Money Isn’t Evil, Debt Is – Entry 205

Dear Diary

The last we spoke, I wasn’t sure if Karate Kid would be coming home that night. We’d had a heated argument that morning and he’d disclosed to me that debt was the reason why he couldn’t think about proposing to me.

I had time to reflect during that day. I felt embarrassed for all the times that I’d told him ‘Debt is slavery of the new age’, ‘You know, debt is what controls society and keeps people in order’, ‘Debt makes people good employees‘, and ‘I don’t deal well with debt, it stresses me out‘. I stand by all these statements because I believe them to be true. I feel embarrassed about broadcasting them to Karate Kid as now with this new information I can see how insensitive they were.

The more I thought about it the more clues I could see. He never spent large amounts of money and was hesitant to do so (planning a holiday with me or preparing for his birthday later this year are two examples). He also hardly looked at his bank account, he couldn’t tell me how much his take home pay was (his excuse was that he never looked), he spent more time escaping reality through electronic games and going out spending money.

I think that he had tried to tell me a few times. He has said on multiple occasions that he didn’t work for a large period of time after graduating as he couldn’t find work. He has brought this up a couple of times when he has been trying to explain to an angry Anastasia why he’s ‘not ready‘. I thought that he was just embarrassed about being unemployed for so long and that he didn’t feel that he was thriving financially…..the second part was true, it’s just that I assumed that he was on a different part of the spectrum.

I decided during the day that it’d be best for me not to be at home when he finished work. It had been a heated conversation and I wasn’t sure if he was going to run away rather than disclose to me his financial position. I wrote him a note and then went out for a looooong walk.

The note that I left him read:

The Things I Love About KK

  • I love his smile
  • I love his laugh
  • I love his cheekiness
  • I love his patience
  • I love how passionate he gets about things
  • I love how he likes going out and living
  • I love how understanding he is
  • I love how he smells
  • I love his warm, firm hugs
  • I love how playful he is
  • I love how caring he is for his family
  • I love how comfortable he is with me
  • I love how intelligent he is
  • I love how dedicated he is
  • I love how hard working he is
  • I love how sexy he looks when he’s dancing
  • I love his hair
  • I love his skin
  • I love holding his hand
  • I love when he calls me honey, darling, snowflake and wabbit
  • I love the way he looks at me
  • I love when he makes me tea and toast
  • I love how he comes walking and cycling with me
  • I love that he accepts me as I am
  • I love that he still accepts me even though I don’t dance xxx style anymore
  • I love that he still wants to be with me even when I’m upset
  • I love that we have movies and shows that we watch together
  • I love his adventurous spirit
  • I love how strong he is
  • I love how masculine he is
  • I love how he socialises with others
  • I love that he wants a doggy (who’ll be named Foo-Foo)
  • I love how he is a humble winner and let’s me tease him the times that I win
  • I love his eyes
  • I love when he dresses up for me
  • I love how he makes the effort to be part of my world
  • I love waking up with him each day
  • I love how wise he is
  • I know he’ll be an amazing father
  • I love that he finds me attractive even though I’m not as in shape as I was when we started dating
  • I love how he still accepts me even though I have a small period every day because of the copper IUD for contraception
  • I love him because he is my cuddly raccoon 🙂
  • I love his nature
  • I love his resiliance

I then wrote at the bottom of the page that he needed to google a link to a video clip on a credit card debt challenge and “This is what we will be doing tonight”.

During my walk, Karate Kid sent a message. It was a relief because it said “Leaving work now. See you soon xo”. I was still 40 minutes away on my walk so it meant that he’d have some time to breath alone before I returned.


 

Dear Diary, I tell you everything (apart from identifying information, of course, haha). But, there is one thing that I cannot share with you because I made a promise to Karate Kid. That promise was not to disclose to anyone how much he owes. If this was completely anonymous I’d consider it, but I do have some close friends that follow. Let’s just say that my optimistic 6 to 12 month estimation before I did the math is actually looking more like 2.5 years (best case scenario) to 5 years depending on what steps Karate Kid decides to take.

