test.com - opt out of credit card offer


Menu



Google



Confessions of a credit-card queen - includes resources

Teresa Wiltz

This is not a pretty story. This is also not a happily-ever-after story. Far from it.

I am a financial screwup in recovery. There, I've said it. To out myself in a national magazine is to embarrass (a) myself and (b) my folks. Why am I doing it: Because I'm tired of living this way. Maybe you are, too. Over the years I've found writing to be the ultimate therapy. In putting fingers to keyboard, I hope to help myself and you too. At this writing, I have paid off half my debt and started saving with a 401(k) plan, a mutual fund and a savings account through my credit union. I am looking into ways to retire the rest of my debt so that I can live my life joyously free of debt bondage.

Recovery is the key word here. For despite the solemn swearing of this-time-is-the-last-time-do-you-hear-me-God, I have backslid again and again, succumbing to the lure of plastic and of giddy shopping sprees through the Big B's--Bloomie's, Bendel's and Barneys. I have let stacks of bills pile up unread on my desk. I have let the answering machine pick up when Citibank gave me a friendly little "reminder" call. I have counted the pennies until payday. I have felt the cold twist of fear in my gut that wakes me in the middle of the night and stays with me until dawn as I obsess about paying yet another whopping American Express bill.

I have also enjoyed moments of grace when all the numbers in my checkbook added up, bills were paid early, and, armed with a small but growing cushion of savings, I would even forget that it was payday. At such times I have learned that peace of mind is the greatest gift that anyone can give herself. It's a lesson I continue to learn again and again and again.

I'm not alone. Many Americans struggle with debt and poor money management: According to Ginger Apple-garth in The Money Diet: Reaping the Rewards of Financial Fitness, by the end of 1993 Americans owed $297 billion in credit-card debt. In one recent year, Americans paid more than $38 billion in credit-card interest alone. Almost 50 percent of us don't budget; as a nation we save only 4 percent of our incomes, while citizens in other industrialized nations save 12 to 18 percent. More of us are going bankrupt than ever before--the rate has tripled since 1980.

Black women are particularly vulnerable to financial woes, according to Iyanla Vanzant, author of Acts of Faith and The Value in the Valley. This country hasn't been kind to us. As a result, many of us struggle with feelings of inferiority that we battle by spending, spending and more spending. Furthermore, many of us simply don't earn enough money--and even if we do, we're faced with a culture that says if you buy that coat, dress, shoes, whatever, your life will be perfect. So whether we can afford it or not, we gotta have it. Says Vanzant: "When you believe there is a lack, no matter how much you have, it's never enough. So you don't budget because you don't want to see the lack. Then you rebel and act out by spending compulsively. Which leads to your feeling even worse about yourself. Now you've got a vicious ugly cycle. But we do it all the time."

But we're in denial about all of this. I know I was. Sometimes I still am. Money matters are our dirty little secret; we don't like to talk about money, hiding the truth from others and, most important, from ourselves. We keep our salaries a secret and tuck our bills away from prying eyes.

The funny thing is that many of us know what we need to do to keep ourselves financially healthy: Save at least 10 percent of our income, live below our means, ahere to a budget, establish short- and long-term goals, pay off credit-card debt. Why don't we do it? I'll give you an example from my own life: A fight with my boss was all it took to send me rushing to the nearest Gap. Whipping out my plastic--and having my purchases approved--made me feel all-powerful for a moment. Take that! The guys at American Express/Visa/MasterCard like me! They really, really like me! Two hours later, I was left with a slammin' outfit I didn't need--and a big bill that I had no business getting in the first place. What's more, I was still mad at my boss.

"If you're feeling lost, abandoned, rejected, depleted, angry, anxious on the inside, what you need to do is feed that void," says Vanzant, who has successfully fought her own battle of the budget. Feelings of inadequacy, she says, led her to impulsive spending. "But what we do instead is buy things to fill the void. That doesn't work. Most African-American women handle money from a consciousness of lack. So many of us move from experiences that have taught us valuelessness and worthlessness. We don't think we deserve money. We're constantly in a struggle with it or to get it. And anything you struggle with is going to fight you."

The good news is that even if you're wallowing in debt and don't know how you're ever going to get out, you can do it. It doesn't matter how old you are. Tiny Coleman, a retired nurse, realized that she was out of control at age 52. "I call myself a spendaholic," says Coleman, now 67. "It is a habit-forming kind of thing, like gambling. But I realized that there was something wrong with someone who would work eight hours a day or more and then pay everything out to creditors. I was an old lady before I realized how stupid that really was."

