Ask the Readers: How to Cope with Spending Addiction?
Published on - September 5th, 2008 (Modified on - September 8th, 2008) (by J.D. Roth) Nicki wants to get out of debt, but she can’t — she has a spending addiction. She’s hoping that other Get Rich Slowly readers can give her advice. Here’s an abridged version of her story:
I am writing for advice on managing debt. I’ve been reading your website for the past month because my boyfriend recommended it after he noticed I spend a lot of money. Here’s a summary of my debt:
- Visa: $9900 at 11%
- Mastercard: $10,000 at 11%
- Car loan: $4800 at 8.5%
- Student loans: $12,500 at 11% (I think)
I earn nearly $2800 a month after taxes, and my expenses total just over $1400, leaving me about $1300 to put towards my debt. I’m nearly 26. My goal is to be debt-free by the time I’m 30 years old. I want to start a family then, but cannot do so with so much debt. At this rate, I won’t even be able to get a mortgage.
My original plan was to pay off the Mastercard and to use the Visa only for emergencies. Unfortunately I spent money on clothes, shoes, etc. At the same time, I was moving and buying new furniture, and before I knew it I had two credit cards with $6000 debt. The closer I got to my credit limits, the higher they would be raised. Sadly, I kept spending. I truly believe I have a problem with spending and saving, similar to a drug addict.
I know what I am doing is harming my finances, but I just do not know to control myself. I lack discipline, and I do not know how to gain it. I’m not averse to working hard, and I always intend to follow my debt reduction plan — I just need help in maintaining focus and staying on track.
Do you have any advice for dealing with spending addiction? How can I attain the principles of frugality? I am desperate!
Nicki’s e-mail hit home for me. What she describes is exactly the same relationship I used to have with money. Last year, when I wrote about my own experiences with compulsive spending, I shared six tips that eventually helped me to overcome my problem. These may also be useful for her:
- Cut up your credit cards. Do it now, and don’t make excuses. If you’re a compulsive spender, getting rid of your credit cards trumps all other considerations. (Don’t cancel the accounts — just cut up the cards.)
- Only carry cash. Don’t carry a checkbook or a debit card. Your goal should be to make spending as inconvenient as possible.
- Track every penny you spend. Use Wesabe or Mint or Quicken or Microsoft Money. Use a notebook if you have to. Just write down where your money is going. You must learn to see the spending.
- Play mind games. Use the 30-day rule to control impulse shopping. Tax yourself. Develop tricks to circumvent your urge to splurge.
- Avoid temptation. Stay out of the mall. If you spend too much on knitting, keep away from the yarn store. Don’t set yourself up for failure.
- Ask for help. Seek support from your friends and family. Listen to them when they earn you about your behavior.
(For more detail on these techniques, read my six steps to curb compulsive spending.)
Overcoming addiction is not easy, but I believe Nicki can do it. Admitting she has a problem and asking for help are great first steps. As she gets her spending under control, I think Nicki will find it easier to get out of debt. In fact, she may be surprised at how addicting saving money can be.
Do you have any advice for Nicki? How can she cope with her spending addiction? What’s the best way for her to tackle her debts? How can she learn to be frugal?
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The balance and interest rate is a bit frightening, but that’s entirely doable if one buckles down to get it paid off.
But that’s not the problem. The problem is the spending habit to begin with, which I am glad that it is being addressed. As the author states, to realize that one has a problem is the first step towards recovery.
However, addictions of any kind may also indicate a root cause that has nothing to do with the addictive behavior in the first place. (In this case, spending.) Perhaps some kind of psychological insecurity? Perhaps one was a victim of abuse? Or is it something more abstract, like bi-polar disorder? Finding out the root cause of the addiction is the most important thing, because you can’t cure something if you don’t know exactly what’s causing it.
The second thing is to look around and consider some kind of support group or counseling. Addiction of any kind isn’t something you have to or should tackle alone, and depending on the root cause, it may also require professional counseling.
The third thing is to realize that having addictive spending doesn’t mean that you are broken somehow. It just means there’s an issue that needs to be worked out, but you are not a lesser person. (In fact, being made feel less will probably only worsen your addictive behavior.)
The simple fact is, nobody is perfect. And it’s OK if we are not perfect. The question isn’t whether we have flaws or not. The question is what do we do in light of it. Adversity can breed greatness, and I hope that you will come out of this better than ever.
