Frog Medicine offers guidance on how to get out of the painful spiral of debt that can crush our motivation to pursue our goals in life.
Where these teachings are primarily about emotional health and wellness, this totem also has much to say about Finances. Frog medicine offer guidance on how to get on the fun side of the money game and out of the painful spiral of debt that can crush our motivation to pursue what we love in life.
Part of the following process may involved forgiving yourself for past behavior that has proven very expensive. It won’t do anyone any good if you keep punishing yourself for not understanding the dangers of the U.S. Credit Card Industrial Complex. No one taught us how to manage finances in high school. And if they did, it is likely, our young, eager spirits didn’t listen. Forgive that. And lets start anew. If you want financial freedom to access the wonders of the world in a major way here are a few basic behaviors to follow:
Frog’s Rule #1:
Get out of debt.
If you owe money to credit cards that means you are still paying for a $20 dinner months ago, a $10 martini years ago, or a gift that broke yesterday. Maintaining a credit card balance from month to month means you are cool with being charged interest for the ability to not pay for all those things you’ve already bought in full. This means you could pay for an item five times over in the span of two or three years. You can not make money at a profit if you are shackled to an expensive credit card debt. You must pay for the things you’ve already bought so that you do not pay for them endlessly. How do you free yourself from that slippery slope?
Step 1 to getting out of debt: Take all credit cards out of your wallet and change your spending behavior to deal only in cash or debit card. When the monthly money is gone, it’s time to stop buying until income is deposited. This may involve slightly uncomfortable adjustments to your life style but keep in mind- it isn’t forever- just until the Credit Card Vacuum taking all your cash has been removed from your life. Vow to no longer deal in credit until you have the ability to pay off entire sums in full monthly. This could take a few months to a year, depending on how much debt you’ve accrued.
Step 2 to getting out of debt: Consolidate all debt across all credit cards onto one card so that you can see it all at a glance and not get overwhelmed, discouraged, or confused. Chose to consolidate onto the card with the lowest monthly Annual Percentage Rate. Or pay off the debt for the high APR as soon as you can.
Step 3 for getting out of debt: Play the Balance Transfer Game. Have you ever received big colorful junk mail with the phrase “0% apr for 6 months, 12 months, or 24 months?” If you have- open that envelope and give that credit card company a call. Playing the Balance Transfer game with credit card companies can work in your favor if you pay attention and remember- it is a game so stay alert. When you find a balance transfer offer that looks like a good deal- total the amount of debt across all credit cards and divide that amount by the number of months the company is offering you a 0% grace period. Example: I consolidate three cards into a sum of say, $6,000 onto a balance transfer deal with, say, 12 months of 0% interest. $6000 divided by 12 = $500 a month. That’s how much I have to pay to be debt free in 12 months.
If your monthly payments are an amount that is unreasonable for you at this time- you can still play the transfer game and win. The objective is to make large, aggressive payments. Even if you pay less than the monthly minimum you are still getting quite agressive on getting that total amount down. And the key is- you are doing so at a time when you do not pay extra interest. You are in a 0% grace period for a certain number of months. When you start paying large amounts off to your debtor each month all the other companies start to take notice of you and begin to offer you more 0% offers. When your first grace period is coming to an end, take another offer and shift the remaining balance.
BUT REMEMBER*** To play this little monkey swing game right- YOU MUST MUST MUST- record the date that your 0% deal ends on your calendar. Put it on your calendar in all caps. If it looks like you are not going to finish up the debt by the end date, it is time to start looking for another 0% offer in the mail. If you’ve been making as large of payments as you can each month- You WILL receive more of those offers because you have become very attractive to credit card companies. And then it is a matter of timing out the best moment to jump ship and land your next 0% grace period. **If you do not keep track of when your 0% offer ends, you risk missing the cut off date and falling prey to an outrageous APR increase.** That could set you back right where you started- so be aware. That’s the fine print game that the Credit Card companies are playing with you. They want you to forget and miss a payment or maintain a balance after the initial bait to lure you in. That’s how they win this game. They will not show you the end date of your deal. And it will take effort to find it. Call the company and ask- and ask again. If you think about it, it is a zero risk game for credit card companies. If they get ten people to shift a balance, and 8 people stay in good payment standing but two forget and double their debt, the credit card company wins. But you can win if you stay on top of your payments- never miss one, and get out before the end of the grace period. Depending on how large your debt is you can do the balance transfer dance several times without paying interest. That is your goal. Stop paying interest on things you’ve already bought. When accepting a transfer deal you may find a one time fee. Look for the lowest fee you can find. Some deals even offer no-fee transfers.
The reason you want to seriously consider playing the 0% game is because if your debt is high, you could just be spinning your wheels each month paying off just the interest on your principal balance. Which means your debt isn’t going anywhere. If you don’t think you can risk the 0% offers, you want to at least do the following: Stop adding to the principal debt by using that credit card. And find out how much the interest is that you pay monthly. You see, Credit card companies pay off interest first and then the debt balance. So it is possible you could make a $100 payment one month and only end up reducing your debt by $50 because the APR took $50. When you sign up for 0% apr for twelve months, all your payments reduce the primary balance. Very appealing offer, but only if you can stay alert.
So- after making a balance transfer to say… Discover card, or Citi Bank- DO NOT for any reason use that card for further purchases. There is a dizzying and dubious amount of fine print to balance transfer deals when new purchases are added to a card. Steer clear of that red tape and just see that card as the holding ground for your debt. Take the card out of your wallet, tighten your belt, and pay cash for things. It won’t be forever. You just need to pay for all the stuff you’ve already bought before you can start feeling the green growing in your life again.
Sign up for our monthly newsletter to learn more about Animal Spirit Medicine
The Five Lessons a Millionaire Taught Me by Richard Paul Evans
Eat That Frog– an excellent guide on how to stop procrastinating.
Ask And It Is Given– by Esther Hicks- How to change your mental attitude about money and abundance.
Mint– a valuable web tool to manage all your banking. Lots of help with creating budgets and tracking where your money goes.