Seeing What You Want to See
Most of the people I work with believe that credit cards, debt, and living in overdraft are the norm. Why? For some it’s because they don’t want to have to change what they are doing. They enjoy buying stuff and having anything they want whenever they want it. The immediate pleasure offsets the future pain. Of course, at some point, the pain surpasses the pleasure, which is when they call me.
Sometimes people keep on the same track because they simply can’t see the mess they are making. They only see what they want to see. The people around them who love them are panicking, but they’re blithely continuing to consume on credit.
I get a lot of letters from sisters, brothers, husbands, wives, mothers, fathers, even children, asking how to help their loved ones wake up and smell the coffee. It’s a tough call. You see how hard I sometimes have to be with people. That’s because they need a real kick in the pants to see what I see, instead of what they want to see. But I don’t have to sustain an on-going relationship with my couples so I am risking nothing; you, on the other hand, have real relationships that could be damaged if you kick too hard.
The other day I found the following and it made me stop and think:
Aoccdrnig to rscheearch at Cmabrigde Uinervtisy, it deosn’t mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit a porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.
If, like me, you had no problem reading that paragraph, it’s because your brain only requires the first and last letter of a word to be in the right place to recognize the word correctly. Pretty cool, eh?
We’re wired to fill in the gaps. This helps us read gobbledygook, but it also helps us to justify our actions no matter how stupid they may be. We see what we want to see, looking at a Complete Mess and seeing Normal.
Just as our brain views the paragraph above as normal, we see a life of debt, living on credit, and skipping payments as acceptable as okay, because… (fill in the blank with any lame excuse.)
Often I hear from people that it doesn’t seem all that odd to live on credit because everyone around them is doing it. Really? So, to quote my mom, if everyone around you were playing in traffic, you’d be out there too?
Instead of hanging out with others like you to justify the actions that will eventually bring you to your knees, take a look at those that are different to see what they are they doing. How are they managing to live on what they make? How do they say no to the impulse purchases? How do they save?
I love this definition of INSANITY: Doing the same thing over and over again and expecting a different result.
If you want to get out of debt, continuing to use your credit cards isn’t going to get you there. Transferring balances from one form of credit to another isn’t going to either. And spending more than you earn isn’t going to get you there. There is no magical moment where you’ll wake up and all the debt will be gone.
If you’re looking at your friends, families, neighbours and wondering where they get all the money to go on exotic holidays, drive a new car every two years or buy beautiful clothes, it may be that they earn more than you do. Or they may be doing it on credit. Regardless, if you don’t want to be in debt, you have to stop seeing what you want to see and See the Truth.
Truth #1: Money is an exhaustible resource. When you spend it, it’s gone. So spend it wisely.
Truth #2: Credit is NOT disposable income. If you can’t pay for it in cash today, how will you pay for it on credit, with INTEREST tomorrow?
Truth #3: Spending more money than you have is STUPID!
Truth #4: If you don’t have enough money, you have two choice: Slash your Spending OR Make More Money.
Truth #5: If you don’t Save, you will have Nothing when you most need MONEY.
Truth #6: If you don’t Plan, you’ll get nowhere.
Truth #7: You are the person in charge. You have the power to create the life you want. Stop whining and DO IT!
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Tags: credit, financial insanity, stupidity
September 16th, 2008 at 8:31 am
My “wake up and smell the coffee” moment came about 11 years ago when I was pregnant with my daughter. We had been in a car accident shortly before I got pregnant and so ex-husband (as he is now) caouldn’t work. we were living in a run-down trailer with a room-mate we bearly knew going further and further into debt. I will never forget being 6 months pregnant and very sick and having to deal with creditors calling. One lady creditor took a “financial statement” and couldn’t believe that we were in so much debt and didn’t have a credit card. I was also writing myself cheques between 2 different accounts for $10-$20 just to cover costs. When i finally met with the bank they were very helpful and that was when my eyes opened to the fact that I didn’t need to live that way. It took a year or two yo get out of the mess we had created (by show standards the debt was tiny but compared to our income was huge). I no longer have cheques. Instead I pay by money order and have an account that gives me 5 “free” per month, or I pay bills online. When I bought my daughter new bed I didn’t quaify for any credit but it was a blessing in disguise because I only had to pay for the shipping and delivery until the bed arrived at the store, and even then I could pay off per month until the bed was delivered when the full amount was due. It worked out better that getting credit!
I never ever want to have to deal with creditors calling again. I do now have a credit card but I got that so I can buy airline tickets and usually the money is “on the card” before I even make the purchase (the company doesn’t like it too much).
