I have poor money management. I took out a loan for 4,701 dollars in Feb '05 to pay off some bills. I ended up spending it on vacations, clothes, personal stuff. It's like every time I get money in my hands, I go crazy!!I paid some bills with the money but the main bill was a judgement for Citibank for 1690. Now my wages are being garnished!!! I beat myself up everyday for wasting that money the way I did and not paying off bills. I can't stay on a budget whatsoever! I want help but I also know that I need more self control. Does anybody know of a Financial advising service that helps people like me??
Congratulations on admitting it! that is the first step to recovering from a habit. IMO, a financial expert can't do anything for you until you change from within. Go to the library and get books like "the millionaire next door" or suze orman or ric edelman. <<i just read "the millionaire next door" AGAIN today>> Anything having to do with budgeting and finances. Next set-up a budget and start tracking expenses. It is all baby steps and don't take on or expect changes to occur right away. you may start with increase savings by $20/month or pay above the minimum on credit cards. ALWAYS have a goal to work towards. Get your spouse and children to help. Whether the goal be to pay off debt or establish an emergency fund, EVERYONE needs to be on board. How is your credit? Despite spending habits, has your credit remained good or has it taken a beating?
I agree with Jen - read, read, read, and then read some more. Educate yourself about money. Once you realize how much money you are wasting on items that have no value you will see the light
Thank you. I watch Suze Orman's show from time to time and I kept telling myself that I need to read her books. Budgeting is so scary to me because I am an impulse buyer and I love clothes and shoes. But I am in debt. This has been a problem for me since I was a child. When my parents gave me money for my allowance, it was gone by the next day! It followed me through high school and in college and the cycle has not stopped but I want this to end. Constantly blowing money on things I don't really need. I blew over $5,000 in 2 months and I have nothing to show for it. I feel horrible about this but it is a lesson learned. I have no kids, not married so there's no excuse really! Thanks again to both of you for your advice
Make a game of it. First make your expenses visible, and determine what your essential expenses are, and estimate how fast you can pay down debt. You can take a snapshot of your instantaneous debt by calling each CC to get current balances, including recent charges. This helps avoid the shock and lack of control of only seeing the bills a month later when your statement arrives. You fool yourself when you see a balance in your checking account only because future bills have not been paid, but you haven't offset it by the charge card bills you have already incurred. You can only control your expenses before you incur them. If you can see your payments significantly reducing your total debt, that reward can substitute for the "reward" of impulse purchasing.
And consider this: 18% interest paid monthly = 1.5%/month 1.015^12 = 1.196 = 19.6% per year At 35% marginal tax rate, you would need to get a pretax annual return on investment of 19.6%/.65 = 30% to do better than investing in paying off 18% credit card debt. There are no 30% annual return investments with no risk.
You have some good advice there. Get a book and write down EVERY PENNY you spend. A pack of gum--write it down. A newspaper from a vending machine--write it down. After a few weeks you'll see where it's going. Then you find ways to limit yourself. Some people have success with the "envelope method." You get a bunch of envelopes, and write on each what it's for. You'll have one for food, one for gas, one for car repairs, etc. Each week or whenever you get paid, you put a pre-determined amount in each one. When the envelope is empty, you can't buy anything else in that category. So if you put in an amount for clothes, when it's gone, no more clothes, etc. You have to pay cash for everything for this to work. No "robbing" one to put in the other. If you build up an excess, you put it in savings. I used to wander the malls or stores and that led to impulse purchases. It sounds like you do the same thing. One thing that cured this was not going to the store. I had some medical problems and couldn't get around. I also had situations at work that made me put in a lot of hours. So by the time I got out, the stores were closed. You could try to get a second job. This serves two purposes. First, it gives you less time to shop. Second, you make yourself sit down every time you get paid from that job and SEND EVERY PENNY TO YOUR CREDITORS. You'll be surprised how fast you'll get bills paid off. Start with paying minimums on everything except the bill with the highest interest rate. Pay everything you can on that, when it's paid off, go to the next one. Search my posts and you'll find several places where I talk about how I paid off $77K in debt.
wow Hedwig - $77k?! i remember you paying off a great deal of debt. and here is sit stressing with $10k unsecured and $11k in auto loans. My sister was a compulsive shopper and she told me she had been suffering from depression but hadn't realized it. She said treating that and shopping at thrift stores/garage sales gave her the "rush" of shopping but at discounted prices.