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JD had a good list to start with. (Ah, this is so much like struggling with weight — compulsive behavior is compulsive behavior . . . )
I would add that Nicki should become part of a community of people who wrestle with the same issues. I’m not sure it matters whether she interacts with the people over the internet or in real life; each has its strengths. She needs the daily support and a place to openly discuss the feelings that drive her to spend, to ask for new strategies to try when she runs out of ideas, and to have a place to celebrate the victories that are only understood by others struggling with the same issue.
If she’s not quite ready to start, I would suggest she read at least the first few chapters of Your Money or Your Life, which I found invaluable in getting a handle on where I was financially, how to get out of debt, and how to set a path in the right direction.
I wish her the best in finding her way.
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I concur both with JD’s practical tips, and the idea that she might want to explore why she feels the need to spend.
From what I’ve seen many people who buy a lot of things do so to fill a gap. Maybe they’re doing a job that they don’t really enjoy and buying nice things makes up for that. Anyway if you address the underlying issue it might help.
Sometimes there isn’t a reason, but if the urge to spend is compulsive, there often is.
Aside from cutting up cards, I’ve found that the best idea is the 30 day rule, it’s one that I use a lot.
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I found myself in the same situation as Nicki did about a year ago. Although the numbers weren’t has high, I was overspending. From experience, I can tell you that the best advice offered by GRS is NOT to set yourself up for failure.
In my case I had an internet shopping problem. Anytime I found myself tempted to click “Purchase” I would stop, take a few seconds/minutes to regain control of myself, and close the web browser. I even went one step further and started applying the same amount of money as my potential purchase to my debt. (Most of the time these expenses were books, DVDs, and electronics ranging from $10-$150.) As an example…
One day I caught myself looking to purchase an MP3 player that cost $125. Before clicking “Purchase” I stopped myself, thought it out, went to my bank online bank account, and applied $125 towards my credit card debt. After a few times of doing this I noticed my account balances shrinking, but also my credit card debt shrinking. Not only did this help me start to pay off the debt, but it eliminated my online shopping habits because I realized I didn’t have the money to even pay off the debt, let alone buy the “stuff” online that just added to my debt.
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Put mail-order catalogs in the recycling bin the moment you bring them in from the mailbox; ditto for the advertising supplements in the paper if you get the paper. Don’t read magazines. Keep a gratitude journal. Find out whether you can get free counseling through an employee assistance program at work.
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I find one of the hardest things is to stay motivated. Spending is a right now thing while earning is usually a monthly type thing. You have to set goals and see the progress you are making toward becoming debt free (charts, excel spreadsheets). Like everyone mentioned, the buddy system helps tremendously to keep you in check. Someone who will hold you accountable for your actions other than yourself because you can usually talk yourself into spending. Visiting the library for all the top money management books is also a big help. I enjoy reading stories of people who have been in the same situation and accomplished their goals.
Good luck and stick with it.
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Congratulations to Nicki for taking the first step. The advice from JD and readers (so far) is excellent.
Nicki, you have been sent an angel in the form of your boyfriend. Do not lose sight of this. Enlist his help at every opportunity. Perhaps ask him to take over your finances temporarily and provide you with weekly spending money. Yes, there will be times when you resent his help. But do not refuse it, disregard it or diminish it. An angel can leave your life just as easily as he walked into into it.
This I know.
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I’m a fan of the boards at fool.com. They are great at tough love. There have been some pretty miraculous stories where people show up with 6 figures of debt and within 1-2 years are debt free and are the go to guys for advice.
http://boards.fool.com/Messages.asp?bid=100145
Unfortunately, it costs a bit of money to post.
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There are some things you may be able to do to help, on top of the advice already mentioned.
Can you further reduce your spending? When your lease is up, can you move to a smaller apartment or share a place? Before I bought a place, I was living in a house with 2 other people. The monthly expenses were $600 including utilities. On top of this, it was a blast.
Of course, you’ll want to stop eating out for awhile and start shopping at discount grocery stores. This has an added benefit of learning to cook yourself, which is cheap and fun.
Can you sell some of your stuff? Can you replace some of it with cheaper stuff? If you can sell your sofa for $1k and get a smaller or older used one on craigslist for $200, your car debt is then down to $4000.
If you live in a place that has public transit, consider selling your car. The bus isn’t for losers.
You’re going to need to make some lifestyle changes until your debt is paid off. You’re going to need to accept this.