I also know it is better to deal with the bank etc. and be open and upfront with them. They helped out a HUGE deal and came up solutions to help us to stop defaulting.
All I need to work on now is getting the savings up more!
September 16th, 2008 at 9:05 am
Hurrah Gail! Love that you are bold enough to stand up and tell the truth in plain language - as opposed to all the shadowy financial offers we recieve almost daily! Thank you!
Our wakeup call was when we saw you on your show, adding up all the total interest a couple was going to pay if they just continued with minimum payments until everything was paid off. We then sat down and figured out ours - it shocked us into immediate action. Why on earth would we give away that much of our money - for no reason?! (we get nothing, zip, nada, zero in return for forking over our money for interest)
September 16th, 2008 at 9:36 am
Your post makes me think of a conversation my cousin, a stay at home mom, who’s husband makes waaaay more than my husband and I put together. She was telling me that some her husband’s colleagues seemed to be doing much better financially than her family, (i.e., bigger houses, fancier cars, more pricey vacations, more nannies/housekeepers etc.) to which her financial advisor responded “some people are just much more comfortable with debt”.
I always think of that comment when the sneaky comparisons to others begin in my brain… I don’t want to keep up with the Joneses (who are blithely living in debt like you’re describing), I want to continue to be uncomfortable with debt and live a less stressful life-something I consider priceless!
September 16th, 2008 at 10:32 am
I find that simply talking about debt makes it easier to handle. I found Gail’s site, and TDDUP after the process had already started, but it gave me the boot in the rear I needed to keep on track.
When I told my friends and family that I was in a bit of a mess they looked at me as if I was nuts for even saying anything. However, after time they started to let bits of info of their situation drop. Now I have a family member with whom we are both committed to getting out of debt. We praise each other when we hit a milestone, like a debt paid off, and help bring each other back from temptation. It has really helped.
September 16th, 2008 at 12:12 pm
I always like this saying…
“If you fail to plan then plan to fail”
September 16th, 2008 at 12:29 pm
Here is an idea for a neat calculator for a website devoted to get people to wake up and get out of debt:
- put in the amount you owe on your credit card / line of credit / …
- put in the amount of the interest rate
- put in the amount of the payment you currently make
- press calculate!
The output should show the amount of the time it will take to pay the debt, the amount payed in interest, the total payed!
I saw this for mortgages (25 years versus 40!) and it might be useful in waking up loved ones. I don’t know if the regular mortgage calculators would work for this.
September 16th, 2008 at 1:03 pm
The bank statement says it very susinctly! If at the bottom, you have more withdrawls for the month than deposits, then there is likely a problem. Seeing that should make you look more carefully at: first, the statement to see if it is accurate and second, your spending to see how you could let it happen! Credit cards add to the mess, so that needs to be factored in too! PLUS INTEREST.
On the same topic: I just watched the American movie “Maxed Out” . It was alarming (as it was intended to be) how easy it is to get into trouble. I was most surprised though how long the habit of buy-now-pay-later has been going on! It’s not a recent phenomenom at all. The best part of the movie was the bonus features on the DVD. A fellow was on there talking about HOW to get out of the mess… and of course his formula was almost identical to Gail’s (because it works!).
My stress regarding my mom and my sister’s spending eats at me everyday. I am not sure if they are in a cycle of denial, or have simply formed bad habits, or maybe the pleasure of the purchase is almost an addiction — I don’t know, but I do know that on my family’s relatively low income, I have a more secure base of savings and WAY less debt to keep me up at night (just the house and only 8 years to go on that). Do I feel superior? HELL YA!!!!! I may not have the same quality or amount of toys that they do, but my simple life is pretty darned happy as a work at home mom.
September 16th, 2008 at 1:35 pm
To Tracy - Your mom and sister CHOOSE to be in debt - why are you allowing it to eat away at you? They’ve made their bed, they can sleep in it, I say. You can feel for them, but if they ignore your well-intentioned advice, let them be - you’ve done your best to help them. Here’s a past post of yours to keep YOU on track:
“THANK YOU! All of what you have said is great. I am her only other sibling, and there is no spiritual support, but I will see if I can gently probe other family and friends that care to carefully form a strategy on how to breach the subject with love and offer emotional support and maybe even some tips from TDDUP!
About whether THEY think there is a problem…. it’s a touchy thing. Sometimes I am stuck hearing them complain about each other’s spending, and the racked-up debt. Near tears, or in angry tones they confide how upset they are at the irrisponsible spending of the other. Then the next day they are happily bragging about how they want to build a new home! So they SOMETIMES seem aware of the problem and stress about it, but most of the time they happily play and shop to their heart’s content “knowing” it will all be covered by job bonuses, raises and other future financial influxes….
