August 1995

Get Out of Debt!

Why is debt such an important issue? Statistics reveal that 80 percent of people who divorce do so because of financial problems and they will do so again within three years of remarrying.

Similarly, the same percentage of people who go bankrupt will repeat the process. People should avoid such financial and marital disaster by getting rid of high-interest debt that causes an enormous stress.

Step-by-step actions to take: Sit down and make a list of all current credit card debt and the interest rate of each card. List the highest interest rate card first, the next highest rate second, and so on. Then list all other loans, such as auto, boat, furniture, student loans, business loans, mortgage, etc. Once you have a clear picture of your debt situation, you can create a written plan to start eliminating these debts:

1. Start with credit cards. These are the most burdensome because of the higher interest you pay compared to other types of debt. Stop adding purchases to your credit cards. If you don't have the cash to pay for the item you want, wait and save until you can pay cash. For some, this will be an exercise in discipline that may well be overdue.

2. Try to consolidate all of your credit cards into one low interest rate card. This is done by applying the lowest rate card that can be found. Once you've received this new low rate card, transfer your existing debt from the remaining cards to your new low interest rate card. Once you've accomplished this step get rid of the old, high rate cards. Call each credit card company, asking them to close your account. Make sure they record it on hour credit report as "closed by the consumer" so it doesn't appear so though the credit card company closed your account because of late or delinquent payments.

3. Take the amount of monthly payment used to pay off your credit card and now apply that to your next highest interest rate debt. If this is a car loan, adding this amount to make extra principal payments each month will speed up the process of getting rid of these debts. Do the same thing once the car loan is paid off. Apply that total monthly payment to your next debt.

Key money ideas:

1. Learn to discipline habits by living within your means.

2. Save at least ten percent of everything you earn. Pay yourself first.

3. Spend smarter; learn to cut costs in the following areas:

a. cut credit card spending;

b. eliminate debt on consumable and depreciating items such as cars, furniture, expensive clothes, eating out too often, expensive vacations;

c. cut costs by getting the right type of insurance; term versus whole life; raise your deductibles; and eliminate duplicate insurance on automobiles.

4. Before taking on debt, stop and consider the consequences.

5. Strive to become the lender instead of the borrower.

6. The only good use of debt is to create wealth.

Source: John Polsene, MARRIAGE, May 1995

Crisis Mode Shrinks Your Heart

When you're in crisis mode (and most Americans are), you skim the cream of your life right off the top into the garbage. Find out how to stop your shrinking heart.

Crisis mode living is when you spend every waking moment of every day trying to figure out how to keep all your balls in the air and all your plates spinning.

In crisis mode, you keep running faster and faster, from project to project, deadline to deadline, quota to quota, meeting to meeting. Your RPMs creep higher and higher until you hit the red line.

Most active people have to spend a certain amount of time in crisis mode. The problem arises when you spend too much time in crisis mode. That's when crisis mode goes from being a season of life to become a way of life.

When that happens, you start doing the only thin you can do. You economize. You shortchange your investment of energy in certain areas of your life so you can invest it in other areas--usually in the performance-oriented areas to which your self esteem is tied. In every other area of life, you become a miser: you hoard your energy, you engage minimally, you touch superficially, you slide along the surface, you skim.

1. First, you skim in relationships. The bond with your spouse, which used to be strong and intimate, becomes increasingly weak and distant. You hope your spouse doesn't have a serious need because you don't have energy to deal with it. You hydroplane over conflicts. You put bandages on serious problems. You resort to quick fixes and pretend things really aren't so bad.

2. You also skim with your kids. You don't keep track of them too well anymore. You no longer know what is going on in their lives. Little signs of trouble grab your attention, but you push them out of your mind. Warning flags wave, but you turn your head. You don't have the energy to face them--not now, anyway. Maybe tomorrow. Or, maybe they will just go away.

3. Your friendships, which used to be so deep and accountable, are now characterized by shallowness. Your casual friendships don't even exist anymore. Pretty soon, nobody has access to you, because you are so busy juggling and spinning.

4. You start skimming emotionally. You find that your anger is flaring up more than it used to, but you don't take time to figure out why. You no longer pay attention to feelings like hurt or sadness or guilt. You become a mechanical soldier: you just keep marching, doing what is necessary, and stuffing your feelings deeper and deeper inside. If you knew that those stuffed feelings were huddling together and planning an emotional insurrection that would one day scare the daylights out of you, you might pay attention to them. But you don't know that. Besides, you don't have the energy to go peeking under stones and trudging through the sticky muck of your emotional life. You don't have time to look inside.

The emotional depletion that results from living in crisis mode eventually produces a shrinking heart. This is a heart no longer sensitive to the needs of others, a heart that has lost the fire of compassion. The hearts of people in crisis become shriveled and weak.

But getting out of crisis mode is only the beginning. Reorganizing our lives and establishing a more manageable schedule opens time for a trickle charge, like a car battery. But then we need to discover the specific activities that can provide the charge and replenish us emotionally. We need to incorporate into our schedules the forms of recreation that truly do "recreate" us.

Work-Place Talk

In her new book Talking From 9 to 5, Deborah Tannen explores the male and female communication styles in the workplace. We need to be aware of these differences and their impacts--not only for issues of sexual harassment and gender justice, but for teamwork and productivity. A major point in the pattern of verbal and non-verbal rituals in talking and listening--is that males and females use different techniques to express themselves.

Men often kid and joke around, often to the point of using a "Can you top this" game of one-upmanship. This approach gives men the perseverance to succeed. Women often see this oppositional style as hostile. A steady diet of put-downs and teasing or "win-lose" stories can build defensiveness and lower self-esteem in men or women. Over-emphasis on competition between employees may kill cooperation, teamwork and efficiency.

Women, on the other hand, focus more on each others' feelings and often try to empathize with the concerns of the other. They talk about children's issues, friends, spouses, what is going on at home, etc. Women more typically emphasize connecting, sharing and cooperating--more of a "win-win" and never a "lose-lose" style. While they may promote greater teamwork, over-emphasis on cooperation can produce indecisive leadership and recommendations produced without critical consideration.

While not all men or all women fit the stereotype all the time, appreciating differences helps co-workers understand and bring out the best in each other. Flexibility in communication style helps attain the benefits and avoid the deficits of either style. This can produce synergy in the workplace, for the greater benefit of all.

Herbert G. Lingren, Ph.D.

Extension Family Life Specialist