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It is important to remember that this does not happen overnight and you WILL have setbacks! Don’t be too hard on yourself! I like JD’s comment “In fact, she may be surprised at how addicting saving money can be.” Its almost as if you have to take the rush you get from spending and refocus it toward being creative about saving and paying bills! The rush you are going to get from sending that last CC payment is going to be terrific! This will be a daily challenge that you can celebrate at the end of every month when you tally the numbers! It’s a challenge, one that is not out of your reach!
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I’m going to add one more tip that has helped me immensely. Limit your exposure to marketing. Get rid of cable and limit your exposure to TV in general (We use Netflix only now). Don’t buy magazines.
I find that if I don’t know about products, I don’t want them!
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I can’t remember the book that gave me this advice, but I started treating using credit as if I were an alcoholic: I took it one day at a time. I believe the phrase the book had was something like: Just for today, I will not debt. (Grammatically incorrect, but you get the point.) It was extremely helpful to me when I was spending more than I earned, and now it has become a habit.
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What do you do to help someone that you know has a spending addiction, but either will not admit to it or does not see it?
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If it’s an addiction, JD is right, you need to cut those cards–NO excuses. Remove the temptation entirely.
Secondly, you have to figure out why you feel the need to spend. What is it you’re buying? Why do you want it? Is it filling a void or giving you a high?
I used to spend money to feel good about myself, until one day I realized that my life is great, I had a wonderful family, and buying a dress I thought I had to have wasn’t going to dramatically improve my life, but putting the money in savings could dramatically improve my life if, say, I lost my job or my husband lost his. Now saving gives me a sort of high.
Another thing you might try is to use a website like Wishlisting to “save” anything you think you want. I find that if I “save” something there for a couple of weeks, I can look back at it later, and I don’t want it so much. Find ways to curb impulse spending, and you’ll learn to step back and use logic before you buy.
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In one of my posts I described how I deal with unnecessary shopping. Feel free to check it: http://www.kacperwrzesniewski.com/how-to-restrain-from-unnecessary-shopping/
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For every credit card I have/had, (I carry 4, all of them paid off every month), I called up the issuing bank and explicitly ask them not to bump up my credit limit. In addition, I never remember the PIN (so no cash advance at ATM), and I shred all the cash advance cheques they so “kindly” send me every month or two (if I haven’t explicitly told them not to send them to me any more).
Granted, I don’t have a spending addiction as bad as Nicki’s, but I do then to go on a spending spree and spurge once in a while.
Having a frugal partner helps curbing the temptation. You are very fortunately to have a boyfriend who really cared about you. For me the thought of “he wouldn’t like it if he knew” was generally a great deterrent for (further) spending, but that sometimes make me feel bad after an impulse buy.
I suggest Nicki to build a very strong vision of her future — her dream home, comfortable retirement, tour around the world, etc. — and keep a visual reminder of it in her wallet. The next time she pull out the plastic/cash for that pair of designer shoes, that goal will stare back and her and scream, “you want WHAT instead of me?”
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Nicki,
The first step is to recognize the problem and you have done so.
Second, if you have a mental health problem with money (addiction as you call it) you need professional help. If you can’t afford prof. help seek out a 12 step program like http://www.debtorsanonymous.org/
Third, follow JD’s advice. No credit cards ever, only use cash. Track your spending. Set up a budget, etc.
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Spending is a hard habit to get rid of. I think JD has a great list.
Savings can become a great habit that is also addictive. As she starts paying off her debt she should also set up a savings plan.
As she sees her debt load going down she will also see her assets going up.
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I agree with the comments here. Sometimes the shopping addiction is all about just trying to be somebody you are not and trying to make up for simple issues at home, like too much clutter. Often our home is overwhelming, so we don’t want to be in it and we think buying the “right” things will make all okay. It can, but doesn’t have to be a serious underlying problem that’s driving one to shop, but obviously the impact to one’s finances is serious. The good news is that Nicki wants to change. It takes a lot of courage to face those finances. First thing she should do is find out exactly how much she owes on that student loan. Specifics are needed when facing one’s finances. Then with her income after expenses she should start tackling the debt. (Personally, I still think the snowball plan is the best. Seeing more immediate results makes sense for someone with a shopping addiction; i.e., someone used to instant gratification.) Instead of shopping, she can focus on her home and purging items through return (chances are she has stuff she’s never even used, perhaps with tags still on–find the receipts or credit card bill and take them back!), resale (if possible), or charity (holding onto stuff because you paid so much for it, but don’t want it, only hurts you through guilt, being overwhelmed by the stuff, and so on). With her shopping addiction, she probably has so much stuff in her home that she never ever uses. She should take baby steps for the decluttering, so it doesn’t become overwhelming, but focusing on those actions will be very satisfying (even addictive like J.D. says) and keep her focused and away from shopping.
