I’ll start today with a little history lesson.  See that picture to the left?  Well, that is a picture of the Philadelphia County Prison in Philadelphia, PA called…the debtor’s wing.  This wing and others like across the American colonies in the early 1800’s, held people that owed debts but were unable to pay.

It was a very simple process.  Creditors who were owed money would simply ask the sheriff to arrest those that owed and throw them in jail.  The only way the debtors could be released was to post bail or pay the debt.  Since most couldn’t do either, they remained in jail for months or even years depending on the size of the debt and their family’s ability to raise the money.  Some even died before being released because of disease that ran rampant in the close quarters of the jail.

In 1831, the United States government ended this practice with the introduction of the Act to Abolish Imprisonment for Debt.  Whew!

Now almost 180 years later, most of us spend our time creating our own debt prisons.  No, we don’t have to worry about going to jail (except for taxes or child support), but it’s a jail all the same.  As Jon Hanson said, “Working while carrying a load of debt is like a prison work-release program.  You are released each day to work, but the balance of your time is spent in a mental prison.”

Over the last several years, we have really seen the effects of debt.  The lives of normal families that were living the American Dream shattered due to the carelessness of creating debt instead of wealth.  As I see it, living in a constant state of want leads to us becoming a prisoner to our passions.

Work no longer becomes a privilege, it’s a necessity in order to survive.

Think about the feelings you had as a child…probably “free”.  Yes, the responsibility of provision was upon your parents, but there was a feeling that time was no option and your opportunities were limitless.  Becoming an adult was like being given a huge stack of blank paper that weighed about the size of an elephant.

We aim wanderously, happily spending money and using credit when we really shouldn’t.  Most of us don’t even realize what we’ve done until it’s too late.  Picture this…you sitting down on the floor “Indian style”.  Now, add up all the debts you currently owe (credit cards, personal, consumer, student loans, etc).  Imagine yourself being surrounded by this amount stacked in dollars.  If you stand, can you see the outside world easily?

See, those few moments of fun have a price tag attached.  That price tag then leads to frustration and unhappiness.  So before you make you next purchase, ask yourself… “Is this helping me to get closer to my goal?”  If not, make the decision to walk away.  Just turn and walk away.  You can do it!

If you’re in a debtor’s prison, what’s your sentence?  How long do you have before release?

Philadelphia County Prison Image by whitewall’s buick

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Thanks everyone for reading!  I really appreciate it.  Feel free to share your own experience with debt in the comments, if you’d like.  So until next time…

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Today, I want to discuss a question that was sent to me a couple of weeks ago by a reader.  Shortly after the launch of this site, she read all of the information and seemed excited about the possibility of being able to take control of her financial situation, but couldn’t see how it could be done at this point in her life.

From a windfall of circumstances which included marriage, a child, lifestyle choices and poor career decisions, she and her husband have found themselves in a place where they pay more in bills than they make on a monthly basis.  Her email to me ended with the following statement:

“I think the envelope method is great, in theory, but what if there is nothing but air to put in it.”

This readers concerns are not unique.  Her concerns are more common than we realize.  It’s very easy to manage money when you are single, but when mixing marriage and children, the whole equation shifts and changes.  You are now responsible and accountable to and for other people.

The answer to her question is not an easy one.  Firstly, I don’t know all the details of her financial situation.  Secondly, it’s going to take the efforts of both she and her husband to work EXTREMELY hard to get through this.

I’m embarrassed to say that after a few emails back and forth, I gave her quick advice.  The advice was to create a second source of income and/or sell some things.  I thought that our emails would continue and I would offer additional advice once I got into more of the particulars, but she didn’t respond to that final e-mail.  This has left me concerned and wondering if she has been able to find clarity and hope in her financial matters.

So, this is my second attempt to connect with her and offer a light at the end of the tunnel.  My desire is that she and her husband start working now to achieve financial peace.  The initial advice I gave really does not change,  but I’ll be more detailed and offer other suggestions as well.  They are listed below…

1. Create a budget.  I feel like a broken record with this point, but a budget is the cornerstone of creating financial peace.  You have to be able to see where your money is going and eliminate wasteful areas.  Once the budget is created, stick to it.
2. Stop using all forms of credit and create an envelope system using cash.  This will be for incidentals such as gas, eating out (if at all), grocery shopping, etc.
3. Be creative with finding a 2nd source of income.  I do understand that we lead very busy lives, but in order to create this freedom it’s going to take some sacrifice for a short period of time.  I repeat, not forever, just a short period of time.  Look online and find legitimate and realistic suggestions for creating additional income.  From her e-mail, I can assume that she and her husband are well educated.  Some possibilities to consider would be tutoring, teaching online courses, etc. It may not be possible for both of  them to work extra hours because of their child, but the extra hours/income of one can help to start the process. 
4. Consider selling some things through EBay or local consignment shops.  Both of these types of stores exist all over the country now.  Call around locally to see how the process works and if this can be a match for your needs.
5. Make some lifestyle adjustments.  Are there any extras that you all can do without at this time to minimize costs? No amount is too small.
6. Take the deer by the horns.  What does this mean?  I’m not sure if your husband is willing to become financially stable.  Take the lead, create a plan and suggest using the plan (with excitement).  Let him know that you are concerned as well as frustrated about the present financial state.  Then, show him your motivation to change it.  Believe it or not, excitement and motivation are contagious.  Showing him how one sample plan can work may be enough to get him inspired.  The two of you working together can accomplish all of your goals.  

I know that this information is not the microwave get out of debt quick solution, but it does offer a starting place.  If you can just get the process started, it’ll be a lot easier to continue. 

Just remember that life is a journey and we all have our lessons to learn.  I’m cheering for you and hope that you will find some conciliation in the recommendations I have made.  Have faith and refuse to believe that your situation is permanent, because it isn’t.  I’m reminded of a quote by Napoleon Hill, “Whatever the mind can believe and conceive, it can achieve.”  Once you both decide that becoming debt free is something you want to do, your minds will become clear and open to “how” you can achieve it.

I wish you guys the best!!!  If you are reading this, please feel free to contact me again.  I promise I will do everything I can to offer better solutions!

If you have a question you would like to ask, please feel free to do so by clicking on the “Ask A Question” link to the right.  Don’t forget to subscribe via RSS or E-mail to receive updates from this site!  If you have already subscribed, I want to say thank you.  This website is becoming a success because of you and your support.  I send you much love!