Thursday, October 20, 2011

Underearning, Overshopping and Keeping the Numbers

Oh, the thrill of it all. Opening the mail, realizing you owe trillions and having no desire to deal with it at all.

The it I'm speaking of is in your head. Thinking there's no way out can lead to drinking or gambling or compulsive shopping or getting under the covers and not leaving the house for a week, or overworking until you have the first symptoms of a stroke or whatever the fix is, the fix that doesn't.

I know this because I did all of those things. Well, maybe not the drinking or gambling.

A word about shopping. This is the tip of the iceberg. Underneath the tip is a monster almost as large as a continent that needs to be dealt with in a healthy way. Not the usual way that just doesn't work for you anymore. And what I mean by "dealt with" is to stop compulsively shopping and see what happens. It may lead to a short trip to a counselor or a support group. But there is hope and one clear remedy for getting out of debt is to not debt any longer. That would mean not shopping in the unconscious way you've been doing for years. And if you don't think you're a compulsive shopper, look in your closet. The closet will speak volumes about what's going on.

Underearning ~

The underearning dis-ease is more subtle. We can't open the closet to find proof we're underearners. I'm the poster child of underearning which led me to a very dark place in the woods alone with only my car, dog and computer. I'm tempted to describe my feelings back then. Just so you know...that was a time I choose to forget. Underearning is so insidious it creeps around you and suddenly while you're giving away or selling some of your most cherished possessions, you don't know why you got into so much debt...except maybe because you are working hard at two maybe three jobs or one in which you do the work of three people. Or maybe it's because you said yes to working for an attorney for $6.00 an hour as I did.

There's a wonderful book called Earn What You Deserve by Jerrold Mundis. He's written a lot of books and this may be the best of them. If you go to work and you don't calculate the time spent there and the time preparing to go there and the gas money it takes to go there and the clothes you have to buy to go there, and the time change that should be configured, you may be an underearner. The horrible truth is that if you are an underearner, you're at risk because your income will not be sufficient and you'll be inclined to create more debt.

Many people are at a loss to figure out how to stop the underearning. Here are a few concrete ways to stop the crazy underearning, the spell you're under telling you to get a job, any job.

1. Your B Job: Take a job you might like, one you're skilled at and can enjoy and do that at the going rate which you can find usually on If you're good at sales, I suggest you not take a sales job unless they pay you the commissions and you are paid weekly or biweekly. You're no longer a victim. You have to take a stand and ask for what you're worth.

2. Your A Job: This is the best work you can do. Something you've wanted to do for ages, maybe since you were a child and already knew, but the seeds were sewn and everyone, especially parents, told you no. No, you will not be a dancer, actress or engineer. These people didn't know better and should have supported your dreams. It's sad, but so what. That was then and today is a new day. So while you're pursuing your A Job, calling connections, getting business cards made, finding a mentor or a Business Coach, you have a check coming in.

As underearners, our worldview is somewhat skewed. Use the metaphor of Niagra Falls. You're standing there waiting for your share of water (money) with nothing more than a teaspoon while the Falls are offering you all of it - and more where that comes from. It's an anorexic way of seeing money. Money is a neutral thing. Like Niagra Falls, it's energy. Watch it come in. Watch it flow out. Money needs to move. If you focus on money coming in, it will. But it can't and won't if you're hoarding it or fearful you'll be destitute if you spend it.

Here's another point about money. It likes you. It really likes you. But you put up the stop sign. Just try putting up the stop sign at Niagra Falls. That's exactly what you're doing when you tell yourself countless times a day "I just don't have enough money." Try telling a new story of your relationship to money. It might go like this: Money is wonderful. I love money. I love what money does for me and what I can do with a lot of money. Money is merely a symbol of the value I give it. And right now, I'm happy to spend money doing what I love doing, having fun, spending time with my family and friends and going places for pleasure."

It's that or pulling the covers up over your head.

Going from underearning to prosperity is the simplest thing to do. You simply take a look at what your old beliefs have been about money and change what you want those beliefs to be. Your putting a new frame around the picture. When I had an 18 year old dog and an 18 year old car with problems, I hit the panic button. I usually got angry at the car repairman and vehemently told him, he better not do more than is necessary, making another enemy in the process. "Oh, no, here she comes again," I could hear him mutter. Later, when I got that my thinking was not exactly ideal, I told myself, "Relax, this is what the prudent reserve is for" and wrote the check with enthusiasm. A week later, a check came in the mail which was twice the amount I'd paid for the car repair.

It's up to you. Look at money through a dimly lit mirror or see it in the bright light of truth.

The Numbers ~

Important little item, those numbers. This is where the pedal hits the metal.

Each day, write down all your numbers in a little notebook and record each penny you spend and each penny you bring in. Do that for a month and draft a plan for the following month based on the monthly outflow. This is pretty standard in most budgets, but get used to calling it a Financial Spending Account as the word "budget" has a limiting interpretation. Make it your other professional job. Get all your ducks in a row and have at the top of your list your rent or mortgage expense followed by all the utilities, food, gasoline and car insurance. There's no need to have a tv or internet if you're so far down and out that you can't see the light of day. There are libraries for that. And use of their computers is free. I had to use library computers for eight months until I could afford one.

Everything else on your spending sheet is gravy: clothes, haircuts, nails, taxis, dues, magazines, tv, massage. There will be another notebook separate from your usual monthly expenses. Here you will list the amounts owed your creditors, both personal and bank credit cards and/or the IRS. List the current interest rate, how much you've been paying and what the original amount was when you took out the loan. You won't have to deal with this until you have formulated how much you have available AFTER your monthly living expenses have been paid. The debt column(s) will get their time in the light of day once you determine how much is available to pay each creditor. It's a real simple formula, one you will recognize as the answer you've been looking for.

Record your numbers daily and by month's end you will have a better idea of how much you actually have to spend on the debt. For many of us, creditors were the first to pay, leaving us with no money left over for necessities. You won't be doing that again. Remember? It's on your timetable.

You are a warrior in the war against debt.

"To gain clarity, get rid of the fog and vagueness about your finances." ~ The Financial Genie

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