Beating Broke

Personal Finance from the Broke Perspective

Have You Become Complacent with Your Gazelle Intensity?

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If you have tens of thousands of dollars to pay off, gazelle intensity can be exhausting. You can easily begin to feel sorry for yourself and lament all of the things you have to give up and sacrifice when paying down debt.

We started our journey to be debt free on October 20, 2011. Our debt was a mind-numbing $57,966.01. In the 7 months since then, we have paid down almost $10,000. (We are sitting right around $48,000 now.) I am proud of our progress, but we have reached the point where the journey is getting long and difficult. Gazelle intensity has lost its luster.

Mhorr Gazelle (Nanger dama mhorr) © by 5of7

While we have no intentions of adding any new debt, we sometimes want to slow down and enjoy life. I don’t want to work so hard all the time; I want to spend money on treats sometimes.

And just like that it happened. The lifestyle creep began. We had been not been spending any money on eating out, and in May we spent nearly $200. Yes, I don’t think that seems like gazelle intensity either.

My kick in the pants came when I read on Yahoo! that Joe Mihalic recently paid down $90,000 in student loan debts in 7 months. Seven months! That is nearly $13,000 a month. Intrigued, I read more about his story on The Huffington Post.

After he did the obvious measures of selling off his extra vehicle, his motorcycle and cashing in investments and savings, he went renegade and cashed in his $8,000 retirement. (We certainly have enough in our retirement to erase our debt, but I am not as young as Joe, and I wouldn’t be willing to pay the penalties. Most financial experts do NOT recommend wiping out your retirement to pay down debts.)

Then he made the hard sacrifices including:

  • Not having dinner dates the entire time he was paying down his debt (opting instead to take dates out for coffee and bagels)
  • Foregoing travel at Christmas to see his parents
  • Missing two friends’ weddings
  • Finding two roommates on Craigslist
  • Starting a side business as a landscaper
  • Not buying any new clothes
  • Shunning consumerism in general

He was full force gazelle intense, and it paid off. He, as Dave Ramsey says, “lived like no one else so later he could live like no one else.”

While we are generally frugal, we slip up and spend too much money on groceries and other expenses (such as our unnecessary trips out to restaurants this month). There is still some fat in the budget, and that fat can be cut and funneled toward our debt repayment. We still have room to improve.

Sometimes when you are tired and are immersed in your debt repayment, getting out of debt can feel hopeless. You can feel like the debt will never go away, and you can start to doubt yourself and the sacrifices you are making. In times of doubt, read stories like Mihalic’s to see that gazelle intensity does work. He made it through to the other side. You can, too.

Do You Let Television Affect Your Reality?

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Do you watch a reality show such as Storage Wars or Sell This House?

Perhaps you have watched Storage Wars and have seen some of the participants walk away with as much as a $5,000 to $10,000 profit.  (Of course some participants also have weeks where they lose a few thousand dollars on storage units, but we, as humans, like to be optimistic and focus on the units that make thousands of dollars.)  Maybe you watch a few episodes and think, “I can do that!”

Or, maybe you like to tune in to HGTV on the weekend and watch people renovate their yards and homes in their spare time or watch experts come in and make a home more aesthetically pleasing so it will sell faster as they do on shows like Sell This House.  You may begin to think about projects around your home that have bothered you—the old wooden kitchen cabinets that you wish you could brighten or modernize, the old worn out couch you would love to replace but can’t afford to.

The Benefits of These Types of Shows

These types of reality shows may help you make frugal improvements to your home.  Take that worn out couch—maybe you watch Sell This House and learn how easy it is to cover your couch with a slip cover and make it look much better.  Maybe you learn that you don’t have to spend $50 per window treatment; instead, you can go to Goodwill or a thrift store and buy flat sheets to hang on the window.  By watching the show, you are learning simple, frugal tips to improve your home.

The Problems with These Shows

© by Bosta

The problem comes when you watch these shows and they cause you to become dissatisfied with your current situation.  Maybe you never thought about creating a patio of pavers behind your house, but because you saw it on one of the shows and liked the results, you want to do the same.  You spend $500 to have someone lay the pavers for you and create your paver patio.  Supplies were another $200.  You have now spent $700 for something you didn’t even think of, let alone want, before watching the show.

Another problem is when you watch enough of these shows to think that you know what you are doing and will be able to replicate the success of the people on the show.  An acquaintance I know was dissatisfied with his job and quit.  His back-up plan?  Buy storage units and sell the contents.  The problem is that he does not have the expertise or the eye for valuables that the people on Storage Wars have.  He pursued this line of work for several months and lost quite a bit of money.  Now he is back to work in his old field.

These types of reality shows can be useful sometimes, but often, they increase your level of “want” or make you think you can do something you are really not qualified to do.  Remember, these shows are for entertainment purposes, and the chance that you will be able to replicate the success of the participants is slim.

Have you watched a reality show that made you think you could do something you couldn’t?  Did you lose money?

Invest in Yourself Instead of the Lottery

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Last week, the Mega Millions lottery reached an historic high of $640 million.  That is more money than most of us can wrap our minds around.  In the days leading up to the historic drawing, people everywhere bought tickets, some spending $20 or more on a lottery jackpot they had a 1 in 176 million chance of winning.

Put this in perspective—if you fly on one of the 25 safest airlines (based on safety records), your chances of dying in a plane crash are 1 in 10 million (Yahoo! Voices), which is 17 times greater than your chance of winning this particular lottery.  Likewise, according to the National Lightning Safety Institute, your chances of being struck by lightning are 1 in 280,000 (628 times greater than winning the Mega Millions), yet the majority of us don’t expect to be hit by lightning in our lifetime.

In the days leading up to the lottery drawing, when I expressed disbelief that some whose states do not sell Mega Millions tickets traveled out of state and waited up to six hours to buy the tickets, the romantics around me declared, “When you buy lottery tickets, you are buying the chance to dream.”  So, basically, lottery ticket buyers know they won’t win, but they pay to “dream.”

Mega Millions Lottery

I’ll dream for free, thanks.

Even if you do buy the tickets with the hope, the dream, of winning, do you really want to win?  Time and time again we hear of those who win millions and watch their lives disintegrate and sometimes tragically end.  Business Insider included the tale of 10 lottery winners who won big and lost even more.  Consider just a few of the stories:

-Jeffrey Dampier won $20 million in 1996 and he generously helped his family members buy houses and opened a gourmet popcorn restaurant to supply his family members with jobs.  Still, in 2005 he was kidnapped and murdered by his sister-in-law and her boyfriend.

-William Post won $16 million in 1988.  An old girlfriend sued him for half his winnings, and his brother hired a hit man to kill him.  Within a year he was $1 million in debt and filed bankruptcy.  He now lives on food stamps and $450 a month.

Unfortunately, these stories are not unique.  In addition to the Business Insider post, a quick web search reveals similar posts, “6 Lottery Winners Who Lost It All” and “13 Lottery Winners Who Lost Everything.”  In addition, TLC has a show called Lottery Changed My Life.  If you watch the show, you know that for the majority of winners, their lives were not changed for the better.

Many of us dream about what we would do with more money.  However, the best way to achieve the dream is not through purchasing lottery tickets for a multi-million dollar jackpot that we won’t win (even if you use the worn out argument, “somebody has to win”).  Instead, the best way to achieve that dream is through our own lives.  Dream about what you can do with your life, how you can improve it, and then set to work doing so.  That will get you infinitely further than buying a lottery ticket and paying for the right to dream.