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Budget Extra for Feelings
By Avis Cardella Monday June 07, 2010
DailyWorth recently reviewed Spent. The following is an exclusive post by Cardella for our readers. Sigh.
So often we focus on the dollars and cents necessary to get our financial life back on track—and fail to acknowledge the emotional currency required.
After years of struggling with a compulsive shopping disorder, I faced this issue when I had to grapple with my credit card debt. Obtaining the money to pay back my debts was one thing; creating a sustainable emotional budget was another.
No pain, no gain
I had been taxed by fear and loathing for far too long. I feared facing the numbers on my credit card statements, and loathed the idea of having to contact a credit-counseling agency.
I needed a strong dose of courage to help me take that first step and contact a credit counselor. I can’t remember how many times I picked up the phone, only to put it down without making the call.
Eventually, I did muscle-up some bravery and as soon as I heard the counselor’s voice, I knew I was doing the right thing.
I was carrying close to $9,000 in debt at that time, which may not sound monumental, but on my freelance writer’s salary, it was enormous. I wish I had budgeted more strength for the pain of revealing those cold, hard numbers to a total stranger—and for the bad news.
The counselor calculated that with payments of $175 a month, I could pay off most of my debt in forty-four months—nearly four years. I was stunned. It sounded like an eternity of paying for things that were probably gone, or never used. It took me while to cope with the shock.
As I adjusted, I realized that payback wasn’t going to be easy, and that I’d have to budget some stamina to stay with the program:
- Stop the shopping binges.
- Find healthier outlets.
- Live within my means.
- Make those monthly payments, without fail, for four years.
Now I also recognized that it was time for some budget cutbacks: I no longer could give myself the luxury of woe-is-me moments. I needed that energy to keep moving forward.
Instead, I focused on the windfall of extra energy that I got, as the relief slowly sank in. After years of high-priced denial, I was finally managing my debt—and my life. And being able to get a good night's sleep for a change went a long way toward restoring my emotional reserves.
Avis Cardella is the author of "Spent: Memoirs of a Shopping Addict."
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Written by Money Obedience, June 07, 2010
I think it is very easy to ignore the emotional side of money. We all have some sort of emotional connection with money which is why it is such a sensitive topic, maybe even more sensitive than sex. I think it is great how you describe the emotions you face when you make certain financial decisions. Great post!
Written by amy, June 07, 2010
i couldn't agree more with this post. i went through almost the same process just over a year ago. it was turmoil just to get on the phone with a credit counselor. i just sort of gritted my teeth through the whole process. i had no idea what kind of emotional ride the whole thing would prove to be - including my current giddyness as i watch my balance plummet and cards get reduced to ZERO balances.
Written by Emma, June 07, 2010
Money-whether we have a lot or a little-creates emotional stress for us. Obviously we need to have some to live life and buy essentials, but there is no doubt it does add stress to our lives. Working for it. Saving it away. Making sure we're not spending too much. Making sure we have enough to spend on things we need. Paying bills. Buying gifts. Sharing with children or other family members. The list goes on and on. The financial suggestions at http://bit.ly/EasySavingIdeas helped me immensely. If you're going though happy or sad money emotions, it may be worth checking out their tips.
Written by Norma, June 07, 2010
I started paying on nearly $20K over 4 years ago. I will be done by this fall. I have just 2 of 4 cards left, and have paid $528 per month this whole time. It was really challenging, and I frequently wanted to just spend that money elsewhere. But as each card falls to $0, I feel very relieved and proud of what I've accomplished. And I look forward to having zero credit card debt and $528 more per month very soon!
Written by Kenia, June 07, 2010
Great post!! I know every time I splurge, it's ALWAYS emotional! "I've had a tough day - I deserve this" or "I'm feeling sad - I deserve a pick-me-up" or "Wow! Think of all the cool things I could make/do with this _______ (insert contraption/appliance/gadget here) I HAVE to get it, it'll be so much fun!" =P (Yes, I just experienced that last one yesterday while in a Bed, Bath, & Beyond....)
Written by marianney, June 07, 2010
I would like to know where I can find legitimate credit-counseling agencies. The link above doesn't take me to the right place, just another post. Does anyone out there know how to tell the difference between the good ones and the scams?
Written by Kelsey, June 07, 2010
I have the same question as marianney. Which credit-counseling agency did you use? And do they charge a fee for their services?
