It’s always good to have a strategy when facing a problem–particularly a financial problem.
Over the last three months, after an odd “Yes Man” moment in March of this year, I began learning Judo and Jiu-Jitsu. Off the couch I came and into the Dojo (the gym) at the behest of my good friend Chris, who had dutifully, yet unsuccessfully, nagged me for two years to “just try it.”
Through aches, pains, and sheer exhaustion, I’ve learned a few things–admittedly very few because it’s only been three months. And I’ve learned that Jiu-Jitsu has some applicability to those experiencing financial problems.
First, for those of you who don’t know, Judo, “the Gentle Way” (which isn’t so gentle, by the way) is a martial art using throwing techniques. In a nutshell, the goal is to get your opponent from the standing position onto the mat. Jiu-Jitsu, “the Gentle Art” (which also isn’t so gentle) then addresses what you should do on the mat, regardless of how you got there. Judo says “get the guy on the mat; it’s bad for him” and Jiu-Jitsu says, “sure, we’re on the mat, but that’s not always bad; let’s deal with this problem. We can work with this.”
What do you do when you’re on the mat?
First, I’ll give credit where credit is due. I’m borrowing these 10 things from “10 Ways Life is Like Jiu-Jitsu” from BJJ at 50, a blog about learning Brazilian Jiu-Jitsu after age 50. (Because I’m 47, I’m close enough to being in that demographic to read the blog!)
“1. When you find yourself in a bad position, calm down and continue breathing. Panic is exhausting.”
It’s human nature to panic. Most people I see are fearful of their financial problems. Maybe they just got sued. Maybe they’re facing foreclosure. But panic never helps–it just hurts. It makes it so you can’t think clearly. Lesson one is this: Don’t panic! It’s probably not as bad as you think, and even if it is, panic won’t help.
“2. If you are not being attacked, do not waste energy defending yourself.”
You may think you’re being attacked, but you may not be. You’re being called. You’re receiving letters. But that’s not really an attack. This ties in with #1 above “Don’t panic.” If you’re not being attacked, be very careful about doing things for the sake of doing things. You may think you need to do something, but that may be a huge mistake. For example, if you make a payment on that old debt, you restart the statute of limitations. Not a good move.
“3. Always have multiple escapes in mind before trying one. Fake one and do the other.”
Maybe you don’t want to file bankruptcy. Fine. However, there’s nothing wrong with pointing out to the creditor that you have that option. Learn about all “escapes” before deciding which to choose.
“4. Maintain a solid base.”
Know what you’re spending and why. Figure out a new financial foundation. Maybe that means getting rid of an expensive car–or even a house–that you just can’t afford. Maybe that business won’t ever be profitable and it’s time to shut it down. Take time to reassess things and build a base for future financial success.
“5. Keep your extremities close to your core.”
Don’t flail around taking unnecessary risks. Maintain a defensive posture. As with #4, figure out what’s important and protect it. And that might not be what you thought was important a year ago. Always reassess.
“6. First and foremost, improve your position.”
Just because you apply #1 (“Don’t Panic”) doesn’t mean you do nothing. You just do something in a thoughtful, careful, strategic manner. As I say to my clients, “we need to do a little strategery” (borrowing a term from former President George W. Bush). And we do so to improve your position.
“7. When defending, create space. When attacking, eliminate it.”
Once you apply the earlier principles, implement your plan decisively. Sometimes, that means you must defend; other times, you need to attack.
“8. Use leverage, not muscle.”
This is the key to both Judo and Jiu-Jitsu. And it’ll work for your financial problems, too. Here’s the point: Sometimes you just can’t–no matter how hard you try–muscle your way through financial problems. Knowing when to try something different is critically important. Apply muscle too long, and you get nowhere even though you’ve drained your IRA or 401(k), destroyed your marriage, destroyed your health, or all of the above. Know when you can’t muscle your way through. Use leverage–and that may mean bankruptcy.
“9. Don’t force a move that’s not working. Go with the flow and use what you are given.”
This goes along with #9. If your strategy isn’t working, come up with another one. Do something different. Use what’s at your disposal.
“10. Take care of your partner.”
That means your spouse or domestic partner. As I said in my “Bankruptcy Myths” section, bankruptcy is good for your marriage if it’s appropriate to file. “Bankruptcy saves marriages. It relieves stress. It keeps families together. If filing bankruptcy is appropriate, put your family ahead of your ego and get the help you need. Bottom line: Bankruptcy saves marriages.”
Applying these principles to your financial problems will result in a much less stressful experience, as well as a higher likelihood of success in dealing with those problems. One other point: get help early from a bankruptcy attorney so you can come up with the right plan of attack. A good attorney will give you all your options–bankruptcy and non-bankruptcy alike.
Post script: This is my cute little niece (one of many) getting her orange belt in Free Style Karate. Congrats, Kiddo!