Wednesday, September 18, 2013


Often, those in financial trouble are in survival mode.  They are looking for a windfall, an "easy button," a quick fix, or a change of fate such as winning the lottery.  Their judgement is impaired because they are panicking, scrambling to try to pay bills.  Their distraught emotions get in the way of clear, objective thinking. Financial crisis makes people look for an "off" switch rather than trying to deal with the problem in a productive way.

Getting out of debt can be a long battle.  It takes hard work, sacrifice, sweat, tears, and above all, time.

Imagine you are trying to fill a tub with water, but water leaks all over the floor because the tub is filled with cracks.  The easiest way to fill the tub is to seal the cracks, not to increase the water pressure.  Neglecting to repair the cracks wastes water and leaves a huge mess.  The cracks are the problem, not the water pressure.

With finances, the tub is your savings account or wallet.  The water coming in is your income, and the cracks in the tub are your debt, expenses and spending.

Many people believe their financial problems are due to a low income.  But statistics show that 80% of Americans spend beyond their means, no matter how small or great their take home pay.  Instead of trying to reduce spending, many people try to get an increase in income to fix their financial problems.   They are busy trying to BRING IN money they don't have rather than trying to SAVE the money they do have.  It's not an increase in income which is the problem - it's the habit of spending beyond your means.

Don't misunderstand - it's also a smart move to try to increase your wages to pay off debt.  Dave Ramsey's Financial Peace University classes teach you to attack your debt with intensity, from all angles. They suggest having a garage sale, selling stuff on Craigslist or Ebay, or delivering pizzas as a second job for a while.

But above all, they teach you to first work on reducing your expenses.  Why?  Because it's easier to keep money you already have than to drum up money you don't have (and may never get). The old adage, "a penny saved is a penny earned," is true: money that is not spent is still sitting in your wallet!

Tips to reduce your expenses:

  • Do it yourself.  Cut out any services such as lawn care, house cleaning services, dog walkers, dry cleaning (use Dry-el or an Iron!), etc.
  • Make it yourself.  Make your lunch and take it to work instead of going out to eat.  Make your own coffee at home instead of buying it at a coffee shop.  Make your own laundry detergent and cleaning products which are cheaper than buying it at the store.  Make homemade gifts inexpensively.  There are literally tons of ideas on Pinterest.
  • Clip Coupons and follow money-saving websites.  Here are some good ones to follow:, and
  • Cut out the "wants" not the "needs."  Food, shelter, clothing and transportation (to get to work) are needs.  Cable TV, videos, toys, gift giving (birthdays, weddings, baby showers, Christmas, etc.), entertainment, restaurants, activities, etc. are wants. Get creative with finding free entertainment or making homemade cards & gifts.
  • Cut up the Credit Cards. If possible, stop using your credit card and switch to cash (or debit cards).  Studies have shown that paying in cash registers as pain in the human brain, whereas it it does not when swiping a card.  Therefore, there is no sense of loss when using a credit card.  As a result, people tend to spend up to 16% more with credit cards as opposed to cash, while the average American household spends about 16% more than their annual income. Source Check out this eye-opening Article  by Dave Ramsey.

1 comment:

  1. Great article and it is a good analogy about sealing the cracks first. We really look for the "Easy Button" in everything, marriage, church, work, savings, diet. In the end it is nothing but hard work discipline and focused intensity.