life either. I started writing this blog post with the intent of giving you some tips and tricks for eliminating some of your physical baggage, but oftentimes, our mental and emotional “clutter” trips us up far more than our actual “stuff.” If you find this to be the case, perhaps some springtime spiritual cleaning is in order.

Consider freeing yourself from any negative thought patterns & bad habits that no longer serve you well. Change up your daily routines. Did you spend the winter eating unhealthy foods, drinking too much, and avoiding exercise? (Guilty.) Start fresh!

Guilt? Drop it. Anger? Let it go.

Consider cutting ties with any negative people and relationships that are keeping you down as well. Or at least limit the time you spend with certain people, even if you’re related to them. Be kind to yourself, and surround yourself with people who will do the same. You deserve that, don’t you?

Think about who or what is stressing you out, draining your batteries, wearing you out, taking up valuable real estate–in your mind, in your body, in your home, in your schedule? De-clutter your mind, heart, soul, and body while you de-clutter your physical environment. You’ll add years to your life. And they’ll be happier ones.

But above all else, try not to take anything or anyone too seriously. Ditch the darkness and drama. Un-complicate. Don’t forget to laugh. Life is too short, and it’s the only one you’ve got!

~~PEACE~~

 

 

 

Confessions of a Low-Maintenance Woman

In the pursuit of simplifying my life, saving money, and streamlining my daily routines over the years, I have evolved into a relatively “low-maintenance” woman. Don’t get me wrong. I still take good care of myself. But now I tend to work more from the inside out, focusing my attention on things that affect my overall health instead of simply my outward appearance.  And you know what? I feel pretty good, and I don’t look half bad either!

Here are a few of my biggest time-saving and money-saving “secrets.”

  1. I don’t go to the gym. I go for walks. I hike. Outside. In the fresh air. Even when the temperature is so ridiculously cold that my eyelashes freeze. I have a physical job, so every day entails plenty of heavy lifting: trays of letters, bins and bundles of magazines and catalogs,  heavy packages. At home, I lug armloads of firewood into the house every day during the winter. My cable TV network offers a variety of free workout videos “On Demand,” so I stretch, tone, and do pilates in the privacy of my own living room.
  2. I color my own hair. As a matter of fact, lately, I haven’t even been coloring it at all! Those pesky grays are starting to creep in though, so I’ll be picking up a $6 package of Clairol’s Root Touch-Up very soon.
  3. My husband cuts my hair. (Un)Fortunately, I have the kind of long, fine, straight hair that really doesn’t do much of anything no matter how hard I try, so it looks basically the same whether I have it cut professionally or do it myself. My husband has a steady hand, so why waste the money?
  4. My fingernails look like crap. I pretty much gave up on my hand-modeling career prospects when I started working at the post office. I now have the callused hands of a working woman. Hangnails. Paper cuts. Dry skin. Split fingertips. All of these occupational hazards make manicures a total waste of time and money.
  5. I shop at Goodwill and the Salvation Army. They carry a unique and ever-changing selection of clean, gently-used clothing. Sometimes I have to work a little, riffling through the overstuffed racks, but the rush of finding the perfect item for just a few dollars makes it worth the effort. I also have a friend at work whose twenty-something daughter is the same size as I am, so I get plenty of hand-me-downs. Don’t get me wrong. I also buy plenty of new clothes–more than I really “need,” I’m sure (usually off the clearance racks, though!). But I have no problem wearing other peoples’ cast-offs. Less waste, and more clothes for ME!
  6. I choose multitasking products. Despite my frugal and simple ways, I am still a bit of a beauty product junkie. My mother swears by her Oil Of Olay, never leaves the house without lipstick, and is the most beautiful 85 year-old woman I know. I hope I’m genetically programmed to follow in her footsteps, but I also have no problem giving mother nature a little help. My bathroom counter is covered with a variety of lotions and potions, but I prefer those that serve more than one purpose: all-in-one tinted/anti-aging/sunscreen/moisturizer, conditioning/styling hair products, etc.

Despite my no-muss, no-fuss attitude toward my appearance, however, I also have a few rules and minimum standards that I always uphold without fail. I NEVER wear sweatpants in public, and I will NOT leave my house in the morning without a shower, perfume, and mascara. I may be low-maintenance, after all, but I’m not a cavewoman.

~PEACE~