Season 6 Blogs: Episode 9
While Gail will not be able to answer questions posted on slice.ca, you can visit her personal blog here.
Debt on a Tightrope: Karl & Karissa
You could cut the animosity between Karl and Karissa with a knife. Married for two years—and together for eight—the arguments over money were constant and intense. So they decided to split their accounts to save their marriage. With their own credit cards and their own lines of credit, as Karl put it, “Now she has her debt, I have mine. I usually don’t even get to look at her statements.” It looked like their “strategy” was working for a while. They didn’t talk about the money, so the screaming matches were gone. But their bizarre tit-for-tat spending battle still raged.
Karl has put a lot of sweat into the house and believes it’s all his. He said, “I spent a lot of money on this house and I pay the mortgage. It’s my house.” Wait till Karl gets a load of what I have to say about that.
Kari’s maternity leave put a big strain on the budget. So did all the shopping, the movies, and everything else she did to entertain herself as a stay-at-home mom, averaging over $1,000 a month. “It’ll all get paid off magically, I guess,” says Kari. I cringe! Then I glower. I come down pretty hard on Kari. But Karl doesn’t get off scot-free. Nope! He’s a big dope, too, and I tell him so.
On the one hand, it seems that Karl and Karissa are doomed. Then they start to talk about how much they both adore baby Gabriel and want another child together. In one breath they’re talking about plans to buy a bigger house. In the next, divorce is a real possibility. And all the while, they’re dissing each other and spending money they don’t have.
Karl has a nifty trick he’s pulling to keep his creditors at bay. This is an example of what you don’t see, because not everything we do makes it to TV. Course, all Karl’s “smarts” aren’t doing a thing to get him out of the hole. So, just how smart is he? And how will Kari deal with the challenge of figuring out how to get debt-free in three years?
According to The Book of Gail: Just because your creditors are stupid enough to give you enough rope to hang yourself doesn’t mean you should actually kick the chair away. Nobody is MAKING you use that credit. And if you do, and you end up losing everything because you’ve over-extended yourself, you can’t blame your stupid creditors. That’s YOUR fault.
Gail’s to Do: No one should spend more than 15% of their net income making payments on their debt. If you have to do that, it means you have too much debt. Today, figure out what it’ll take to get that debt paid off in three years or less. If you don’t have the money in your budget to make those payments, Make More Money!