Money Mistakes That Lead to Debt

It’s never too late to find freedom from debt

My husband I were hiding in the bathroom of our home, whispering so that the two salesmen in our kitchen wouldn’t hear us. We had excused ourselves to talk over the possible large purchase.

I had accepted a cold call offering a demonstration of an air purifier. You would think I would have learned from other demos. At least this time, we weren’t going to have to threaten to call the police. (That happened when a vacuum salesman told his trainee that they weren’t going to leave until they had a sale despite our firm refusal to purchase. They finally left at 10:00 p.m. after we threatened to call the police).

My husband was trying to break his thoughts gently to me.

“It is a good machine, but $3000?”

The kicker was that we needed the machine to solve a problem that we were having with excess dust caused by living near a dirt road and an increasing number of animals making their way into the house.

I was sitting on the edge of the bathtub racking my brain over how we could pay for this — there was money in the savings account, or maybe we could sell off some of the livestock.

Then came the hammer that broke the deal for me.

“We can either buy the machine, or we can fly to see the kids,” said Mr G.

We could hear the salesmen talking in the kitchen. They had impressed us with a demo of shaking our little dog’s bed in front of the machine, which sucked up every particle of dust and flying hair incredibly fast.

Machine or travel. Crap!

Had we been making this decision even five years earlier, it would have been a no-brainer — we would have just put it on a credit card.

But now, we were in the beginning stages of our journey to be better stewards of our income. Yes, we both worked hard; yes, part of me was frustrated by the whole scene. But Mr G and I had agreed that we would start doing things differently, and accountability was part of that promise.

Saying no to a door-to-door salesperson makes you feel icky. First, you feel like you are ruining someone’s stream of income. Then you feel like they are there to steal your money. But seeing our son and daughter-in-law won — sorry, dudes.

I walked back to the kitchen with a new determination.

We were going to decide where we spent our money.

We were not going to be talked into parting with our income.

This was not always the case, though. There are multiple times that we have been foolish with our money. Rather than focusing on the mistakes, it is better to look for patterns or habits preventing you from becoming financially free.

You can’t change the past— but you can change poor habits and patterns for a better future!

Patterns that undermine financial freedom:

Not having a spending plan:

Not every debt was because of a high ticket item. It was more often a slow bleed of fifty dollars on the card here, ten or twenty over there. We would mindlessly swipe cards for small amounts, ignoring the fact that those small amounts are added together to make a large amount that is accumulating interest.

In her book, Debt-Proof Living, Mary Hunt says, “the problem is not that we don’t have enough money, [it] is that we don’t know how to manage what we have”.

We see money as a qualifier. It is a downpayment on what we want. It is the lever we use to lift ourselves to economic privileges that we have not earned. — Mary Hunt

Hunt claims that money is to be managed first, then spent. Other sources support the same system:

Managing your money well is all about careful planning. It’s easy to let your spending get out of control if you don’t know exactly how much of your money is ‘disposable income’. — Cabot Finacial

When you make a budget, you decide ahead of time where you first need to spend your money, then where you get to spend your money.

Not being on the same page as your spouse or partner:

Often one person in a relationship is better at tracking the finances. Too often, the other person then ignores the income/expenditures completely. For the first twenty years of our marriage, I unfairly placed that burden on Mr G’s shoulders. One day, I heard a story about a lady whose husband had died and had no idea where she stood financially. It scared me into wanting to learn more.

In a sobering divorce stats report, there are two ways lack of financial coherence contributes to divorce rates:

—Feeling that one’s spouse spent money foolishly increased the likelihood of divorce by 45% for both men and women.

— Couples that argue about finances at least once a week are 30% more likely to get divorced.

Wilkinson&Finkbeiner

Thankfully, there are steps that couples can take to either prevent or repair the damage done to their relationship because of money fights.

If you’re committed to a relationship, you and your partner owe each other a calm, honest conversation about each other’s finances, habits, goals, and anxieties.

