Thursday, June 12, 2008

Seeking Therapy for Debt Management

After years of free spending -- $200 jeans, a silver BMW and other grown-up toys -- Michael Wagner had racked up $25,000 in credit-card debt and was behind on his mortgage and car payments. Creditors called night and day. It was a "hopeless downward spiral," he says.

Then, last November, the 34-year-old sales manager for the St. Louis Post-Dispatch joined the "Sunday morning breakfast club," a group of debtors who meet weekly over coffee and eggs to share money woes. Mr. Wagner says he is now on the road to financial recovery, helped by his discovery that "I wasn't alone."

Does excessive debt reflect behavioral issues? Probably!

After you cross a certain line it is almost an affliction. A condition, not unlike, an addiction to tobacco or alcohol. Fine in moderation but bad for you in excess. When spending or debt management gets out of control you can either seek help or solve the problem yourself. If you have ever tried to quit (smoking) cold turkey - you know how difficult it can be. Recasting yourself as a born again frugalarian is no less difficult. Support groups, education, family support and resolve will eventually lead to success. It is difficult but it is doable.

But first you have to admit that there is a problem. So what are the tell tale signs that you may be headed for trouble

  • You buy first, ask questions later

  • You have a vague idea about how much money you have in the bank

  • You have an even vaguer idea about how much debt you have

  • You think every coupon is free money and a buying opportunity

  • Your mail box is overflowing with product catalogues

  • You feel lost and disoriented without your credit cards

  • You are acutely aware and crave the latest fad

  • You always seem to run out of closet/storage space

  • You keep finding things that you have bought but don't remember buying them

  • You live today - spend today, consume today and buy today

If you truly want to break the habit and get out of debt - extreme measures are required. Consider draconian measures like eating only rice & beans till you are in the black. Yes - it can be done although it may be painful. But it is worth it!

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Potatorioles Fan said...

This was a great post. Many people don't realize that shopping and spending can be an addiction, just like drinking or gambling. If you realize that you're thousands of dollars in credit card debt, yet you keep spending more, you need REAL help.

Thanks for these great points of advice.

Sofia Kim said...

A series of debt can lead to a very difficult cycle of unmanageable finances. Find ways on reducing debt the cheapest way possible and enjoy financial freedom. Thanks for the article!

debt consolidation said...

When suffering from a large debt, consider your alternatives, negotiate with your creditors and know the next steps in consolidating your credit. Thanks for the article!