Written by Jaime B, June 07, 2010
"It sounded like an eternity of paying for things that were probably gone, or never used."
Talk about a phrase that really resonates with me. When it comes to consumer debt, it is so galling to realize that you're paying for things that you may no longer use or even own. I like to watch Till Debt Do Us Part, and one of the couples consolidated a lot of their consumer debt into their mortgage via a home equity loan. Wow. I feel so lucky that I've never done this. When Gail said they've now amortized their meals out and their clothes and shoes and sporting equipment, etc into 30 years of payments - it really rang a bell. Liz Pulliam Weston already talked about how paying off credit card debt with a heloc could bite you later if you should ever file for bankruptcy, but I never took that thought all the way out to realize that you are also amortizing payments on things like fastfood out to 20 or 30 years.
I feel so lucky that I'm not in some of those couples' situations and hope other people can use these personal tales as both cautionary and inspirational for their own improvement.
Talk about a phrase that really resonates with me. When it comes to consumer debt, it is so galling to realize that you're paying for things that you may no longer use or even own. I like to watch Till Debt Do Us Part, and one of the couples consolidated a lot of their consumer debt into their mortgage via a home equity loan. Wow. I feel so lucky that I've never done this. When Gail said they've now amortized their meals out and their clothes and shoes and sporting equipment, etc into 30 years of payments - it really rang a bell. Liz Pulliam Weston already talked about how paying off credit card debt with a heloc could bite you later if you should ever file for bankruptcy, but I never took that thought all the way out to realize that you are also amortizing payments on things like fastfood out to 20 or 30 years.
I feel so lucky that I'm not in some of those couples' situations and hope other people can use these personal tales as both cautionary and inspirational for their own improvement.
Written by John, June 07, 2010
I guess I'm not very sympathetic to anyone that gets in 'over their head'. I've ALWAYS believed that if you can't afford to lose- you can't afford to win. If I can't afford a product, no matter how much I thought I needed it, I left it in the store.
Written by Nora, June 07, 2010
I'm with @marianney. There are so many counselors out there that prey on people rather than running a legitimate credit counseling service. How do you know who is safe and who is not? That's been a huge deterrent to asking for advice.
Written by poshcougar, June 07, 2010
I went through credit counseling with ACCC at www.consumercredit.com, I am in my 5th year with them and should be done in 1 month! The fee is minimal, about $3 per account, per month. I had 4 accounts and paid $12 per month.
Written by Jaime B, June 07, 2010
I pulled this off of a Liz Pulliam Weston article.
National Foundation for Credit Counseling
http://www.nfcc.org/FirstStep/firststep_01.cfm
National Foundation for Credit Counseling
http://www.nfcc.org/FirstStep/firststep_01.cfm
Written by Sylvia, June 07, 2010
Hi thanks Jaime & poshcougar...and anyone with some good Canadian site info???
Written by Lily1214, June 07, 2010
I went through this same exact experience not once but twice. The four years go by whether you pay or keep spending.
Written by Victoria Drake, June 07, 2010
It's nice to hear that lots of people are paying off their credit cards. I think it's so unfortunate we live in a culture that promotes getting into debit. Most people probably notice that they have very little or nothing to show for all that debt. That's the really sad part. I know I will never go into debt again. I am strongly against it and I wish we were all raised to be like this from the beginning and that we lived in a society that fostered an anti-debt mentality.
Tip: After you get the credit card debt paid off, take that money and put it into savings every month. You'll be pleased with the results. I love my savings account. It becomes as much of an emotional high as credit card spending once was.
Tip: After you get the credit card debt paid off, take that money and put it into savings every month. You'll be pleased with the results. I love my savings account. It becomes as much of an emotional high as credit card spending once was.
Written by LisainKC, June 07, 2010
I think that the credit counseling is the wrong way to go. You'd be better off to use the snowball system that is used by Dave Ramsey's Financial Peace University. In general, you should check out that whole program and first learn how to start saving! Re-learn how to manage your debt and spending! Credit counseling agents are companies that prey on people in debt! Start with your LOWEST balance credit card and work on paying that one off. Then apply the amount that you were using to pay that one off and add it to the payment on your next highest credit card payment, thus paying that one off even faster. Once that one is paid off, apply that amount plus the payment on the next highest card to that next card - and on and on. You will find yourself paying off your debt very fast! It's called the debt snowball. Don't bother paying credit counselors - they are a waste of money - and prey on people in debt taking more of your money that you already DO NOT HAVE. Use common sense and you will be able to get yourself out of your mess. Go to a Dave Ramsey Financial Peace University course if you truly want to learn how to makeover your financial peace or grab one of his books and start reading.