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I struggle with this as well, but I congratulate myself on getting much, much more responsible within the past 6 months. What has worked for me is a combination of things:
1. Don’t go even go near malls, shops, catalogs, shopping sites, etc. I go to the grocery store with a list and now do the same when I go to buy clothes. I have to really NEED something and then I will research where I can get it for a good deal.
2. I read several personal finance blogs, including this one, daily. Reading about other people who have succeeded is so encouraging. Also, you can learn some great tips along the way.
3. I created a realistic budget that included some “play money”. I allow myself $20 a week to go out with friends or shopping, etc. It’s not much, but with planning I haven’t felt at all deprived.
4. I faithfully update my budget with my spending. I also have committed to sending a set amount towards debt each money and by saving elsewhere in my budget it has started to feel very rewarding when I can send even more than I planned towards credit cards.
Good habits take a little bit of time to take hold. I still trip up, but I have committed to larger goals (like buying a house and having a wedding) that are much more exciting than a new pair of jeans.
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The first step is recognizing the problem and asking for help- and Nicki should feel good that she has done that. I second the suggestion that she tie into a group(s) that deals with the various aspects of this- debt, frugality,credit. I think internet is better than human- since humans tend to meet infrequently in person(1X a week or 1x a month)- and it is easier to “confess” when you don’t actually do it in person. Plus there is a much wider range of experience/suggestions available.
Good luck, Nicki-I believe you can do this – and be able to have a home and a family by 30.
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One habit I suggest, which must be accompanied by cutting up the credit cards, is to pay your bills on payday. If you write the checks and mail them on the same day you get the money then you won’t have the oppportunity to spend the funds anywhere else.
I also recommend starting a Life Happens savings account at the same time you’re paying down the debt. Start it at a bank you don’t already use, one that’s inconvenient to get to, and don’t get an ATM card. Make depositing to the account just one of the bills you pay every payday so that you get in the habit of saving. The goal would be to get the account to about $1,000 so that if you have unexpected car repairs or doctor bills or the like you don’t have to go back to your credit cards.
FWIW – I agree that you shouldn’t be too hard on yourself if you slip a little, but also, I think you shouldn’t be too easy on yourself. If you spend your grocery money on shoes, forgive yourself but then also survive on ramen noodles, rice, baked potatoes, and vegetables until you get your next budgeted money for groceries.
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Congratulations Nicki. You’ve realised that you have a problem and you’re willing to tackle it. That’s the first step towards financial freedom.
J.D’s advice is excellent so I won’t repeat it. I will suggest that you get some support in your quest to pay down your debt. An excellent support is the Women in Red group at MSN Money. They are a wonderful, supportive group of women, each with their own story, who are cheering each other on as they face their finances.
http://articles.moneycentral.msn.com/SavingandDebt/Advice/MeetTheWomenInRed.aspx
Good luck!
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Some excellent advice provided by both J.D. and his readers above. They have all given great tips on the mechanics of getting out of debt, controlling your spending, etc. However, you have to have a real philosophical shift to finally beat back spending too much money.
I recommend reading the book Your Money or Your Life for some thoughts on frugal living. Surround yourself with positive examples of how to handle money–blogs, magazines, library books, etc. Give away some of your possessions to those who need it. Volunteer your time for those less fortunate. Examine how much money your earn per hour after factoring commute time, lunches out, work clothes, etc. (your real wage, not what your paycheck tells you it is) and when you want to buy something think about how many hours you have to work to pay for that item. You might just find that it isn’t worth the exchange of life energy.
Best wishes on your journey to debt freedom. You can do it, one dollar at a time!
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I had a similar problem (between car, student loans and credit cards, was up to about $60K), but am now debt free!
A couple of things that helped me (in addition to some tips already offered–definitely use those!):
-Create a spreadsheet or some type of document where you track your debt reduction. Every time I would make a payment on something, I would enter the balances of ALL of my debts and then calculate the amount and percentage my total debt went down. I became OBSESSED with that number going down and when it didn’t go down from month to month, I would get pissed. Eventually, when I would go to make a purchase, I would think about how it was going to impact my spreadsheet. If it was going to mess up my progress, I didn’t buy it! Seeing that big number go down was a big motivator for me. Even if it only went down a little bit each month, I was that much closer to the big 0!