Investopedia

My husband and I didn’t start to win with money until I became fully engaged in our finances. There is power when two people share a common goal.

Not dealing with the issues around why you overspend:

I was trapped in a cycle of guilt. I would feel guilty for not making enough income, ignoring the finances, spending money, and feeling guilty about the purchases. When we were strapped, the guilt would be compounded by selling the items for less than what we paid and the fact that needed items were now gone.

According to an article titled “5 Ways to Control Emotional Spending”, my responses were normal:

Emotional spending occurs when you buy something you don’t need and, in some cases, don’t really want, as a result of feeling stressed out, bored, underappreciated, incompetent, unhappy or any number of other emotions.

If you believe that there are deep-seated issues around your spending patterns, I recommend talking to a counsellor or mental health therapist. Unfortunately, this topic is way too comprehensive to cover in a few paragraphs.

A lack of inner control is one consequence popel experience as the result of difficulties that have had in days gone by.

— Les Carter, Putting the Past Behind

It wasn’t until I received counselling and started healing from my extremely toxic childhood that I recognised this pattern and was able to stop the guilt cycle.

Not celebrating the small victories:

Just like how we max out credit cards a few dollars at a time, we can make progress a few decisions at a time. Making one right decision at a time towards a better future adds up.

Too often people overestimate the significance of one big defining moment and underestimate the value of making good decisions and tiny steps of progress on a daily basis. Marc and Angel

For me, no longer watching ads helped. I chose to shut out the outside voices designed to cause me to covet things that didn’t even have a place in my life.

What we need is the courage to think for ourselves, the maturity to tailor our lifestyles to fit our incomes, and the willingness to find contentment where we are and with what we have. — Mary Hunt

Something happens when you become intentional about changing your circumstances. It’s like the way a small snowball becomes a large one when you roll it across the backyard. As you push, everything sticks to it, and it grows and grows. To make a huge snowball, though, you have to keep pushing even though it’s hard work.

Not believing that life can be different:

When Mr G and I started our debt-free journey, a mountain was looming in front of us. The debt overshadowed everything we did; it felt absolutely insurmountable. We wanted desperately to get rid of it as fast as we could, but our incomes didn’t match our goals. This went on for two years, then one day, we realized that we needed a bigger shovel if we were going to dig ourselves out of this hole. This meant that we were going to have to move to a new city to get that.

It was rough leaving the area that we called home for over twenty years. We feared that we would move and still be in the same situation.

That was far from the truth, though.

The moment we said yes to moving, it was as though something broke free.

  • Mr G’s new position went from part-time to full-time.
  • He was placed higher on the pay scale than he had anticipated.
  • An affordable townhouse came available for rent when we needed to vacate our previous home.
  • For the first time in our lives, we have money in our savings account.

Here’s the bottom line:

It is never too late to be financially free by changing bad habits or resetting patterns. You cannot let the fear of repeating mistakes stop you from working toward your best possible future.

“Your failures are not final.”

Dave Ramsey

It will take grit, determination, and intentionality, but good things start to flow into our lives when we start making decisions in the right direction.

Unexpected opportunities start to appear, places that are stuck start to flow, benefits start to move in our favour.

It’s the same way with your finances.

The first time you sit down to do a budget, it’s painful. Determination gets clouded by doubt and guilt. You won’t get it right for at least the first three to six months either because things that you didn’t think of always pop up.

You will be tested too. Ever have a toddler empty the shampoo that you’ve been meticulously rationing into the toilet? How about having a new tire blow out or a transmission quit?

But you persist. You do not give up.

And then…

One day, you get that first debt paid, and something surreal happens. It’s like you can feel the burden of it being lifted off your shoulders; you can hear another chain link being cut off, and your mind’s eye can see it fall to the ground.

One more thing that was holding you back is now gone forever! Oh, how wonderful it feels!!!!

Originally published at https://lifeinwritingca.wpcomstaging.com on April 6, 2021.

Writing about life lessons learned from nature, adventures, and mistakes. https://lifeinwritingca.wordpress.com

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store