Written by suellen roley, June 07, 2010
I am currently broke, to the tune of 240.00 in my checking account and less than 60.00 in cash. But life is not all bad because I have NO credit card debt at all.
I do tend to spend emotionally, especially on food. But I am learning to stretch my budget in that area by cutting down on fast food and processed foods.
Yes, some credit counselors do charge money but some don't. Lumping them all in the same group is unfair to the non-profits whose ONLY goal is to help you get out of debt (without charging a fee).
Also, for me a credit counselor would keep me more accountable than just doing it myself with or without input from the Financial Peace University.
Well, I need to get back to pricing stuff for my yard sale. I hope to make 1000.00 as I have a lot of stuff to sell, but its a lot of work getting ready.
I do tend to spend emotionally, especially on food. But I am learning to stretch my budget in that area by cutting down on fast food and processed foods.
Yes, some credit counselors do charge money but some don't. Lumping them all in the same group is unfair to the non-profits whose ONLY goal is to help you get out of debt (without charging a fee).
Also, for me a credit counselor would keep me more accountable than just doing it myself with or without input from the Financial Peace University.
Well, I need to get back to pricing stuff for my yard sale. I hope to make 1000.00 as I have a lot of stuff to sell, but its a lot of work getting ready.
Written by Steph, June 08, 2010
I agree with Victoria Drake, it's a great idea to take the payments you once used to pay off debt and put them into savings. After all, you've already learned to live without that money.
Fortunately, I've never carried any significant amount of consumer debt, just one credit card bill at the beginning of the year that I paid off during the course of 2 months instead of paying in full right away. I do, however, have student loans from grad school, and as soon as they're paid off I plan on increasing my automatic transfers to savings by the amount of my loan payment.
And watching the savings account grow really is an emotional high! It's such a good feeling to know that my husband and I will be able to buy a car to replace his old clunker that's about to die on us without taking out a loan. Seriously, automatic transfers are the greatest. :-)
Fortunately, I've never carried any significant amount of consumer debt, just one credit card bill at the beginning of the year that I paid off during the course of 2 months instead of paying in full right away. I do, however, have student loans from grad school, and as soon as they're paid off I plan on increasing my automatic transfers to savings by the amount of my loan payment.
And watching the savings account grow really is an emotional high! It's such a good feeling to know that my husband and I will be able to buy a car to replace his old clunker that's about to die on us without taking out a loan. Seriously, automatic transfers are the greatest. :-)
Written by Nancy, June 08, 2010
Your description of the emotions surrounding spending and debt are exceptional. I am sending this blog to all our grown children and asking them to sign up to receive the daily emails. They have listened to us for years tell them to stay out of debt, or to get out as quickly as you discover you are in it. Another voice saying the same thing in a more hip way can only help! Thanks for the post!
Written by Amanda (DailyWorth Founder), June 08, 2010
Hi everyone! Can't tell you how thrilled we are to see such a constructive conversation evolving.
@Nancy - that's the dream - constructive practical advice in a hip voice that people actually want to read. Sign em up!
@John - we're creating an empathic community here. We all have our crosses to bare and life lessons to learn - I am sure you do in other areas of your life.
@I'll ask Avis to weigh in on what she knows about SAFE counseling agencies - that's critical information we should have here.
@Nancy - that's the dream - constructive practical advice in a hip voice that people actually want to read. Sign em up!
@John - we're creating an empathic community here. We all have our crosses to bare and life lessons to learn - I am sure you do in other areas of your life.
@I'll ask Avis to weigh in on what she knows about SAFE counseling agencies - that's critical information we should have here.
Written by MP Dunleavey, June 08, 2010
We ran some posts by Gerri Detweiler on safe places to get credit counseling; one of the best is the National Foundation for Credit Counseling: www.nfcc.org--1-800-388-2227. En espanol: 1-800-682-9832.