It takes some people a lot of time; for others, it takes a lot of money before they wake up. Denise Stinson, a literary agent in Detroit, racked up $27,000 in consumer debt before she decided that she'd finally had enough. "I could put a hurting on department stores," Stinson says with a laugh. "I would shop until I had all I could carry. Then I'd dump the stuff in my car and go back for more."

Today, both Stinson and Coleman are debt-free. How did they do it? They both developed the determination, discipline and fed-up attitude you'll need to make real change. You'll also need to believe that you deserve better and, most of all, you'll have to pay attention. Those bills aren't going to get paid off on their own. "You can't fix what you will not face," notes Vanzant.

I began facing my problem two years ago. I had to. I not only spent too much, but I also studiously avoided dealing with any aspect of my financial affairs: paying bills and parking tickets, filing taxes, balancing my checkbook. A few rude awakenings forced me to take care of business; but it came at a price. Not paying attention cost me a fortune in late fees and penalties. In desperation I started attending church again after many years' absence, where I laid my burdens down before a sympathetic minister. To my surprise, instead of giving me a sermon, he referred me to Freddye Smith, an African-American certified financial planner in Chicago. Yeah, right, I thought. A financial planner. Sure. But I made the call. It changed my life.

A word here about financial planners: They're quite expensive but great for general investment advice and helping you set up and stick to budgets. They charge anywhere from $50 to $200 an hour for their services, or they may charge a flat retainer's fee. Generally, to get your finances under control, you'll need to meet face-to-face with your financial planner for a total of five to six hours, according to Tom Grzymala, vice-president of the National Association of Personal Financial Advisors, one of several organizations that can give you a referral. If you decide to go this route, you're best off using a fee-only planner who is not working on commission and is not affiliated with any one company's financial products. If you're in deep financial trouble or can't afford a planner, a debt or credit counselor may be a better bet. They can serve as mediators with your creditors, negotiating lower monthly payments and interest rates. Debt-counseling services, such as the Consumer Credit Counseling Service, normally charge fees for their services--as low as $9 a month--on a sliding-scale basis. If you can't afford to pay, you won't be turned away.

I showed up for my appointment with Freddye, who has since become a friend, with my heart pounding and my hands shaking. Like a true friend, she told it to me straight: I could stop spending and start saving, or I was headed for real trouble. How can you tell if financial trouble is calling your name? Says Freddye: "You live from paycheck to paycheck. You have a feeling that you're making money, but you really aren't getting ahead. Creditors are calling you during the day. You can't stop yourself from spending, even though you know that you shouldn't. A crisis or some unpleasantness occurs, and out to the shopping center you go." Sound familiar?

Every two weeks or so I would sit down with Freddye, armed with my bills, and write out a budget. If the numbers didn't add up, I had to do it all over again, which I hated. But then she asked me something that stopped me cold: What are your long-term financial goals? I couldn't think of anything. I had become so passive about my finances that I believed things like owning a home, buying a new car and taking fancy vacations were dreams I'd never fulfill. Silly me.

With Freddye, I learned that I had the power to change my circumstances drastically. Once I started changing, changing got good to me. Today, Freddye tells me, she's proud of me. Even when I slip up, I continue to be committed to change. Here are some strategies that have worked for me and for others to tackle the emotional aspects of bungling budgets:

* Pay attention. Really. I hate balancing my checkbook; I hate facing the stark reality of what I have and don't have. But putting the moment off won't make it go away. Schedule a set time to sit down and face the truth. Do it a little bit at a time at first--even 15 minutes or a half hour is a start. It's usually not as bad as you think. And even if it's worse than you think, facing reality and taking action is incredibly empowering. Write down all your debts, every last one of them. If you have a computer, personal-finance software like Quicken or Microsoft Money will make the task that much easier. If you're behind in your bills, call your creditors and work out a plan to pay them off. Just do it; most creditors are just happy to hear from you. Keep yourself out of further trouble by paying attention when you're spending. Ask yourself: Why am I buying these shoes? Do I really need them or am I just upset because I wrecked the car?

* Get help. Tiny Coleman found help through a debt-repayment program in Chicago. With the aid of a counselor, she worked out a budget and a plan for paying off her debts. It took about four years, and sometimes she slipped up, but she did it. Now she's enjoying early retirement--and the judicious use of her credit cards. "I never got back into that world of having to have something new every minute," Coleman says.

