Q: The last year has been tough for us (employees) financially with the high prices for everything. When I talk to my boss about a raise, he just says, "Join the club." I guess he can’t  pay us more simply because we need more, but isn’t there something he can do? All my credit cards are maxed out.

A: Tough economic times tend to expose the strengths and weaknesses of our personal approach to money management. We can try to maintain our regular spending habits with credit, but eventually we have to pay the bill. And unfortunately, the bill doesn’t wait for a raise or our boss’ sympathy.

It can be extremely difficult to change our buying habits, but sometimes our financial situation leaves us no choice. According to a variety of credit-tracking services, the average household (which has at least one credit card) is carrying nearly $8,000 in credit card debt. 

People who are good at managing their money always have an economic edge over those who aren’t good at it — regardless of how much money they make. Strong money managers have an even greater advantage during tough economic times. As the economy slows down and competition between companies reduces the price of many items, those people who have managed their money well are positioned best to take advantage of the situation.

These are the people that were frugal during times of high prices by cutting their expenses, saving money, modifying their buying habits and paying down debts.

You are right. Your boss cannot give you a raise just because you need more money, but there are several things he can do. He can talk to his banker or other financial contacts and ask them to come to the farm to give a presentation on true debt reduction (not just debt consolidation) and how to more effectively manage money. He could also purchase (for his employees to borrow) personal-financial-training programs that outline in great detail how to budget expenses. Some of my clients have purchased the Dave Ramsey program, www.daveramsey.com, and encourage all employees to study it. Certainly there are many other resources available online.

One last thought — add up your monthly credit card bills, your car payment and your rent or mortgage.   If you could have those all paid off in five years, what would your life be like? 

Good money managers work through these situations. But understand that it takes discipline, delayed gratification and a consistent focus to achieve. (Hint: Mortgage bankers say that if you make double payments on the typical 25-year mortgage, you will have the home completely paid off in 5.5 years. That may be a lot to juggle, but it’s food for thought.)

If you have questions for Dear Boss, send them to:

Don Tyler, P.O. Box 67, Stockwell, IN47983or e-mail to don@dontyler.com.

Your letter will remain confidential, and may or may not get an individual reply.