Your Relationship with Money

You may have the misconception that you are what you buy. You may
believe on some level that the more you spend, the more successful and
important you are. Developing that mindset is easy because all of us are constantly
bombarded with messages that equate money and stuff with success.
How often do you see ads promoting frugality, saving, or self-denial? If you’re
struggling to keep up with the Joneses, you may need to reevaluate your
friendships. The Joneses may be driving you straight to the poorhouse.

Recognizing emotional spending
Maybe you spend money for emotional reasons. For example, think about
what you do when you feel sad or disappointed, or when you want to celebrate
a success. Do you head to the mall? Do you click on your favorite retail
Web site? Do you treat yourself to an expensive meal or enjoy a weekend getaway
even though you really can’t afford it? If so, spending may have become
a sort of addiction. Everyone likes to reward themselves from time to time,
but doing so continually is a problem, and losing track of whether you can
afford to treat yourself is a cause for real concern.

If emotional spending describes your behavior to a T, you need to get a handle
on it fast. One option is to meet with a mental health professional; you may
qualify for help from a low-cost/no-cost clinic in your area. Or get involved
with Debtors Anonymous (www.debtorsanonymous.org or 781-453-2743).
DA uses the time-tested methods of Alcoholics Anonymous to help people
understand why they spend and to gain control over their spending.

Living for the moment
Maybe your problem is that you “live for today” and don’t think about tomorrow.
In some ways, living in the moment is great, sure — but not if you turn
a blind eye toward your future. How do you know if you’ve got this attitude
toward money? You probably

Use credit too much.
Don’t try to pay off your credit balances as quickly as possible, telling
yourself there will be plenty of time to do that later.
Save little, if anything.
Rarely, if ever, take time to balance your checkbook, check out your

credit reports and credit score, or maintain a household budget.
Such money attitudes are self-destructive, and they do catch up with you
eventually. Because you’re reading this book, they may already have.

Some Preliminary Questions

You can get a rough sense of your debt problem by honestly answering the
following questions. The more “yes” answers, the more work you have to do.

Are you clueless about how much you owe your creditors?
Over time, is a growing percentage of your household income going
toward paying your debts?
Do you ever pay your bills late because you don’t have enough money?
Have you stopped paying some of your debts?
Are you paying only the minimum due on some of your credit cards
because you can’t afford to pay more?
Are you using credit and/or credit card cash advances to help pay debts
and/or your basic living expenses, such as groceries, rent, or utilities?
Have you maxed out any of your credit cards, or have any of your cards
been cancelled for nonpayment?
Do you have little or nothing in savings?
Have you borrowed money from friends or relatives to pay your bills?
Have debt collectors begun calling you, and/or are you receiving threatening
notices from some of your creditors?
Are you having a hard time concentrating at work because you are worried
about money?
Are you losing sleep because of your finances?
Have you and your spouse or partner begun to fight about money?
Are you drinking more or using illegal drugs to try to cope with your
money worries?
Are you an overspender? According to Debtors Anonymous, most compulsive
spenders answer “yes” to at least 8 of 15 questions. Go to www.
debtorsanonymous.org/help/questions.htm and take the Debt Quiz.

Assessing Where You Are Financially

You’ve bought this blog, so we assume you’re probably at least a little
worried — maybe really worried — about your financial health. Perhaps
your debts have you biting your nails, and you’re not sure what to do about
them. We doubt you’re reading this blog for the fun of it! And you probably
don’t have a good handle on the true state of your finances. After all, it’s
human nature to try to avoid bad news.

We understand. Facing financial facts can be unsettling and even scary.
When you know the state of your finances, it becomes hard to ignore the
fact that improving your financial situation requires changing your lifestyle
and making some big sacrifices. But no matter how scary it is, confronting
the reality of your financial situation is essential — and the good news is that
seeking out this blog is a terrific first step to doing just that.

This chapter begins your next step: figuring out where you are so you know
where you need to go. Until you come face to face with the actual facts of
your finances, you may find it impossible to develop the resolve and selfdiscipline
you need to implement your plan of action. That’s why we begin
with this series of fact-finding exercises to get you going.

The more bad news you get as you complete these exercises, the more critical
it is that you get serious about dealing with your debts. The sooner you
do that, the quicker and easier it will be to improve your finances and the
less likely that your creditors will take some of your assets or that you’ll have
to file for bankruptcy. So let’s get going!