|
$urviving the Economy: Dig out of debt
"Budget was not a word for us," Lisa Dolan said while she worked on dinner for her family. "Life before a budget was impulse." Life before a budget turned out to be a recipe for disaster for Dolan and her family. Poor money-management combined with her husband Tim's job loss, meant the Dolans weren't bringing home enough bacon to cover the bills. Lisa tried and failed to close the gap with credit cards. "I have to save my cash coming in because I have to use it to pay the bills. But the bills are the credit cards. And so you're just zooming down this bad spiral," Lisa said. It was a wild ride that would take the Dolans deep into debt. "The number walking in was $60,000," Lisa said. Add interest and other finance charges, and Lisa said the total jumped a whopping $78,000. "It's a national problem, debt and living beyond people's means," Lutheran Social Service financial counselor Darryl Dahlheimer said. No, the Dolans aren't alone. It's so bad, financial counselors have given it a name. "They call it affluenza, like the influenza. It's something that could happen to any of us," Dahlheimer said. Affluenza is described as a condition of overload, debt, anxiety and waste resulting from a dogged pursuit of more. "If we don't change our course from the spend all you can to start saving and aggressively going for debt reducing, then there will soon be a time when the debt takes over the wealth," warned Dahlheimer. Lisa says the good news is there is life after affluenza. Nearly five years ago, with help from Lutheran Social Service Financial Counseling, the Dolans started digging out. "It takes a lot of little things," Lisa said. The Dolans realized "little things", collectively, add up to hundreds of dollars a month. "Our theme music is there's almost always a way to do things cheaper and to lower your standard of living, spending, without lowering your satisfaction," Dahlheimer said. KARE 11 NEWS got cost-cutting ideas from money managers all over Minnesota. The number one suggestion, by far, is when it's time to eat, stop using keys and start using utensils. "Stop eating out. If you love to eat out, do it less and enjoy it more," Dahlheimer said. And at lunch, brown bag it! Bringing your midday meal to work can save five to ten bucks a day. That's $100 to $200 in savings every month. Also, think about taking a bite out of the snack and beverage bill. "I make my own coffee every morning; I don't go to Starbucks every morning," Lisa said. Lisa estimates she saves $140 dollars a month now by skipping those Starbucks stops. The family scores another $60 in monthly savings by bundling their technology services. Debt counselors say you too can squeeze out monthly savings by deleting some of your technology. "Settle for less than the newest. So cell phone or land line, not both," Dahlheimer said. Unplug a land line and pocket $20 to $30 a month. Eliminate a cell phone and save even more. Picking one will mean answering another important affluenza question: do you need it, or do you want it? "You mean not everything is a need?" University of Minnesota family social science professor Jean Bauer said smiling. "If you're trying to match and be like someone else, that's for sure a want." "Everything feels like a need. It's a drumbeat--buy, buy, buy. Buy now, pay later," Dahlheimer said. "And sometimes making the choice not to do something gives you more of a choice later to be able to get you to where you want to go," Bauer added. Armed with a new recipe for success Lisa finally got there! "I can't stop smiling about it," Lisa said while she finished up her family's supper. Last month, after nearly five years, the Dolans paid off that $78,000 debt. "And our lives have not been deprived," Lisa said. Indeed, there's been enough cash for new iPods and a family vacation to Yellowstone Park. "I've come to love to cook," Lisa added. And meals are better than ever. Today the Dolans measure wealth in a whole new way. "You develop that worth of self that's not contingent on what's in the bank or what you own. You don't need it to feel okay, you just don't," Lisa concluded. The Dolans got help from Lutheran Social Service for their financial counseling. The group is a member of the National Foundation for Credit Counseling and the Minnesota Better Business Bureau. Learn more about Lutheran Social Service and the group's financial counseling Officials from Family Means Consumer Credit Counseling also contributed money-saving ideas for this report. The Twin Cities group is also a member of the National Foundation for Credit Counseling. Learn more about FamilyMeans and the group's financial counseling There is a cost for creating a Debt Management Plan (DMP) with Lutheran Social Services (LSS). According to Lutheran Social Services, you make one monthly payment to LSS, which is distributed to all creditors on the DMP. Payments on a DMP may be lower than your current required payment, and many creditors will reduce interest rates and stop late or over-limit fees once on a DMP. According to LSS, the budget counseling intake is free. If you decide to begin a DMP, there is a $35 fee to start the program and a monthly fee based on the size of your DMP payment, up to a maximum of $50 per month. LSS officials say most clients find that the benefits of the DMP more than cover any costs of being on the plan.
|
 MORE HEADLINES |
|||||||||||||||||||||||||||||||
|
