Striking Debt For Relief And Closure
In an attempt at ever-present honesty on this blog, I have come to the realisation that I want to write about some of my issues with money.
The ever-present fear of not having enough of it to cover basic needs, to begin with, and with that, a tendency for hoarding and issues with generosity.
Admitting your own shortcomings is never a fun pursuit, but I hope it could be a relief for glossy images of picture perfect personal finance blogs where all you have to do is cut cable and stop eating out and everything will be sunshine and roses.
Of course, life isn’t always as easy as that, and for someone who has grown up without a surplus of money, there is always the risk of falling off the frugal wagon and into the dark lands of simply being a cheapskate.
Especially if you are sharing finances with your partner and have for years, I admit that this story might not paint me in the best of lights. Still, let us practice honesty and share one of the issues Mr. E. and I have dealt with over the last year.
A Wee Pup
I suppose to understand the story, you need to understand something about where I came from.
We grew up working class. Stable working class where at least one parent always had work, and we were never evicted, but still working class. Allowances were sporadic and arbitrary, dependant on factors outside a child’s understanding and control. Things like mortgage interest (double digit crisis of the 90’s, anyone?) and heating in winter.
I circled the toys I wanted in the toy catalogue with two different colours. One colour for the things I wanted but knew were in the “in your dreams” price range, and a different colour for things that might fall within a more acceptable range.
As a teen, I worked at a pizza shop just up the street, earning just enough for my first laptop. The first ever private computer of my own, unshared and unscheduled with siblings and parents. A sizeable chunk of my income went to pay for my cash phone and monthly bus pass. I even had a little leftover for the very occasional purchase and saved up for the big thing: Getting a license before leaving for uni.
I had no part-time job while in university. I got by on the modest stipend and supplemented it with an annual summer job. Money was not in excess, but since I feared credit cards like the plague, I simply spent a week eating out of my pantry if I ran out of money before the next stipend came in.
I always had enough money for rent and utilities, and my cupboards were always sufficiently full to sustain me for a long time if need be. By being careful (not smoking, drinking or having a car helped as well), I made ends meet consistently.
With such a scarcity mindset growing up, it should come as no surprise that I developed the habit of counting and tracking my spending to various degrees. In general, people knew better than to ask me for money.
A Sudden Influx
Then came some years of instability after university, which I touch upon at various points in the blog. But finally, I landed a secure 4 year contract with a decent (to me) salary. Nowhere near $50k anually, but more than enough to live comfortably after years of insecurity and having very little to save.
Only a few months after I started my job, Mr. E. arrived after finishing his degree in London. And a month or so after that, we got hit in the face by a massive tax bill due to a paperwork error. To add insult to injury, Mr. E’s student loan stipend got delayed, and I carried us through a few months on my salary alone, which would have been perfectly fine, if not for the aforementioned massive tax bill and our lack of a full pantry.
Shared, But Separate
I have mentioned before that Mr. E. and myself have what we call “shared but separate” finances, which means that we solve all money-related issues together, but have separate accounts in addition to our one joint account from which rent and utilities are paid.
Since I earn more than Mr. E. gets as a stipend, we agreed that I would pay 2/3 of our rent, while he would pay 1/3. During the time when he had nothing coming in and no freelance work, he dutifully and painstakingly logged each expense that I covered which “should” have been his.
We agreed that he should pay it back when he could. Half in increased rent that he would log, and half into his own, high interest mortgage savings account for our future. Him being a very conscientious man, and me having my issues with letting go of money because of my past, we felt this was a fair arrangement at the time. Especially since we kept our belts so tight for those two months while the storm was at its worst.
Add to this that I had just dived headfirst into the world of Mr. Money Mustache et al, I was feeling frustrated with all the money that was going “down the drain” instead of partying in my savings/investing. How dare a real life emergency get in the way of my plan??
With each month, Mr. E. would add his little rent increase to our shared account, and each month, without fail, he would run out of spending money 1-2 weeks before his next student loan stipend.
I am privileged to be of reasonably sound body and mind. At least to the point where I do not have to pay for subscription medication or regular doctor’s appointments.
Mr. E. on the other hand, has a chronic condition that requires him to visit a doctor regularly and pay for medication. This could add between $50-100 to his monthly bottom line, and when you only get about $1000 to live on, that is a significant amount.
In the beginning, I’ll admit that an ugly part of me felt that, since I had gone through the poor student life and managed, so should Mr. E. be able to. But I failed to take into consideration that our situations were quite different.
10% of your stipend in medical bills? That was certainly not an expense I had ever incurred. I had managed, but just barely, and not with extra expenses like that.
I felt more and more guilt stricken, watching my partner dutifully pay me back as best he could while incurring higher medical expenses on a lower income. We had felt it was fair at the time, but while I was socking away money for our mortgage downpayment and investments, he was running close to zero almost every month.
It felt like I was abusing my power as a higher earner, and it did not feel nice.
Realisation, Admission, Relief
Think I am a horrible cheapskate yet, who tortured my partner like that for over half a year?
Well, it is with a great sense of relief on both of our parts that I can report that only a few days ago, we sat down and talked about this dark cloud that had been looming over us. I was frank about my feelings on the matter, and proposed we strike the remaining debt in its entirety.
Being conscientious, as previously mentioned, Mr. E. accepted only on the condition that he’d be allowed to pay a bigger portion of our shared costs once he was financially able to do so.
Later he shared with me that while he on his part felt guilty for taking my offer, a huge load was taken off his shoulders. Getting back to zero, even if it was just numbers on a page, had a huge impact on our general mood.
I felt similarly, as removing this agreement was one less thing to think about and administer. I strive for a simplified life wherever I can, and this includes anything that demands mental capacity and saps my time, like tracking credit cards or subscription services or any of the “optimisation” hacks proposed elsewhere on the internet.
A Simple Life
For similar reasons, I cancelled my free Audible trial as soon as I had finished Meet The Frugalwoods. Get it out of my way and out of my life, so I don’t have to remind myself to remember to fix it later.
If you save $100 a year by juggling 10 different credit cards and swapping accounts like a pro to avoid fees or interest? Great for you!
But I’m lazy. I’d rather not save those $100 and get hours of my time back.
A Financial Rocky Road
So, now that I have admitted one of our big financial elephants in the room, I am ever-curious. Have you had any similar experiences with people close to you? Or have you been burned by borrowing money to someone who could not be trusted to pay it back. Are you financially naive with your loved ones, or are you a tightwad who struggles with sharing what you have?
I know I can tend towards the cheap slope of things, and it is something I am actively trying to work on. My ultimate goal is to be frugal, but generous. I’m not where I want to be yet, but I am working on it.