Written by Jaime B, June 08, 2010
I also like to browse the articles at the savings advice blog and one of their contributors took the Dave Ramsey Financial Peace University course and reviewed each week. If you're looking into spending the money on it, I think her articles are a great resource to see if it would be a good fit for you. She reviews each week and then a final review to sum it all up. She stays pretty objective, even while saying how it does or does not apply to her since she's debt free already.
Here is the review for week One: http://www.savingadvice.com/ar...k-one.html
Here is the review for week One: http://www.savingadvice.com/ar...k-one.html
Written by Carrie, June 08, 2010
Congrats to all of you getting out of debt. You deserve a pat on the back for taking financial responsibility. I think human emotions are the biggest curveball to any lifestyle change whether it be financial or your diet. I encourage all of you facing these changes to seek emoitional counseling while you're doing this so that you can figure out what your trigger points are that got you to the point of debt counseling so that you don't fall back into old habits once the debts pd off.
Written by Daisy A., June 08, 2010
My debt is over 9,000 dollars and I have been working very hard on getting it down. I'm not the only one running up the debt so that just makes it harder on me. I understand we need to get it under control but he don't think much about it. Most of the payments come out of my little checks so I use one account an he use another but I pay on both. That is not helping me. I am determined to get them paid off this year. Praying for no unexpected expenses. I know if I pay off the cards that will free up the money for me to save and pay cash for what ever comes up.
Written by amy, June 09, 2010
i just wanted to throw in my 2 cents on credit counseling agencies. i went with consumer credit counseling services. my office happens to be in ny, where i live, but i have seen that they have branches in other locations in the US.
i wanted to do the snowball thing, as one commenter mentioned. however, i found myself just completely paralyzed financially. my monthly debt payments were nearly $500. i had recently been laid off, went through a big move, and then spent nearly a year making minimum wage - far below what i had been making at my previous job, when i could make payments. i had missed payments and late payments and cards going over their limits - it was a MESS. and i could not get it under control. no matter how much money i threw at my balances, it was all eaten up in fees and double-digit interest charges.
so, for me, credit counseling was a godsend. they negotiated with all but one of my creditors (who wouldn't participate in the debt management plan) to get me lower interest rates and lower minimum payments.
i do pay a monthly fee for the service (without looking it up, i seem to remember $15), but my monthly payment is now MUCH more manageable. i also don't have to keep tabs on due dates for 12-ish different credit cards. i just send one payment to the agency and they handle the disbursements.
using this awesome tool, i have brought my credit debt balance from around 13K to just over 9K in just over a year. i don't use credit, ever (it's a condition of enrollment). i save up and buy things with cash, and i am building my emergency fund. i could not have done it without credit counseling... or a miracle. :)
i wanted to do the snowball thing, as one commenter mentioned. however, i found myself just completely paralyzed financially. my monthly debt payments were nearly $500. i had recently been laid off, went through a big move, and then spent nearly a year making minimum wage - far below what i had been making at my previous job, when i could make payments. i had missed payments and late payments and cards going over their limits - it was a MESS. and i could not get it under control. no matter how much money i threw at my balances, it was all eaten up in fees and double-digit interest charges.
so, for me, credit counseling was a godsend. they negotiated with all but one of my creditors (who wouldn't participate in the debt management plan) to get me lower interest rates and lower minimum payments.
i do pay a monthly fee for the service (without looking it up, i seem to remember $15), but my monthly payment is now MUCH more manageable. i also don't have to keep tabs on due dates for 12-ish different credit cards. i just send one payment to the agency and they handle the disbursements.
using this awesome tool, i have brought my credit debt balance from around 13K to just over 9K in just over a year. i don't use credit, ever (it's a condition of enrollment). i save up and buy things with cash, and i am building my emergency fund. i could not have done it without credit counseling... or a miracle. :)
Written by Mabel Espino, June 28, 2010
I had $12000 dollars in credit card debt in 2007. I signed up with Consolidated Credit Card Services and it was the best thing I have ever done for myself. The stress of trying to figure out how to get control over the 5 credit cards I had balances with was overwhelming! Once I called them, set up my acccount, agreed to the $25.oo paperwork fee and the $400 dollar payment to be out of debt in 33 months was priceless to me. They got my interest rates cut by more than half and that was the secret to getting control of the balances. I have stuck to the plan and will be debt free DEC 2010. It was terrifying to get those statements in the mail in 2007 but now I can't wait because I can smile and be proud I took control of my life. Sleep is good now.
