For this month's Marriage & Money post, I so lovingly asked Joe if he would like to contribute and share his passion with all of you. I thought this would be a genius idea because he is very knowledgeable about money and getting out of debt and it's something that he really loves to talk to people about! He even came up with a great idea for a post the other day, and I think it only took him twenty minutes or so to write last night, I was impressed because the post is awesome! Apparently he's not so thrilled about me "forcing" him to write this post because the subject line for the e-mail that he sent to me said, "I'm sleepy...don't make me do this ever again...and put your laundry away." (Guys, I put my laundry away less than a week ago, so for me, a few days worth of clothes is nothing!) Oh, and in case you missed it on Instagram and are really confused about what's going on with the whole laundry pile analogy in this post, let me give you some back story in the form of pictures. This happened at our house over the past couple of weeks:
So without further ado, here is my husband!
Amberly shared with you last month our adventure getting out of debt. I have a slight OCD problem with tasks. When I do laundry I almost always put the clothes away right when they are done drying, unlike Amberly, who is perfectly fine with moving these heaping piles of clothes throughout the house as she "cleans". I don't understand how moving one mess from one room to another is classified as "cleaning".
(Can I cut in here for a second? I don't just "move" my messes. If I'm cleaning the kitchen and there is something that belongs in the bedroom there, I'll take it and put it on my bed to deal with later and then go back to cleaning the kitchen. He calls it cleaning ADD, but I call it finishing what I started. Ok, that is all, back to Joel!)
As much as I tease and many can relate to doing something like this, it really pains me when this happens in finance.
In the world of Joe's mind, a red number (or debt) on the bottom line of our budget will always connect with all of the other bottom lines. For example, a car loan, credit card, and student loan will all have lines attaching them to each other and I will add them all up to equal one BIG red number. As I have talked with other people about money, which I do almost constantly, I somehow get people to open up and tell me details about their financial world that people wouldn't normally share in casual conversation. I have learned that so many people look at their money like piles of clothes lying around the house. People tell me, "Oh, I only have three piles of clothing that I need to put away" but I look at the piles and say, "That's almost three weeks of laundry!!" So it is with debt, the dots aren't connected in their mind and they just see a car loan, student loan and a few "small" credit cards. I look at just those three debts and discover over $30,000 in debt! I guess people feel better about their financial world if they separate all their debt into categories of "good debt" and "bad debt".
Perspective is very important when looking at debt. Debt is never leverage, I laugh when I hear people say that they leverage debt to get ahead. I know a man who once told me that he leverages debt to purchase homes and pays the mortgages three months in advance so that the bank will be willing to loan him more money. Leverage works both ways though, when he loses his job and renters miss payments, his family will be "leveraged" to the streets. It's always an eye opener when you look at your debt, and see that it's more than your annual income.
Take a look at your net worth add up all your assets and subtract your debts. (We do this using Mint, it's quick and easy!) Then find out if you are "worthless" or if you are getting somewhere in life! Moving your laundry from the couch to the bedroom does not mean it's gone. Fold up your laundry and put it all away! Stop shifting your debt around, if you pay off a car, don't go get a new one with a new payment! Pay yourself instead! Grow your net worth. If you have a net worth of $1,000,000 and "only" make an annual income of $20,000 a year, who cares, you're still a millionaire! If you make $400,000 a year and have a net worth of a -$50,000 BMW and a -$700,000 house YOU ARE BROKE!!
Connect the dots, work as a team and build your net worth! don't have a worthless marriage.