Excuses I have heard: “We can always consolidate again, we can always get a home-equity loan, we can always cut back on spending whenever we want, why worry about emergencies when we have a visa?”
…. so we have talked about it.
I will proceed with caution, and meanwhile put the timer on their big screen TV with digital TV receiver for TDDUP (the new time of course!)”
September 16th, 2008 at 4:24 pm
Thanks for telling it like it is, Gail! WE LOVE YOU: )!
September 16th, 2008 at 6:23 pm
@ Mary - it’s easy to say that Tracy’s mom chooses to be in debt. However, when things fall apart, who’s going to pick up the pieces?
My mom has this sense of entitlement that I should provide her some sort of monthly allowance. She believes that I should do that because now I’m an adult and has an income, and she’s my mom! But my dad is still working full-time and my parents are not starving! Weekly, I hear her going to shop for things just because they are “cheap”. I refuse to fund her shopping that way.
Now… my mom and dad haven’t set up financial power of attonery and they have no wills. What if something happens to my Dad? I have a feeling that they haven’t saved enough for retirement. Mom has been a housewife since I was born so I would not expect her to find a job that could actually support her. In fact, she leaves all the family investment decision to my dad, so she’s clueless on how much the family has saved over the years. I have a feeling that I’m expected to pick up the pieces should anything happens to my dad. So, you bet that I’m worried!
@ Gail - your blog has been an eye opener for me. It’s nice to see that the money in my bank account increase.
September 16th, 2008 at 10:14 pm
Ah, i love the down to earth, TRUTH to your posts!!
It is what it is - no candy coating here ladies and gents! I love it!
September 16th, 2008 at 10:40 pm
The pain of discipline is better than the pain of regret.
BTW, a new series of TDDUP has just begun broadcasting here and last night was the “Till Dogs Do Us Part” episode with a couple who only saw what they wanted to see and were completely blind to the Truth. A great lesson for the viewers but Gail… $3000?
September 17th, 2008 at 1:13 am
Mary, I’m in a similar position with my parents. I’d be shocked if they had ANYTHING saved for retirement. Regardless, I won’t let my own parents live on the street, no matter what their financial sins are, so their $$$ issues are my $$$ issues in the long run. One thing I know for sure is that when I have kids I will not put them in such a stressful and unfair position.
September 17th, 2008 at 8:46 am
Mary, have you considered having a private talk with your father? It might be hard to do, but it sounds like he needs to hear how you feel. If ANYTHING they should have a will drawn up & POA. I bet you’d feel a lot better if he knew how uncomfortable you feel.
September 17th, 2008 at 12:06 pm
Hi All,
Whoa, can I relate to this mess!!! Here’s my story in a nutshell: I have young kids and am choosing to stay home part-time so I don’t pay someone else to raise them. I live in a border town and work in the US so my cheque has been shrinking for three years. We took a line of credit to help finance reno’s on our home–to be fair to me, they were much-needed updates on on old house, and we had a roof leak that forced us into the situation five years before we wanted to be. Now, the decreased income combined with the increased debt and the rising cost of EVERYTHING means our disposable income is next to nothing. This means NO EXTRA CASH for savings or toys until next year, when my little guy goes to school and we gain a full time income from me plus drop daycare payments.
We told ourselves we could keep our heads down for two years and tough it out, but as I had to say “NO” to more and more things, my hub got more and more annoyed. End result??? We have split up–and now we spend money we don’t really have on a second place for him to live. My savings and RRSP’s are essentially nothing more than a sock drawer envelope that one car repair will wipe out in a second.
I do take responsibility for my actions: I know now that we borrowed too much at the wrong time and now this financial crunch has turned my life into a train wreck.
I am lucky to have two gorgeous children and an excellent group of friends, so I know I will get through this. But it would be a hell of alot easier if we weren’t over-mortgaged for the market (we owe 40 grand more than we could get for the house now–a 60 grand drop in value in two years), or if we had better savings. We kept telling ourselves that we would begin to save when the kids were finally in school–a fallacy, I know.
So, let my situation be a lesson to everyone!!!!! SAVE MONEY!!! Don’t let a BANK tell you what kind of debt you can handle!
…and beware of the lesser known banks out there offering a “personal line of credit”…which has an interest rate of 28%, no better than a store credit card!! The sharks smell blood, and they are beginning to circle!