Recently, I asked my Debt-Proof Living members how they would handle an unexpected windfall of $10,000.
The results were fascinating, and they got me thinking: What response would we get if we changed the word windfall to expense -- as in, "How will you respond if tomorrow you get clobbered with an unexpected expense of $10,000?"
How we respond to financial challenges says a lot about our character. We can take cover and hide behind fear and denial, or we can bite the bullet, face the problem head-on and do what we have to do.
I read about a couple who bit the bullet when they sold their house and possessions and lived in their car for two years so they could pay off their debts. I don't recall exactly how they worked this out -- small details like showers and running water escape me. However, their delight with having done such a difficult yet noble thing to get their lives back on track was compelling.
Another couple, Ray and Liz, were living the high life in big-bucks Orange County, Calif., when they ran headlong into a severe economic downturn. Rather than rely on credit to keep up their wealthy image, they decided to bite the bullet. They sold their semi-mansion with its high-four-figure monthly payment and moved into a modest three-bedroom condominium in another community. As humiliating as it seemed at the time, the experience transformed their lives in such positive ways, they've made this downgrade permanent.
A New Jersey family made the agonizing
Difficult? At first. But as they look back now, they see benefits they had never anticipated.
They made sacrifices in terms of time and convenience because they had to deal with three schools, where before it was only one. The very things they feared in the public school system turned out to improve their children's education immeasurably. Now debt-free, they've decided to stick with the public schools.
I chose to bite the bullet the day I sold my car to become a ride-sharing passenger. Believe me when I say this was painful. But the financial impact of no car payment, no insurance, no maintenance and no annual registration eased the pain considerably.
For some, biting the bullet means canceling cable TV, brown-bagging to work or opting for do-it-yourself manicures. It might mean cutting up credit cards, firing the lawn guy and cleaning service or all of the above.
When financial problems strike, it's easy to run and hide. But it takes courage, commitment and a can-do attitude to figure out the solution.
Write to mary@everydaycheap skate.com or Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630.