That evening Karate Kid listed out every one of his debts. It had all started back in his university days when he took out a student loan to cover the cost of living. I can see how this could have happened as he wasn’t working and would eat out of home a lot because he didn’t feel comfortable being at home. Responsible Anastasia says that that is no excuse to take out a loan, but the Understanding Anastasia can empathise with his situation. Since that time though, he has made a series of bad choices when it comes to finance. Each of those bad choices was the decision to take out debt (=always a bad choice in my books).

I was taught from a young age that if you can’t afford it, don’t buy it. There are a limited number of things in life that you actually need. Everything else is because we want it. There’s a big difference between the two. I’m all for buying the things that we want – but only if they are easily affordable for one’s unique circumstances and don’t impact negatively upon dependents or basic necessities.

When Karate Kid gave me the list of debt I was shocked. A switch immediately flicked on inside me and I went into debt-attack mode. His debt was like a metaphorical enemy that I needed to disarm and then tear apart, layer by layer. My primary goal from that moment was to destroy it. This change in focus wasn’t by choice, it was primal instinct.

Debt is an insidious poison – it strips away your self-confidence, it erodes your sleep with worry and it shackles you down. Debt is slavery and it’s hard to see the light when it’s drowning you. Karate Kid had been burying his head in the sand for years because this beast had it’s claws around his throat making it hard for him to breath. I, however, was untouched as I make healthier financial decisions. I was in the perfect position and frame of mind to help.

Diary, have you heard the say: “Give a man a fish and he eats for a day. Teach a man to fish and he eats for a lifetime”? This was a perfect example of that. I could easily give Karate Kid money to help pay off some of the debt, but this wouldn’t be helping him. He needs to learn how to control his spending, how to calculate the repercussions of his actions and re-calibrate his views on the value of money (and what’s value for money). What better way to learn than by crawling your way out of the hole that you dug for yourself, right?

As his partner, I see it as my job to walk beside him in his time of need. He needs to walk the steps himself, I am just there for support. I will also shine the light on the path for him so that he is not blinded by the cloud of darkness that debt bestows upon those that it touches.

To help Karate Kid, I set up a spreadsheet. The spread sheet has each of the debts, the calculated monthly interest, the minimum repayments, hypothetical additional repayment scenarios and payout dates. It took a long time to fine-tune, but we got there.

The next big step was to test every scenario possible: what if we pay off debt A first? then C? or is it best to pay off debt B first? This again, too a long time, but we worked through every scenario and calculated that it’d take at least 4 years to pay everything off if he tackled them in a certain sequence.


The next day Karate Kid still wanted to bury his head in the sand. I was not ready to give up – I was just getting started. We went to work as usual, but that night more research was to be done. Whilst he was at his martial arts class I phoned a bank. They were very helpful. I discovered the concept of a balance transfer, where you transfer your credit card debt from one card to another bank. The second bank generally offers 0% interest for a set number of months and lower interest rates. I got the information I needed and then recalculated everything if hypothetically Karate Kid chose this option.

When Karate Kid got home we discussed it. He was reluctant and wanted to do more calculations. As I googled more debt attack options, he looked at his expenses. His car is almost ready for the dump, and so we discussed if comprehensive insurance was necessary. If he was involved in any accident his car would likely be written off and the amount that he’d get for it wouldn’t be much. He phoned his car insurance company and reduced the cover. The difference in payment he’d put aside in a new ‘car savings account’ that he’d set up to got towards his new car. Our backup plan if anything were to go wrong would be that he’d use buses, trains and taxis until he could afford a new car.

Karate Kid decided to drop his martial arts classes fees as well. He reduced his membership from unlimited to casual. He also spoke with his mother and decided to reduce the speed of her unlimited internet that he was paying for. This created more spare cash for him which I told him strictly needed to be used to pay off his debt per our plan.

He’d had enough for that night so we went to bed. I told him that the next day he would be calling banks to discuss his options. I also wanted him to set up a separate direct-debit account for his set expenses to come out of so that they weren’t coming out of his credit card anymore. This would meant that his expenses wouldn’t be accruing interest as he’d setup the account to always have sufficient funds in it. It’d also meant that his credit card debt wouldn’t get any higher.