-When you go to buy something, just tell yourself NO. You have been living without it, you can keep on living without it. You can buy it when you actually have money (you do NOT have money if you have that much debt). Your life is not going to improve by having a brand new couch instead of your hand-me-down couch in that new apartment. You will regret this purchase later… Learning this sort of self-talk was key for me. You’re the only person in charge of your spending choices, choose wisely! Develop a Sybil-style alter ego if you have to! Make sure SOMEONE in your head is telling you not to buy things that are only going to worsen your financial situation. There will be plenty of time when you’re out of debt and have a positive cashflow to buy things that you’d like to have in a smart way.
Good luck! It’s not always going to beeasy, but you CAN do it!
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Tracking your spending is good, but planning your spending is better. Use an envelope budgeting system. Develop a plan for every dollar you bring in. You already know how many dollars to earmark for living expenses. Now make sure dollars are getting earmarked for debt payoff. You’ve already calculated your debt and set a date goal for having it paid off. That’s how much per month? That’s how much per paycheck? Now you know how to earmark those dollars. Don’t let any dollar come in or sit in an account unless it has a specific purpose assigned to it. Then, don’t spend unless you have the necessary dollars for the particular purpose. PLAN! Manage your money rather than let you money manage you.
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This is all great advice. I would add two things for Nicki not mentioned:
First, a slight spin on removing tempation. You will have it, so every time you do, do something else. For example, every time you want to spend, go to the gym or go for a run. This type of outlet can be a great way to have a different “release” mechanism. Of course, you can always try the rubber band on the wrist too!
Second, my guess is you actually have decent credit if you paying your bills. Look into a debt consolidation loan to reduce the percentage rates and potentially even get some of the amounts reduces (interest removal).
Good luck!
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When you get paid, immediately pay your bills and then make a payment to your credit card or move money to a savings account. Again, this makes it harder to access your money unless you really need it. And, you won’t want to withdraw money from the savings very often, since you are only allowed a few withdrawals per month.
(I get paid twice/month and make a payment to my credit card each time I get paid, so I make lower payments frequently instead of trying to come up with a large payment once/month).
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I would like to mention that closing credit cards IS important. Cutting up my credit cards made no difference. I had all the account numbers memorized. Also, department stores are more then happy to look up your credit card number with their store and run it for you. I know this to be true from experience. Just my two cents… having ended up in collections for YEARS and eventually SETTLING the debts, it would have been far better for my credit score to have simply closed these accounts years ago.
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Such good advice you’re getting from everyone! I just had to add two thoughts:
You can load up on THINGS there that will give you some satisfaction – books with shiny covers, even cds and dvds – usually free [my library charges $1 or something for dvds but most don't] and you’ll have the feeling of a successful shopping trip without the expense. If you really must shop try a thrift store or a few garage sales – you may be surprised at what you find and either way you’ll spend MUCH less – and spend cash!
1. sometimes you shop because you’re not busy enough or have nothing occupying your mind – so occupy your mind tracking your money, calculating payoff dates, reading the books everyone’s recommending and the blogs as well
2. when you REALLY feel like you want to shop start at the library
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I disagree on the “only carry cash” advice.
If the goal is to make spending as inconvenient as possible, cash is the wrong answer. Everywhere takes cash. I only carry my debit card around. Even though the number of places that take credit/debit cards is on the rise, it’s still more inconvenient for me than having cash.
I have far too many entries in Quicken with a payee of “cash pixies”; when I have cash on me it just evaporates.
What works for some doesn’t work for others, of course. The best advice is to read all the advice and then tailor it to yourself.
Good luck!
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good luck to Nicki! I truly believe that wanting to change and recognizing the problem are most of the battle. the rest is just learning some financial discipline and knuckling down for the “long haul”. If I were Nicki I would shop around for lower interest rates and think about picking up another job to ramp up her pay off schedule. And, if you are working you can’t go shopping! I would also set aside some savings. this is because I think that seeing savings grow is one of the best ways to learn how to save and live more frugally. If there is a way to work in a field that assists with student loan payoffs, I would really consider it too. Nicki is doing a very smart thing and I wish her all the best.
