Debt Free Relief Starts by Understanding Proportionality

I started thinking about how to achieve debt free relief over 30 years ago. One Sunday morning at 2:30 AM in the winter of 1979, I was looking at our bills trying to figure out how to find a way to gain some control over a disorganized mess. We had been practicing the financial discipline of Congress and the stick-to-it-ness of a salted leech. Our take home pay was only $1,000 a month with both of us working. Our bills came to about $700 a month. We were both paid weekly, but most of our bills were due in the 3rd and 4th weeks.

We were sailing along spending most of our money in the first and second weeks and then did not have the money to pay all the bills. I know this sounds stupid, but it is a problem that a lot of couples have when they first start out. Since our bills were $700 and we had only $1,000 coming in, I realized that we had to live on $75 every week.

$1,000 (Take home pay) - $700 (Monthly bills) = $300 (To live on for a month)

$300 divided by 4 = $75 (To live on for the week)

We were a real high-income power couple, obviously. Seriously, even such a low-income situation can serve to illustrate some basic concepts.

This meant that we had to pay $175 a week ($700 in monthly bills divided by 4 = $175) on bills as regular as clockwork. There was no choice in the matter. If we paid less than $175 in a particular week, we would fall behind.

If we paid just $100 in the first week, for example, we would have $600 of bills left to pay in the 3 remaining weeks. We would then have to pay $200 a week in the last 3 weeks of the month.

$250 (weekly take home pay) - $200 (bills paid per week) = $50 (a week to live on)

It was hard to live on $75 a week even as far back as 1979. But it was really tough to live on $50 a week.

Since 1/4 of our take home pay came in every week, we had to pay at least 1/4 of our monthly bills every week. This had to be done without exception. This is proportionality.

Suppose there is a couple and both work. One of them is paid once a week and the other is paid every 2 weeks. Their income is just enough to pay the monthly bills with very little left over.

The first week 18% of the monthly take home pay comes in.
The second week 32% of the monthly take home pay comes in.
The third week 18% of the monthly take home pay comes in.
The fourth week 32% of the monthly take home pay comes in.

Since their income is just enough to pay bills with very little left, this couple would have to pay:

18% of the monthly bills in the first week,
32% of the monthly bills in the second week,
18% of the monthly bills in the third week,
32% of the monthly bills in the fourth week.

This is proportionality and this is not even a strategy to get ahead or attack debt in any way. The bills must be paid in this ratio or this couple will fall behind. There is no choice in the matter. It is important, especially for lower income folks, to understand proportionality.

After understanding proportionality, it is possible to move on to bigger and better things, such as true debt free relief by destroying all debt, as you will see in an upcoming post.

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