The next evening Karate Kid was reluctant to phone the banks. He procrastinated long enough for us to miss out on talking to the one with the good balance transfer rate. So, I made him call his bank that he has the highest amount of debt with to discuss options.

Karate Kid got put through to a lovely lady, Harmony. She told him that he had the option of downgrading from his rewards credit card to a standard credit card. Karate Kid had no idea that he’d been paying extra and being charged at a higher rate (9% p.a.!) for years with this rewards card that he had……this wasn’t the bank’s fault, this was his for burying his head in the sand and not checking up on his finances regularly. We ordered the new card and the lower interest rate would start when the card was activated (this would take five working days to arrive).

During this time, we got his accumulated 170,000 reward points converted to cash to go back onto the balance of his card (~ 600 dollar only, but something). This would take a few days to be processed. We would activate the new card only once this money had come across as we didn’t want to lose the rewards money due to technicality that the old card didn’t exist anymore.

Karate Kid was becoming more relaxed. Before bed that night, I told him that he had two jobs to do the next day. One was to talk to his human resources department about accessing his leave and converting it to cash due to financial hardship. The second job was to call the bank and to see if they would lower his rate further or give him a few months of interest free (otherwise we were taking our business elsewhere).

I also told him that he shouldn’t have pre-paid for our tickets to the dance congress next year as that could have waited. If I had known about his debt I wouldn’t have allowed him to purchase them. I transferred him money for my portion of the ticket. I also told him that he shouldn’t have gone this year as he wasted money on the accommodation, food and the ticket. That money could have been put towards paying off his debt. Next year it could be a reward once he had things under control.


The next day, Karate Kid came home from work deflated. He had spoken with his human resources department and was embarrassed to admit his position to his friend who served him. His friend gave him information to go away and read. He warned him that leave money would be taxed at a higher rate as it’d be a large sum. I told him that if it saved him 6 months of debt that he should seriously consider it. Besides, if he did use the leave instead of cashing it in, he wouldn’t have money to be able to enjoy the time off anyway until he got the debt under control.

Karate Kid was also upset because the bank was very unhelpful. They calculated his financial position and told him that he wasn’t able to access any support from the bank. He wasn’t a rock bottom. This disheartened Karate Kid a lot and it enraged me more. I made a mental note that this bank would not be the one to get a home loan from.

We did more calculations that night with the reduced interest rate on his new card that was yet to arrive. We also called another bank about the 0% balance transfer option and got more information. I also called another bank to see if Karate Kid qualified for work benefits that I was getting through my employer – bonus interest rates and waiving of bank fees. I was sure that he qualified as well. The person on the other end of the phone was useless though, so I sent my inquiry via email.


The next day was Saturday. Karate Kid wanted to relax but I couldn’t. There was work to be done. I wasn’t satisfied with the conversation that he had with the bank the day before. This time, I’d also be on the line asking questions.

We role-played a script on what he’d say to the bank employee. We role-played three times to get his tone and conviction right. We waited on hold for 20 minutes before someone attended to us. Karate Kid became emotional quickly and started shaking when the bank employee went into their general unhelpful spiel. This is where I took over. He wasn’t in the position to be having this conversation. He was visually upset, just like you’d expect a cornered and frightened animal to be like. This made me even more determined to get what we wanted.

We were transferred between four different departments. I was very polite with each unhelpful staff member. They kept referring us to the hardship department, but we had just been assessed and were again told that we didn’t qualify as Karate Kid hadn’t hit rock bottom. I told them that we had no intention of getting to that point. When we got to the fifth bank employee, I told her that we had spoken to multiple people that phone call and that we simply wanted three things: To have a reduction in interest rate, the waive the annual fees, and to have a few months interest free like a balance transfer would offer. The last lady was sympathetic to our situation and refunded Karate Kid’s annual fee from December. She listened to our concern and wholeheartedly apologised that the bank employees were bound by tight business rules. The bank was the one that was inflexible, not the employees. We thanked her and then ended the call.