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Debtor’s Anonymous, Debtor’s Anonymous, Debtor’s Anonymous. We use compulsive behaviors to make us feel comfortable when we aren’t – in order to overcome these compulsive behaviors, we have to learn to live comfortably without them. Depending on the extent of your problem, this is probably not something that you can teach yourself. Ask for and obtain the support of people who have experience with your problem and have overcome it.
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Just a quick thought, consolidate and refinance your student loans. This process is not credit dependent, and mine are currently at 4.25%. You can save a nice chunk of money, and be able to get the credit card/vehicle debt out of the way faster.
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Here’s an old-fashioned idea that can help you adjust to using cash on a budget. Put money in monthly envelopes for spending on different things (food, gas, clothing, fun, etc.) You’ll see the affect to your budget every time you take money out.
And you should have a “fun” category each month, although it should be modest — depriving yourself completely can backfire if you’re not careful. There are plenty of ways to stretch a $30 or 40 monthly fun budget. And then if you really want to go to a concert or another large expense, you can save that budget up for two or three months.
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Hi. Some sort of counseling, group or individual would definitely be helpful. I’m not sure that replacing an addiction to spending with an addiction to savings is really the best long-term solution; balance is the key, and I think couselling can help with that.
and I want to strongly support something cherie at 25 said — find other things to do! Distraction via something physical is one idea, if you schedule exercise and cooking and cleaning for non-work hours there is less time to shop or even to think about shopping. Or a slowish hobby, like knitting or quilting, where you can see progress from the time you put in but you also won’t finish immediately — and you can make presents instead of buying them!
Also, make it difficult to shop in as many ways as possible; and make sure to ask on-line retailers to stop sending you email. Maybe give up your car keys, too, and carpool to work so that you’re not stopping off after work to shop, and do other shopping with that supportive boyfriend…
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I found myself with $15k in credit card debt a few years after graduating college.
What saved me was my FEAR. One day, I was looking at my CC bills, and made a realization that it will take me a LONG time to pay it all off, even though I was paying 2 times the minimum required payments. It truly, honestly, SCARED me. It was a HUGE wakeup call.
My “bold” strategy was to buy a house, get some roommates (who will pay for most of the mortgage payments), and use what I can save towards paying off my debt. I also started selling off expensive hobby equip (for me, that was computers I used for video editing). In addition, every 5-11 months, I would look for a 0% balance transfer (intro rate) credit card to transfer my balances as I paid it off.
It took me 2.5 years to pay off that $15k of debt. My rent at an apartment was costing me about $800 a month. When I bought a house, my mortgage was $1200 a month (incl PMI), but the 2 roommates I had paid for about $1000 of that (I even rented out the master bedroom of *my own house* to get a higher rent – friends thought I was crazy).
But even after paying the debt off, and learning to pay off my CCs every month in FULL, it took me a few years to get my mindset into SAVING mode.
Now, I’m insanely frugal. People make fun of me. But honestly, I do it for myself, not for them. I try to think of the future, and not now – probably more than necessary. Currently, I’m 35, and 22% of my salary goes into retirement. It’s overkill, and I plan on bringing that down to between 15-20% – but I need to make sure. I also want to retire (maybe go teach high school) between 50 and 55 and live financially happily.
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I second, third, and fourth Debtors Anonymous. Do not pass go. Do not spend two hundred dollars.
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I’m a 22-year-old with $9000 in debt. I’m paying it down slowly, but I’ve made a lot of sacrifices in my life to be able to do it (like moving back in with my parents. It’s hard living in their house again, but I’m saving $500/month by paying my parents a much smaller monthly payment). I haven’t cut up my credit cards, but I put them each in a sealed envelope with the balance and APR written on it. That seems to be enough for me to keep away from them.
Also, I downloaded a Debt Reduction spreadsheet (found http://www.vertex42.com/Calculators/debt-reduction-calculator.html) to give me a good visual of how long it’ll take me to pay off all the balances. Knowing a time frame for when each card will be paid off definitely helps with my motivation. And although $9000 in debt is overwhelming for a 22-year-old with a decent-but-not-great salary, I was pleased to see that even with a low starting snowball amount (about $50) all of them will be paid of by March of 2011. It’s also pretty motivating to see how much interest I will have paid on each card (thousands of dollars, wasted!).
I think visuals are important. With abstract thoughts, it’s easy to start feeling hopeless and be pulled into a mindset of it-doesn’t-matter-I’m-too-far-gone. You need to make small, realistic, achievable goals that will give you the confidence and knowledge to know that you can overcome this. Good luck!
