Welcome to the weekly Wednesday Debt Discussion. In case you missed it, last week we talked about the pros and cons of disclosing debt. It was great to hear everyone’s take on making debt personal or public.
Imagine you are sitting at the table having a nice conversation over dinner. All of the sudden you notice the floor under your feet is all wet. In fact, the entire kitchen floor is covered in an inch of water which appears to be rising.
What is the first thing you do?
Do you run to the bathroom and grab a towel? Do you head straight for the water main? Do you go out and buy water wings for your kids? Do you wade through the water and look under the kitchen sink to find out where the water is coming from?
Those of us who are in debt have a wet floor. The water may still be rising. Let’s look at our possible first responses.
Grab a Towel
Your knee-jerk response may be to use a towel to soak up the water in your current surroundings. However, if the water is still rising, you will run out of towels quickly. Even the fancy microfiber towels will not solve the problem if leaks persist.
At least grabbing a towel is better than a washcloth. The minimum payment washcloth won’t dry your flooded kitchen up, especially if there is still a leak in the plumbing. Either way, grabbing a towel to mop up your debt should not be your first response.
Head for the Water Main
Turning the water main off may sound like a smart idea, but it is a temporary solution. Stopping all water flow will prevent the leak from leaking and the flood level from rising, but eventually you will need to turn the water back on. Turning off the water main alone will not solve the problem with your flooded kitchen, but it may buy you some time and sanity to continue searching for a solution.
I see turning off the water main as a spending freeze. A spending freeze will definitely stop the money leaks. It could be a responsible way to start. However, if the pipes aren’t repaired or replaced before the water comes back through them, you will be back at spurting water again.
Buy Water Wings
Hey, if the kitchen is full of water, why not enjoy it! You can always take care of the problem later.
We’d probably all agree that a flooding kitchen is bad news. While buying water wings probably isn’t the first thing you would do if your kitchen was flooding, it’s place in our debt analogy is real.
Are we ignoring the the leaks in our budget that are essentially flooding our kitchens with debt? Would we rather enjoy the swim than fix the leak and dry up the floor?
Looking for Leaks
Hopefully our first response to finding our kitchen flooded with water would be to look for the leak. When we find it, we would use whatever we had on hand to patch it, repair it, or replace it as quickly as possible. There is no sense in mopping up running water.
Before we can make a plan to clean up our debt flood, we have to take a close look at our plumbing. Where are the holes that are dripping or spraying or gushing water? Until we can stop up all the holes in our budget (or lack thereof) that cause us to spend more than we make, we will never make headway in the big debt mop up.
How’s your plumbing? Are your pipes still dripping (or spraying or gushing)? How did you identify the leaks? Have you tried to mop up your debt while your leaky pipes continue to add to the flood? What’s your advice to someone who has just noticed the water at their feet or who has finally decided to lose the water wings and address the problem?
For budget help read about why we switched from Mint to YNAB, how we budget every penny with zero-based budgeting, how we mazimize our debt repayment at the end of the month, and how we live on last month’s income.
If you are ready to be done with debt, but don’t know where to start, read my article How to Get Started Paying off Debt.
Full disclosure: I am not a plumber. This analogy is not a replacement for professional plumbing advice. If you have a plumbing problem, please contact an expert. 🙂