Archives for category: radical acceptance

July 2008:

Credit card debt $31,000. Before I could start repaying the student loan debt, with its rather modest 7.25% interest, I needed to tackle the $31,000 in personal debt I had. One of the toughest steps was actually determining how much debt I had, what my expenses were each month, and what my income was likely to be. For the longest time I was like many others, people I still run into now, who not only have no idea what the make or how much they spend, they don’t want to know. Let that sink in. There are people in a great amount of debt who actively avoid learning how much they owe to others and how much they spend each month. That’s like taking a road trip and not knowing where your starting point is.

So I created a budget with excel and a budgeting program (it was a free version of Quicken that has now become Mint). I also used a debt pay-down calculator from the web and the debt snowball technique that Dave Ramsey and others advocate for. Below is a screen shot of the budget. I figured I could pay 2504.14 each month towards personal debt and still have a little left over each month.

One method of using the debt snowball is to pay the smallest credit card off first. This gives you a sense of accomplishment and success. To me, it seemed more important to pay off the credit card with the highest interest rate first, so I used this approach to the debt snowball. Each month I would pay $2504.14 to credit cards, and as each one was paid off I would then roll the amount from the paid off card to the next highest credit card. So after one month and Macy’s was done, I added that to Amex. I would then hide the card so I wouldn’t use it.

2008 budget


Currently, I have $2478 in various retirement accounts. Two factors have contributed to my having saved virtually nothing for retirement: an accelerated pay off of student loans (about $190,000 in 7 years) and temp jobs that either have no retirement or retirement contributions that start after the project ends.

At 54 years old, assuming I keep my physical and mental health, I have 15-20 years to prepare my finances for 30 years of retirement. Talk about anxiety! How can I save enough in 15 years to live off of for 30?

As in most cases, however, I found that looking at some data relieves my anxiety somewhat. The Social Security Administration actuarial table from 2011 says I will likely live for another 29.54 years. That is less than the standard time advised by financial planners, who generally say to plan for a 30 year retirement. If I work until 70, I will likely live another 16.33 years. It’s still a little unbalanced–work for 15 to live on for 16.33–but more doable than 15/30. My family tends to be long-lived, and advances in medicine may allow for a longer life, so I probably should plan on 20+ years, not 16.

In addition to life expectancy, there is the magic of compounding. The more I can front-load my retirement contributions, the better. That money will continue to grow. And if the market is bad, then my contributions have more value when the funds I purchase into then increase. Bankrate’s retirement planning calculator says I am on track if I work until 70, live til 90, keep my current income level and retirement contributions, and have a 7% annual growth in retirement accounts. Most important, I need to live on less than 55% of my current income in retirement. Tough, but conceivable. If I live off 80% of my current income, which Wells Fargo recommends, then my money runs out in 5 years.

The Wells Fargo calculator is more pessimistic (or maybe more accurate), so I ran some numbers through it, too. Bad news at my current income and contribution level.

wf retirement

Luckily, my options are still open. I can increase my income and/or decrease my spending and increase my contributions to an IRA or other retirement account. Doing both is beneficial because I will be increasing my Social Security amount, increasing the amount to “save”, as well as getting accustomed to living off less so retirement will be an easier adjustment. Alternatively (and more likely), I work until I die so I don’t need to worry about money for retirement at all.




In the spring of 2008 I found it very easy to refuse to accept where I was with finances. I kept thinking that I was better off in the past–when I was a homeowner and professor in Minnesota–than the present–renting a room, working temporary jobs as document review attorney in the San Francisco area. I would email and call a friend lamenting my life and having a grand pity party. Funny thing was, I was wrong.

In Buddhism and therapeutic approaches (DBT and ACT) there is a concept called Acceptance. The idea is that suffering is alleviated and healing happens when we have a realistic understanding of what is happening and accept this. In Buddhist practice and therapy, understanding can be achieved through mindfulness and meditation (or mindfulness meditation). Once you or I sit in meditation, not judging or evaluating, simply paying attention, we have a clearer picture of ourselves.

A similar principle exists in weight loss and financial responsibility. In weight loss, keeping track of your eating in a food diary allows you to really see what you eat over the course of a day. It is also an incredibly effective (if time consuming) technique. A WebMD article, citing research, states that “people keeping a food diary six days a week lost about twice as much weight as those who kept food records one day a week or less.” Our memories are faulty and we want to protect our ego so we “forget” the 3 samples of banana bread we had while waiting for our Salted Caramel Machiatto. In gaining control of finances and getting out of debt, we need to know what we have, what we make, and what we spend.

We are not mindful and we are attached to our ego so we do not have an accurate picture of our caloric intake or money outflow and we do not accept our starting point.

If we don’t know where we are, we cannot develop a path to where we want to be.

Even as I started to pay down debt, I still thought I my net worth was greater in 2001 than it was in 2008 and 2009, So, at the strong insistence of my friend and financial adviser, I figured out what my net worth was in 2001 versus 2010. Here is what I found:

Taxable Income Jan 1-June 30, 2010: $62,609.11
Highest annual income as professor: $53,403 (2001)
Highest annual income at Barnes and Noble: $15,270 (2005)

In 6 months made 4 times what I did in NC and 17% more than I did as a professor over 12 months.

In fact, using an amortization schedule and an approximate value of $90,000 of my house in 2001, I was wealthier after 6 months in 2010 than I was after 12 as a homeowner and professor in 2001.

Dec 30, 2001:
Equity in House  $      8,149.00
Ford Focus equity  $         500.00
Income  $    53,403.00
Total assets and income:  $    62,502.00
Owed on house  $   (81,851.00)
Credit Card debt  $     (2,000.00)
Student loan balance  $ (108,383.00)
Total liabilities  $ (190,234.00)
2001 Net Worth  $ (127,732.00)
June 30, 2010:
6 months income  $    62,609.11
VW Blue Book  $      4,965.00
Total assets/income:  $    67,574.11
Credit cards (paid off monthly, average monthly total)  $     (1,000.00)
Student loans  $ (112,711.62)
Total liabilities:  $ (113,711.62)
2010 Net Worth  $   (46,137.51)
Difference  $   (81,594.49)

I was better of financially by more than eighty thousand dollars..

Numbers don’t lie–I am better off now than I was during the “hayday” I obsess about.

Once I knew where I really was,and accepted it, I could start planning my finances to get out and stay out of debt..

And I can’t sleep as the numbers are like–kitten bellies.