Psychosis on the Road to Financial Freedom

Rock bottom - what is it? Where is it? How do you know how close you are to it so you can finally get around to making some changes. We here all the time about how people have to hit rock bottom before they stop drinking, stop smoking, lose weight, leave an abusive spouse, etc. There are times for some of us when we have to hit rock bottom financially.

You reach out to someone in pain financially. Maybe in the past you even helped them - but they keep doing the same things over and over again. Running up credit cards again, buying a car they can’t afford because they need reliable transportation. The truth is that we really aren’t helping those people by giving them money and bailing them out time after time. Sometimes they have to feel the full pressure of what they have done and the choices they have made - and it can be every bit as painful to watch as it is to be the person suffering.

I have a friend who is 45 years old. She was out of debt five years ago, but then took on a rent payment she couldn’t afford and some other things. Funny thing is that she never went out and used her credit cards for fun. Her debt was much more subtle, and at first, seemed logical and manageable. There were things I saw that she was doing along the way, and I tried to talk to her about her finances, but she would get bitter and angry just at the mere mention of her money. She didn’t want help - at least she didn’t want to learn how to manage her money with a budget. There were two things she wanted: to make more money and for someone to give her some money to get her out of her situation. The job thing always had an excuse, and she lacked the confidence to go out and make more money…someone was always holding her back. And as far as people giving her money, only her mother still does that, and apparently she is beginning to withdraw in that area. too.

Anyway, to sum up the problems I see my friend doing that has contributed to her large debt are:

• she doesn’t have a budget and she doesn’t plan her bills out (a financial plan)
• because she doesn’t have a budget she is always bouncing checks
• because she is always bouncing checks, there are overdraft charges
• because she has a credit card where she banks, the bank was nice enough (that’s a joke!) to link her overdrafts to her credit card: in other words, if she bounces a $25 check, the bank charges her a $7.00 fee. In order to keep her balance from being negative, the checking account charges her credit card an amount to cover the check and the fee ($32), plus they ROUND UP to the nearest $100. So in other words, she now has a $100 charge on her credit card PLUS she now has an extra $68 in her checking account. WooHoo! Time to go to dinner - after all: she deserves it! The thought to at least put part of that $68 back on her credit card never crosses her mind!
• The other thing she does is that when people go to a restaurant with her, she volunteers to put the restaurant’s bill on her credit card and just let the people who were gonna pay cash hand her the money! More debt!

My friend hasn’t hit rock bottom yet, and I will feel sorry for her when she does, because as I sit her looking at what she goes through financially every week and how hard it is for her, I can’t even imagine how much worse rock bottom is gonna be.

This is just one area that we should all examine ourselves in and see if this is something we do. At least if we can recognize it, we can start fixing it.