Tough choices must be made. Amidst the cloud of abstractions and advice wrapped around people in economic hard times, this post is about a bit of reality. Yesterday is the first time I’ve sent in a bare fraction of my mortgage payment. I’m sure the mortgage company won’t be pleased. I’m not either. But I made sure to send in something, and I made sure to put it in perspective. I’m going to let one large, slow peril snarl at me while I fend off a faster, nearer hazard. The mortgage may not be fully paid, but I do so to tear into credit card debt. Not an easy choice, and too common in America.
I’m an optimist. Optimism, and an appreciation for the present, keep me going. I like to base my optimism on the past. This worked before, so there’s a good chance it will work again, whatever “this” may be. That’s why I was reasonably confident about Plan A, my investing strategy that had succeeded for thirty years. But I had backup plans. Plan B was and is my business in consulting and teaching, as well as my writing and photography. The income is nice, but barely keeps the business alive. The compliments are much more numerous, but compliments don’t pay the bills. So, Plan C was initiated to go find a job. I’ve enjoyed engineering in the past, time to return and be well enough paid to carry me into the future. Not yet. I’m in month 15 of looking. Nice compliments, but overqualified still means no job. Welcome to Plan D, I’m optimistic someone will buy my home. The view alone is worth the price. I’m waiting.
My optimism is like the compliments. Neither pays my bills.
My optimism is also why I let the credit card debt accumulate for a while. As my stocks dropped, I knew the company fundamentals continued to provide enough value that the stocks would recover. That will probably be the case, but not yet. I thought it would only take a quarter or two, in which case the credit card debt could be eliminated within a year. My optimism also encouraged me to delay the end-of-month payments because my main stock, DNDN, moved with monthly earning announcements that came on in the first week of the month. I’d wait for the news, hope for a recovery, then sell no matter what because I had to raise the money for the mortgage and leave time for transfers. The 12th (credit card due date) and the 15th (end of the mortgage payment grace period) became prime dates in my monthly calendar. Until this month I never missed a payment, though one or two were a day late when I got the timing wrong.
My optimism continues, but reality isn’t as patient.
The credit card has an interesting feature. For basics like food and gas I can charge without interest as long as I pay off that food and gas total every month. But those interest payments on that large balance continue. I’m about halfway to my limit and that remaining half is my emergency cushion. I could maintain that balancing act, but if I slip, those interest charges ramp quickly and the cushion deflates.
My mortgage has a much lower interest rate and a much higher balance. I love this house, but the payments for it are much larger than the payments on my card. The risk with my home is that the property is the collateral for the loan. It is hard to put that at risk.
My credit card and my mortgage represent two basic needs for life: food and shelter. Ironically, and unfortunately, those are the two sources of my debt. Of course, many other things could be sources of debt, but I live so frugally that if I can’t afford them I don’t buy them. Effectively, I am living on credit.
Every ping of an email, every ring of a phone call, every hello on the street can be the moment when my business turns the corner to profitability, or someone is contacting me to offer me a marvelous job, or someone has offered to buy my house. My money problems can disappear in a moment, and that thought is kept fresh every hour. (Though I must admit that the mantra is becoming a bit rote.)
Those pings and rings and hellos aside, I had to make a choice, so I decided to start paying down my credit card debt, reducing those payments and reinflating that cushion. I don’t expect a Thank You from the credit card company. I do expect a string of phone calls and letters from my mortgage company. I sent along a letter apologizing for the dramatically reduced payment, not because I think it will make a difference, but because I continue to think the Golden Rule is a good idea. When someone delays payment on a session or some art I appreciate their effort at making the call. And everyone has eventually paid – I think.
My choice can sound like a numbers decision, logically initiated and acted upon; but, it wasn’t totally. There was a physical catch in my throat as I wrote the check and the letter, and as I sealed and mailed the envelope. I take my commitments seriously, and each bill represents an commitment for me to pay for the goods and services I’ve received. As long as we have a currency-based economy that act will include money. Emotionally, I am committed to repayment, but they want finances not accumulated good will.
There are synchronicities in life. The same day I mailed the check I also received a phone call from a neighbor. They saw my artwork months ago and couldn’t stop talking about it. They wanted to come by and buy. And they did. They spent the same amount on my art as I had sent in to the mortgage company. I wonder what they would’ve bought if I’d sent in the full amount.