On the bright side, we were now convinced that there wasn’t anything more that that bank could do for us. Also, he made 60 dollars from the call! We were making small wins all over and he was headed in the right direction.


Sunday, I made Karate Kid set up itemized transfers for his expenses into his new expenses account. He also phoned different companies to change his payments from credit card to direct debit. I also asked him to set up a ‘spending’ account that he could put money in that he could freely spend.

Karate Kid was becoming more and more confident. He was gaining trust in what advice I had to give and was seeing results. I’ve told him that he should challenge himself to weeks of ‘not spending’ and see how much money he can save. This week he decided to trial it. I found an App that he can download from a Government website that helps keep track of spending. He hasn’t downloaded this yet, but it’s on my to-do list for him.

On Monday, we got confirmation that he would qualify for the employee benefits if he changed to my bank. He submitted a request to open an account. We are waiting for it to be approved.

This week, the rewards point cash-back and the annual fee refund appeared in his account. The new card has arrived and he has activated it. Karate Kid is looking at his bank account each day and it feels that he is much more confident, not hiding his head in the sand ignoring the problem.

Our next step is to open up duplicate accounts with the new bank and then transfer everything from the old bank over (including his fortnightly pay). The credit card will stay at the old bank until we decide what to do with it. Now that things have improved and we are waiting to see how much extra cash he has spare to put towards his debt, we may not need to go to the 0% option. He may be able to pay everything off in 2.5 to 3 years.

Our next few steps will be calling the other institutions that he has debt with to see if they can make any improvements for us.


Some of my friends have been asking me how I feel about Karate Kid. They are saying that his debt is not my problem and that I also need to consider my needs, desires and future.

I do appreciate their thoughts and concerns a lot. At the moment, I’m not craving commitment or a family of my own. This surprise debt bombshell has blindsided me and I am fixated on eliminating it. Like I said before, it’s instinctual. A great analogy is like a pimple that needs popping, this disgusting debt needs to be squeezed until all the puss comes out. Only then will I be at peace.

I know I could just walk away, but I don’t want to. I don’t feel the need to go. I am fine staying and offering a helping hand to someone that I care dearly about. I would hope that someone capable of helping me would do so if I was in a time of need. I’m just doing what I need to do.

Diary, I don’t know how I will feel once the situation is resolved. When it’s time to have those hard conversations again, we will. But for now I am on a mission.


Mr Nice Guy’s housemate has contacted me a few times asking if I need to talk. I think that she’s hoping to convince me to date Mr Nice Guy. He is a nice guy and he has offered a shoulder to cry on if needed. I can’t tell them why I need to stay at the moment, but I just tell them that I’m fine.

Dance Teacher is also trying to convince me to do his choreography course. He knows that Karate Kid and I were breaking up last weekend. He told me that he won’t choose sides as he’s friends with us both. I told him that I’ll think about the course.

The Spaniard sent me a video clip of a dance performance that he was in recently. He didn’t say too much, only that he wanted me to see it.


Another minor update before I sign off. Last weekend I had pain in my left breast. It has been niggling away for a few months and it was at the point that I was concerned enough to do something about it. I hadn’t told Karate Kid about it to mid this week when his finances were more under control. He told me that he’d stand by me and do whatever I needed him to do if it turned out to be the worst. I had tears in my eyes and I lay cuddled up by his side in bed. The thoughts that came to my mind were “I’m not ready to leave this yet. I don’t want to go”.

I booked myself to see a Doctor this week and she sent me to get an ultrasound. I told my boss what was happening and they were happy for me to leave work during my break to get the ultrasound done the same day. At the clinic they asked if it was urgent….I said yes…haha, this meant that it’d be reported on within a few hours. I then went and saw the Doctor again after work and was told that it was likely a cluster of cysts, not cancer. I need a repeat ultrasound in two months to check for changes. It was such a relief. I still have a little bit of anxiety about it, but we will see how the next check-up goes.

Anastasia xo

 

IMAGE: [JANA GUOTHOVA]© 123RF.COM

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