vindy.com | Get out of debt, boss urges workers

Sunday, September 25, 2011

St. Louis Post-Dispatch

ST. LOUIS

Back in March, the 22 employees of Wisper Technology owed $480,699 in car loans, student loans, credit cards and other forms of consumer debt. That’s not counting their home mortgages.

Now, they owe $130,999 less, says their boss. They paid it down diligently, and part of the credit goes to Nathan Stooke’s good hearing.

Stooke owns the small business, which operates out of a converted century-old barn in Shiloh, Ill. He’d pick up snippets of conversation as he walked around the building.

“A couple of times I heard employees on the phone haggling with credit-card companies. They’d say, ‘I can’t make that payment,’” Stooke recalls.

Employees would come to his office to ask for an advance on their next paycheck. Others would ask for a raise, telling him, “Just a little more would help.”

Many of them, he concluded, were having trouble making ends meet.

Wisper provides high-speed wireless Internet service, mainly to rural areas that cable and DSL can’t reach. Stooke started the business in 2003, going $36,000 into debt to buy equipment. “I spread it across three credit cards,” he said.

Between then and now, $10 million in revenue has passed through his hands. So he found himself wondering, “Why do I still have personal debt?”

He decided that everybody at Wisper — himself included — needed to learn how to better handle their personal finances.

So he shelled out nearly $8,000 from company coffers, hired a facilitator and bought tapes and materials for a personal-finance course. For 21/2 hours every Thursday night, he told employees, they’d be in school in the un-air-conditioned company warehouse.

That’s after working all day. The course lasted 14 weeks.

Some workers were not enthusiastic. “I had to strong-arm some of my employees,” he said. “Four or five didn’t want to be in the class.”

He added a carrot. If they completed the course — and if he could raise company revenue by $6,000 per month — they’d get a 10 percent raise. All but two signed up.

It’s tough stuff. It requires husbands and wives to talk to each other about money and how to spend less. Stooke required spouses to take the course with employees.

“I had four different employees in my office saying, ‘I’m going to divorce the wife,’” said Stooke. One moved back in with his parents. “I didn’t expect it to be that bad,” said Stooke.

That didn’t surprise Allen Dorsey, the business coach and former finance executive hired to run the course. “The major cause of challenges in relationships is how people view money,” said Dorsey.

Often, one spouse doesn’t know how the other is spending money — and they’re not happy when they find out.

“We sacrificed a little sanity,” joked Ian Ellison, Wisper’s chief technology officer. “Most couples don’t want to talk about it, but once we got through that hurdle, it made it easier,” he said.

Ian Ellison, 36, was just about debt-free before his family moved to a new home in Ava, Mo. But there were things to buy for the new house. Then the transmission gave out, and he needed to buy a car.

Back into debt they went.

“We weren’t in trouble as far as debt goes, but we were in trouble as far as looking forward to retirement,” he said.

The course helped get him on track. “The sad thing is that we knew this stuff,” he said. “We just didn’t apply it.”

The couple, who have two young children, stopped going out for meals as often, cut back on toys, and they’re considering canceling satellite TV. They’ve paid off one credit card, and they are socking away savings.

Dave Gress, 34, and his girlfriend stopped their trips to McDonald’s.

“You add that up and it’s like $200 or $300 a month on food,” he said. “Now I’m paying more toward my truck, and I should have it paid off a year early.”

Stooke, the boss, found the course changing his own habits. “The pool pump broke. So I asked, ‘Do we have anything in the emergency fund?’ Before, I would just have gone out and bought it.”

Before the course began, Stooke passed out anonymous file cards asking employees to list their debt amount of their debt. He asked again after the course ended. That’s where he found the $131,000 debt reduction.

Stooke figured it was worth his $8,000 investment. Money stress carries over into the workday. “If I can help them be better people,” he said, “I’ll get a better return for Wisper.”