* Consider starting a support group. For a while I would get together with two other women every two weeks to work out our budgets. We handed over our credit cards, checkbooks and ATM cards to Freddye (an act that initially caused my stomach to do major flip-flops). We scrutinized one another's spending and bills and kept one another on track. Our group disbanded when one woman's daughter became seriously ill, but the experience was invaluable. It helps to know that you're not alone.

* Just say no to accumulating more debt. "Debt grows. It's like a fungus or something," Stinson says. "Not being in debt was a whole new concept to me. But I realized that I didn't want to be paying for clothes that I bought five or ten years ago." Start living on cash. If you can't afford it, don't buy it. Or save up and buy it later.

* Cut up your credit cards, put them in a safe-deposit box or give them to a trusted friend or relative. Then pay off your debt--no matter how long it takes you. It took Stinson three years of aggressive bill paying to retire her debt. But now, she says proudly, she can give to her church, give to charity, and "if I want to go to Paris next weekend on the spur of the moment, I can."

* Consider therapy. With the help of a trusted therapist, I was able to pinpoint the triggers that made me want to go out and shop 'til I dropped. Now, whenever I get the urge to splurge, I'm usually able to catch myself in time. If I'm feeling low, I soothe myself with healthier and less expensive alternatives a good movie, a massage, working out at the gym.

* Stay away from stores. Shop only when you have something specific to buy--and then stick to that. This holds true whether you're headed for Saks or the grocery store. Need to fill up the time shopping used to take? Develop a hobby, get a part-time job to pay your bills, volunteer at a battered women's shelter or tutor a child. Stop focusing on yourself and give to others instead. You just might be amazed at what you get back in return.

* Nurture your spiritual side. Daily meditation keeps me centered and on track. For Stinson and Coleman, regular church attendance keeps things focused.

* Realize that you are so much more than the things you own, your checking account or your overdue bills. Be patient with yourself. You might backslide. For me, last year was a doozy. A childhood friend was killed in a plane crash, a beloved great uncle passed away, a man I once dated died in a car accident, and a dear friend succumbed to AIDS--all within a five-month period. I buried my grief with shopping. Somehow going out and buying a dress and shoes for the funerals distracted me from thinking about the deaths and the sorrow they brought. But it was a short-term fix with long-term consequences. I went back to ignoring my bills and racked up even more debt. Worse, I suffered from a crisis of confidence: I'd had the best intentions and had tasted success, and still I'd screwed up. How could I know that I wouldn't do it again? Well, I can't know. Life happens. The key is to shore up your resources so that the likelihood of slipping is lower. When and if it happens, dust yourself off and keep steppin'. Forgive yourself for being human and then congratulate yourself for caring enough to try again. Advises Vanzant: "Every day that you keep it up, say `God, I kept it up today. Thank you.' Focus on the good, not on the lack." In retrospect, my slipup wasn't as severe as I feared. I've managed to maintain some good money habits in the process and saved a little, to boot. I'm not where I was yesterday. And neither are you.

Teresa Wiltz is a reporter at the Chicago Tribune and is working on a book about digging out of debt

RESOURCES

Help is out there. Here's a listing of organizations and books that can put you on the road to financial health:

Organizations

* National Foundation for Consumer Credit, (800) 388-2227.

* Debtors Anonymous. Send an SASE to Box 400, Grand Central Station, New York NY 10163-0400.

* Institute of Certified Financial Planners (ICFP), (800) 322-4237.

* National Association of Personal Financial Advisors (NAPFA), (800) 366-2732.

Books

* The Secret Meaning of Money How It Binds Together Families in Love, Envy, Compassion or Anger by Cloe Madanes with Claudio Madanes (Jossey-Bass Inc., $25).

* How to Get Out of Debt, Stay Out of Debt and Live Prosperously by Jerrold Mundis (Bantam Books, $6.50).

* Money Is My Friend by Phil Laut (Ivy Books, $5.99).

* Get a Financial Life Personal Finance in Your Twenties and Thirties by Beth Kobliner (Fireside, $11).

* The Money Diet Reaping the Rewards of Financial Fitness by Ginger Applegarth (Penguin Books, $12.95).

* The Abundance Book by John Randolph Price (Hay House, $7) and The Trick to Money Is Having Some by Stuart Wilde (Hay House, $10.95), both available through Inner Visions Worldwide Network, (888) POWER-27.

* Think and Grow Rich A Black Choice by Dennis Kimbro and Napoleon Hill (Fawcett, $5.99).

* Acts of Faith Daily Meditations for People of Color by Iyanla Vanzant (Fireside, $10).

COPYRIGHT 1997 Essence Communications, Inc.
COPYRIGHT 2004 Gale Group