by Randy Dyess
Both Mark and Kelly spent the rest of the afternoon playing with the kids before Mark had to start dinner. He wanted to cook on the grill tonight since he needed to start practicing his cooking before the big Memorial Day party. Mark seasoned the hamburgers and fired up the grill while Kelly made French Fries in the oven. Everyone loved the meal and Mark wondered why they hadn’t done this more often in the past. He thought the taste of the burgers was better than any they had eaten at all those restaurants. After dinner, the kids went upstairs to watch a movie in the media room. Mark and Kelly returned to the laptop to see what had happened from their mass stock sale. Mark looked over the numbers and turned around and said, “Well, we didn’t clear enough to pay off everything. We did clear enough to pay off all the debts besides the house, but we don’t have enough in stocks to tackle the house as well. It looks like if we pay off everything else we would wind up with about $80,000 left. That is nothing to sneeze at, but it is not a total break from our debts because of the house. We can decide if we want to pay down the house payment or put it back in savings to help us out when things do get bad.”
“If we do pay off everything but the house, how much a month would it lower our monthly income needs?” Kelly asked.
“We were only making minimum payments on everything so it only takes us down about $1,500 a month. We would still need to cut out another $5,000 a month or so to get us down to the 50% we agreed on.”
“That’s still a lot. How do we cut out the rest?” Kelly thought to herself before coming up with the answer. “If we cut out almost all the luxury spending we found after going through our bills. Reduce our food budget by eating out less and grilling more great hamburgers. And cut back on some of the kids’ activities, how much would it take out of our monthly income requirements?” Kelly asked.
Mark thought for a few minutes, looked at some of his spreadsheets and responded, “That would about get us there. Do you want to really cut out all the kids’ activities?”
“Not all, but if we spend more time with them, some of the money we were spending to entertain them would go away. I think a few activities should still remain, but not just throwing money at something so they will be busy until we got home. I don’t think either of the girls liked playing basketball last year, nor do they enjoy the piano and violin lessons either. Those are something we wanted them to do and not something they asked to do.”
“True. We should also cut out another $500 if we cut some of our utility bills down. I mean, we have the maximum cable package for every TV we own. How much do we watch TV and how much do we watch it in our room or do the kids watch it in theirs? We should cut those out and reduce the package for the remaining sets in the media room and down in the den. We should also cut out the one in my office since I don’t ever use it. I get my news off the internet.”
“Why don’t we look back at the list we came up with and see what else we can reduce? It wouldn’t be like we would miss most of those things we don’t really use every day.”
Mark and Kelly looked over everything and did find another $500 or so they might cut without affecting their daily lives. They had taken the premium packages on everything because it was easier to order than try to figure out what they needed. Mark noted the lease on his car would soon be up. Instead of leasing another “mid-life crisis sports car”, they should think about using some of the left-over stock money to purchase a solid, family car. That would save them another $500 or so on monthly bills. He knew he would have to replace any car he bought. He hoped he would have time to adjust better by then and go back to lower car payments in the future.
They both got caught up in what they were doing and around midnight, Kelly said, “That wasn’t as hard as I thought it would be. I thought it we would never be able to reduce our monthly expenses to meet our cutoff.”
“Well, we were lucky,” Mark said.
“How so?” replied Kelly.
“Well, for one thing, we spend a lot of money each month on crap we both thought we needed. We were only doing it so we would look good in front our friends by having that and doing this. Trying to keep up with everyone else was just wasting money on stuff we didn’t really need or use.”
“I can see that,” Kelly said. “Let’s try to make a pact to limit what we spend. If we must buy something, it has to be an absolute necessity. Nothing we think everyone has and we need to have one just to keep up. No more credit card purchases or loans for anything we can do without. I can point the finger solidly at me. $60,000 for new furniture when the old furniture wasn’t that bad? I wanted to buy the new stuff because everyone else thought we should have furniture from some new designer and everyone claimed they had it. To tell you the truth, I really don’t like some of it because it is not really comfortable.”
Mark laughed, “Not only is it not comfortable, some of it looks weird too.”
Kelly smiled. She now knew she was foolish and wasteful when she bought the trendy furniture. She also knew deep down, all she wanted was something comfortable to sit on and relax.
“Another thing which made us lucky,” Mark said referring to a point he made earlier in the conversation, “we actually had a lot of money invested in stocks. Most people don’t have anything outside of their 401ks, if they even have that. Taking advantage of the stock purchase plans and buying stocks on those little tips we’ve gotten over the years has helped us out today. Don’t get me wrong, I’m not happy we dipped into the kids’ college funds. I don’t think those stocks would have been there anyway by the time the kids needed them. That money would have been gone in a few years anyway.”
“What would we have done if we didn’t have those stocks?” Kelly commented.