[And thanks, JD, for a great site. I've been reading for months and this has helped me change my life.]
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I millionth Debtors Anonymous. For a good, solid, and cheap intro to the DA principles, find a copy of How to Get Out of Debt, Stay Out of Debt, and Live Prosperously by Jerrold Mundis. Sometimes the hardest thing about breaking the cycle is believing it can be broken. Mundis’ book is a classic.
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Try finding an addiction support group. There are support groups for every addiction. And for the loved ones of those addictions. And a twelve step program for every addiction. I believe I saw something for spenders annonymous or something like that in the back of a Melanie Beatie book, on of them in the Codependent No More series. I would also seek help from a therapist. There are a lot of steps to addressing an addiction, if addiction truely is your problem. Taking steps to eliminate temptation, like cutting up credit cards and staying out of shopping centers, is one step. Treatment is another.
Good luck!
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Here are some things that helped me, even though once in a while I will have a relapse!
I throw away all junk mail, including catalogs and sale store ads, don’t look just throw, there is always a good deal somewhere.
Sometimes the people we hang around with influence us to spend, this one is hard but try doing things that either cost nothing, or maybe even find some one else to hang out with. This one is poisonous.
Since I am trying to get out of debt I really question why I am buying something.
I grab books related to personal finance and read them to stay on track. Such as: Are you being suduced in to debt, by John cummuta.
It is a journey if you fall off don’t beat yourself up to hard, just get back on and go again.
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I recommend to use an Accountability Partner to help on your journey to becoming debt free. Whether it is a close relative, spouse or close friend, have someone that you can share your plan with and make weekly checkups to review your current financial state.
Also, formulate a plan and set up automatic accounting to apply the funds to where they need to go prior to you being able to spend them. If you do not have the access to the credit cards (by following JD’s recommendations to cut them up), then you cannot spend money that is not in your bank account.
More than anything, believe in yourself and know that you can beat the “addiction” in spending. It seems like a desire is there but the decision has to be made to take control of this portion of her life. Once that decision has been made, you will be able to beat this issue! I wish you the best of luck!
Stay Disciplined!
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Ahh been there done that. She can do the Ice Glass method, which I will have a post coming on 9/7/08 in my blog. Put all credit cards in a glass full of water, and hide it in the freezer. Seemed like a good method to stop impulse shopping.
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One possible solution to her credit limits however is to pay a card down and then call the company to lower (yes lower) the limit to a more acceptable range (say $500-1000) and restrict their (the companies) ability to automatically up the limit. Yes you can do this with most CC companies.
Now she has less of a limit and can max them out all she wants it will no longer be an issue.
Spending addicts will always have max limits so restrict the limit and restrict the damage.
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I used to be the exact same way. A few things that worked for me were not shopping. Window shopping is dangerous!
Also being a female I felt it was important to always have a credit card with me for emergencies (flat tire, car breakdown, etc). I went to the motley fool site and found this little envelope you print out and cut out then put your credit card in it. Then to use it you have to break the seal. It makes one more barrier and makes you really think about what you are doing. It worked for me and my husband!
We are now out of debt (not just by doing this) but it did help significantly!
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cut up the credit cards, get a 2nd job
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Try doing The Work when you feel the urge. It’s a way to examine your beliefs, which in turn fuel your emotions and compulsions. It’s helped me immensely. You can also call their toll-free number for a trained facilitator and find a group in your area. Good luck!
http://www.thework.com
http://www.byronkatie.com
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I am trying this one, withdraw 1/3 the normal amount each time you go to the ATM (provided your bank refunds your atm fees or use your own bank branch) in addition to leaving the CCs home. It makes spending a bit more inconvenient when you have less cash on hand.
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Nikki, congratulations for seeing that you need help and seeking it. That’s a brave thing to do!
Something we’ve done for my SIL, who has problems saving money, is to act as her personal bankers. Basically, we set up a savings account in our names, but for her money. Each month she’d send us a check for an agreed-upon amount and we’d deposit it in the account for her. Because it wasn’t in her name and she didn’t know the number of the account, she couldn’t access it. When she needed the money for a savings goal, we’d withdraw it and send it to her.
Obviously, this is only a good idea if you have someone you trust implicitly with your money. But if there is someone you can trust this way, it’s a way to take the money out of your immediate control. There might be a way you can adapt this concept to help you pay off your debt as well. Good luck!
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