Earn, Pay, Get - In That Order

A couple of years ago I was in the market for a new cell phone. It was great to shop online and to read all kinds of reviews. But even with all of that information, nothing quite beats holding a phone in your hand and giving it a whirl. There are some things that require actually trying something out before you know whether it will work for you. For example, I never buy footwear online because I really don’t know whether it will fit right and my feet are pretty unforgiving.

After narrowing my phone choices through online shopping, I wanted to have a hands-on experience with several models. It was Saturday evening. The only place I could accomplish my goal was at the mall. I hate going to the mall. Rarely is there anything at a mall that I want that I can’t get at a better price elsewhere.

Visiting the mall on any Saturday evening makes me feel like they just opened the gates of the asylum and all of its residents came to the mall. Among the masses of humanity the flow up and down the concourses are more examples of bizarreness than you can find at a Marilyn Manson concert.

As we stood at the booth for the cell phone provider considering our options, a young couple in their mid 20s walked up along with their toddler son. Their cherubic faced little bundle of activity had earrings that matched his father’s, just not gauged as large. At least the tot didn’t have tattoos matching those of his parents. The apparel this trio wore was pricey, as were their various jewelry accoutrements.

The tot’s mom stepped up to the counter and showed a great deal of interest in a particular phone model. She and the salesman eventually began discussing calling plans. She then dropped a question that the salesman almost seemed to be anticipating. “What kind of financing options are available if you have filed bankruptcy?”

At that point, the salesman became rather blunt. “There are no financing options available. The only thing you can do is pay full price for the phone up front and use a prepaid calling plan.” The woman spent a few more minutes trying to schmooze the guy and wrangle some other kind of arrangement from him. It was clear that she had had some practice at this. He said he’d like to help, but that the company simply no longer provided any other options.

It pained me to see a family that young that had already gotten into such dire financial straits that they had filed bankruptcy. Of course, I have no clue as to the reasons behind their bankruptcy. For all I know, they could have encountered severe and unexpected medical expenses. But the cost of their personal effects and their behavior at the phone counter belied some habits that commonly lead to financial problems. It was clear that they hadn’t learned their lesson yet, which means that they will likely suffer financially for many, many years.

Some of the best lessons we can teach our children are that it doesn’t matter how much you want or think you deserve something; it only matters that you can afford to pay for it. If you can’t afford it but still want it, find a way to honestly earn the means to buy it. And then don’t buy it until you have the means in hand to do so. Avoid debt. And finally, don’t spend everything you have. Put something aside in savings.

Following these principles necessarily means that there will be missed opportunities. But it also means that you will consistently have financial peace of mind. Hopefully if severe problems arise, your discipline will have led you to take steps to mitigate the financial impact. But if that is insufficient, there are thankfully some avenues available.

Years ago, I was working as a loan collector at a bank when a man walked in and said that he wanted to pay his debt. I checked his account and found no debt. He explained that he was involved in construction and had ended up filing bankruptcy three years earlier when the client on a major job failed to pay him. He he ended up defaulting on some debts. But now he had just closed on a major project and wanted to repay all of his former debts.

We researched the bank’s records and found that the bank had charged off the account due to the bankruptcy. We had to get our boss involved, but eventually they found a way that the man could repay his debt with interest. That, my friends, is integrity. The bank never expected to see this money and was doing nothing to collect it. But this man still felt obliged to make good on his debt.

So if you ever find yourself unexpectedly in financial default, I’d suggest that you find a way to demonstrate your integrity as did this man. Even if it does nothing for your creditors, it will do loads for your character. The money you spend to do this will be a comparative bargain.