Mark thought about the question for a minute and started listing off things he came up with. “Well, we might have still reduced our bills by knocking out luxuries. I would have gotten a much cheaper car after my lease ran out. We would have spent less money eating out by either eating at one of your restaurants or cooking more at home. Those dollars would have gone into paying off our debts. Also, we should have used any bonus money and tax refunds to pay down debt instead of spending money on new things. We might have made a big dent in the debt, in a year or two, even without the stock money, if we put our minds to it. I might have even looked into something I could do online to make a few extra dollars. Some of those tech guys make money with web sites. I think I’m smart enough to do anything if I could figure out what to do in the first place.”
“Ok. Explain how you would have started paying off the debts without money in the bank.”
“I would have listed out our debts and ranked them by interest rates, amount owed, monthly payments, and if there were any annual fees. Then I would have started paying of the ones with lower balance but with high monthly payments, high interest rates, or high annual fees. Once some of those were paid off, I would have used what we spent each month on those accounts and any additional money to make my way up the list. It might have taken longer than it will now, but eventually we could have done it.”
“Thought that one out earlier did you?” Kelly chuckled.
“Yeah. I forgot to mention the first thing I would have done was to take all the cards, checks, debit cards and locked them up or shredded them. Just like we will be doing now,” he said with a smile.
Mark looked at Kelly to make sure she understood his suggestion. “I would have also brought up selling the house and moving to something smaller with a lot less monthly taxes and home owner’s association bills. That alone would have gotten us a long way towards our goal.”
“Why don’t we look into everything tomorrow? It’s almost one o’clock and we still have to get up and take the kids to school tomorrow,” Kelly said as she let out a big yawn.
“I’m with you kid. Do you know we didn’t do our nightly drink tonight?”
“That’s ok,” Kelly replied. “We spent the whole day together and that means more to me than spending a few minutes together sl
ogging down a glass of wine.”
Chapter 8
As Mark lay down to get some sleep, he found sleep would not come. He ended up spending most of the night tossing and turning as he thought about the last few days. It had been a very emotional week for both of them as they faced something the vast majority of Americans refused to believe. They had confronted the fact the lifestyle everyone was led to believe they desired and was their right as Americans, was coming to an end. Human nature in America was not to be proactive about something and most Americans would not make slow changes over time to adjust to an upcoming situation. Americans lived a “wait until the last minute and get it done” culture. If you made a certain amount of money, you were supposed to live a certain way. People could not understand why someone would voluntarily choose to live below a certain lifestyle if they made enough money to do otherwise. Anything below their expectations would cause them to question what was going on. It didn’t matter if you were trying to live a lifestyle which could be maintained after you retired or not. It also didn’t matter if you did not want large amounts of debts or not. You were supposed to spend your money on this dream lifestyle everyone had in mind. You were also supposed to live on credit so you could spend more and live one or two steps above what you could afford. No one would admit it, but most Americans lived way above their means and that was the way companies wanted things. Thousands of advertisements convinced the gullible public they needed all the useful, entertaining, or latest products purchased with any credit card. Mark couldn’t remember where he heard it, but it was said the most dangerous thing to the American economy was if Americans started living within their means. He didn’t know if it was the most dangerous thing, but he believed it was up there in the top five.
Americans are also not supposed to worry about the future. They’ve gotten to the point they think the government should do all of the worrying for them and take care of them when they could no longer work. After all, isn’t that what we pay taxes for? Mark and Kelly lived day-to-day like everyone else and never gave their future much thought. They believed retirement advisors were on your side and watched out for you. Trusted financial advisors knew what they were talking about and if an investor followed their investment advice, they would be set for future retirement. Mark always joked when someone asked him about his retirement plans and would say, “I thought everyone was supposed to open a vineyard when they retired. That is what all those TV ads tell us to do.” This would cause everyone to laugh, but Mark always believed more than one of them actually had that goal as a retirement plan. It wouldn’t matter if the person scrimped and saved for years or if they made a lot of money. “If they could do it, I can do it” was the attitude of many people Mark and Kelly knew. Not that they spent much time planning something like retirement on a vineyard. It was just supposed to be there. To Mark, Americans have been trained since birth to trust those in power without question. Doctors knew best. Teachers knew best. Politicians had your best interest in mind. You could always trust law enforcement to do what was right. FBI and other federal officers were beyond reproach. People were not supposed to think for themselves, they were supposed to go along with the flow and everything would work out in the long run. Mark realized early in the morning, the only reason they even had money in stocks was because he wanted to buy a boat. He was not planning his retirement.
As Mark lay there, he realized most of what he had been taught to believe in by his parents and grandparents was no longer true in today’s America. Politicians were out for themselves or wanted to get rich from their time in office or amass enough power to give them the illusion they ran the world. Those who ran American government departments would often put the countries best interest aside to grow their own departments and increase their own power base. Often this was because they were not following the wishes of the people nor even the current administration. They were following their own desires, beliefs, and agendas. Most of this Mark felt he could tolerant since he didn’t see how it affected him day-to-day as politicians have always been egomaniacs. He knew time would catch up with them and they would retire and go away so the next egomaniac could take over.
