(Excerpt from Fall Newsletter 2010)
John has a well-paying job, but carries a debt load equal to half his salary. He spends compulsively, buying things he doesn’t really need. Because he also doesn’t keep track of his finances, he frequently bounces checks. John would like to get control of his spending, but hasn’t been able to rein himself in.
Sarah never spends money unless she has to and neglects self-care such as dental check-ups. She is self-employed but doesn’t make enough to cover her basic expenses and uses credit cards to pay bills when she falls short. Her debt load is a great worry to her, but she feels helpless to change the situation.
John is a compulsive debtor and Sarah an underearner, but their core problem is the same. According to Jerrold Mundis, author of How to Get Out of Debt, Stay Out of Debt and Live Prosperously, repeated debt results from dysfunctional or distorted subconscious attitudes and perceptions about money and self.
According to Mundis, a few of those distortions include:
I’m not worthy of nice things or a living wage.
I’m the greatest! I’m going to buy the best, whether I can afford it or not.
I don’t understand money. I’m not smart enough to handle it.
Money corrupts. If I have money, I’m bad.
If I don’t spend a lot of money on family and friends, they won’t love me or know that I love them.
I’m a special case. The system is stacked against me.
If any of these attitudes resonate and you’re having financial trouble, you may have a problem with compulsive debting. To help you determine if that’s the case, here are several warning signs, adapted from the 12-Step program Debtors Anonymous (DA):
1. Lack of clarity about your financial situation. Not knowing account balances, monthly expenses, etc.
2. Poor saving habits. Not planning for taxes, retirement or other predictable items, and then feeling surprised when they come due.
3. Compulsive shopping: unable to pass up a “good deal,“ purchasing on impulse.
4. Struggling to meet basic financial obligations.
5. Living in chaos and drama around money, such as using one credit card to pay another or bouncing checks.
6. Overworking or underearning; taking jobs below your skill and education level; not billing for hours worked.
7. Living in self-imposed deprivation; denying your basic needs.
As with alcohol addiction, it is possible to recover from compulsive debting and underearning with the help of a trusted therapist or coach and programs such as DA.
With that help and support, Sarah and John are facing the truth of their financial situations, understanding the roots of their behaviors and beginning
to see gradual improvement in their finances. Most of all, they feel better, no longer at the mercy of a compulsion they couldn’t control.