This is a hard one.
Our finances are…not so good. Don’t get me wrong–we are not lacking in any essentials (you should see my daughter’s shoe collection), but as a family we do seem to operate at a deficit pretty much every month. Certainly there’s a need to simplify our spending habits. And as I was noting yesterday, it’s not like I can make a go at this one alone. I’m going to need some key allies to address how, when, and what we choose to purchase or consume.
The worst part of our finances, though–from an emotional perspective at least–is the burden of carrying all of those beyond-income expenses. Now I know how relative finances can be, so I’m not going to quote exact figures, but in terms of take-home pay, our current debt exceeds our monthly income by more than 200%. Or to put in another way: based on what we bring home, and “clocking” out from today, our debt would stretch all the way to April 4.
Yeah, I know. That stinks.
But here’s the thing–we do have some savings.
It’s like a weird, mental sleight-of-hand trick I’m constantly playing on myself. We are trying to build our savings, mostly through mutual fund investments, so that we have some sense of financial security…while at the same time, we are carrying a debt that eats away at that same sense of financial security.
So today’s simple solution? Sell off those mutual fund shares.
There was probably a more financially savvy approach I could have taken here, I’m sure–if the credit card interest is 15.9%, don’t sell anything that’s earning more than 15.9%. The truth is, though: there’s a cost to all of that debt that isn’t measured by interest rates. It really does feel like a burden that drags me down every time I think about it. Shedding that weight, even at the loss of some potential future earnings, seems like the best, right move.
So sell I did. I couldn’t quite bring myself to sell everything today that I would need to sell in order to zero out that debt, but once money clears and transfers, I will have paid off a considerable portion of the debt we’re carrying–that debt “clock” will move from April 4 back to Feb. 6.
Of course, if our spending keeps up at the same pace, we will be back under the same burden of debt in no time, I’m sure. Reducing consumption will be an ongoing challenge. For today, though, just getting out from under the weight of it all is a step in the right direction.