As he did more research, he became convinced the American people were being lied to by a large variety of what used to be trusted sources. Major media did not often report the whole story and often omitted important news because the news didn’t fit their agendas. Politicians were becoming more radical and polarized and were passing laws they said was for the “people’s benefit” but those benefits never came about. More often than not, the only real beneficiaries to the bills were large corporations or the politician’s political party. Nothing politicians did ever seem to make it down to average people like Mark and Kelly. They were rich enough not to benefit from social programs, but poor enough not to benefit from the large tax breaks and other benefits wealthy people enjoyed. Like many middle-class Americans they were stuck in the middle and bore the brunt of keeping America afloat without anyone in the government on their side. Liberals bypassed them because they were not poor or minorities. Politicians bypassed them because they were not wealthy enough to have influence or give heavily to their campaigns. This led Mark to believe he and Kelly were like most middle-class Americans in the fact they were a disenfranchised class of Americans who worked for everything they had. They were taken for granted by both sides of the political spectrum and did not have anyone looking out for them. He came to the conclusion he would have to bury decades of training by his parents, his grandparents, teachers, politicians, and the American media. He could not believe anyone would be around for his family in their time of need. As he lay there, he understood he would need to build a system to would allow him to take care of his family without the benefit of any government. He could not count on the government at any level to step in and help him out. In fact, Mark began to think he would have to work out ways to avoid the government in the future. They would become a hindrance more than something he could count on. It bothered Mark he had gone way beyond his normal ways of thinking. He had started to think things would get much worse than he originally thought as his belief in the American government slowly slipped away during the night.
Mark would make up his mind things were going to fall apart and the other part of his brain would kick in. This part of the brain would convince him he was crazy for thinking those thoughts. Was he harming the future of his children by not giving them as much as everyone thought he should? Wouldn’t they get left behind if they didn’t go to private schools and Ivy League colleges? Wouldn’t they get left out of everything if he and Kelly cut their way of life down to what they were planning? He didn’t know and the two sides of his brain continued warring with each other all night long. Mark finally gave up and got out of bed at around five that morning and was surprised Kelly popped right up after him. “Sorry, did I wake you?” Mark asked.
“No, I haven’t been able to sleep all night. Things just keep going round and round in my head.”
“I’ve been up all night as well. I’ve been thinking about what is happening and what we have been planning over the past few days. The family and friends part was easy, but I’m still worried about the financial part. My brain keeps telling me we are not doing enough to protect ourselves for what is going to happen in the future. That part was warring with the part of my brain that still thinks I’m crazy for even believing in half of what I do. I begin to believe things will get much worse than I had thought it would. Then I start believing we are harming the kids’ futures by doing what we are planning. I don’t know if I am starting to believe things now because I was not ready to believe them earlier. I don’t know if that is the case or if I’m starting to act like some crazy, nut-case. I’ve spent all night wondering if things will fall apart and we will find ourselves living in some kind of third-world nightmare.”
“I know. Same thing here. Let’s get some coffee and try to figure out where we are going.”
After making some
coffee and filling their cups, Mark and Kelly walked out to their patio and sat down. “Ok, spill it,” Kelly said.
Mark looked at her and started trying to explain what was going through is head. “I’m pretty sure what we are doing is the right thing to do. I’ve got this nagging voice in the back of my head keeps telling me I’m giving up and my family will be the ones to pay the price. I keep thinking about Cheyenne and Dakota missing out on things as they grow older because we decided to step back from our lives and simplify things.”
“I had the same thoughts all night but then I started thinking that we didn’t have all this stuff when we grew up and we turned out fine.“
“Maybe, but things are different today. We didn’t have a lot of the same stuff back in our youth that’s available to kids today. When we were growing up, you had to be rich because normal people didn’t have the opportunities or money to own the unnecessary items everyone owns today. Credit was not used as much as it is today and because of this, the pressures on kids to have expensive things were not around like they are today. We had pressures, but I don’t remember ever harassing someone because they didn’t have a $200 pair of pants on or carry a $500 phone. People didn’t own the same amount of goods they do today.”
“You mean everyone didn’t OWE as much back then as today. Remember, you convinced me we do not own anything and I bet all those other people are just like us and John Anderson. Nobody owns anything anymore. It’s all an illusion and people are behaving like the government and borrowing so much money today they are going to suffer in the future. Because people our age haven’t started to retire yet, no one has found out they owe too much money to actually retire to the good life. We are the first generation who is going to have to retire on social security, plus our own investments and not a large pension from the company we work for. Retirement age will not be something decided by the company, it will determined by the age you can start pulling your savings out without additional penalties.”