Excuses, Excuses, Excuses
Every time I think I’ve heard it all, someone pops up with a new way to excuse the fact that their money management is in the crapper. Here are some of my favs:
“We got a consolidation loan and paid off our credit cards.” Really, you paid off your debt with other debt? That’s not PAID OFF my little chickadee, that’s delusional. Consolidation makes sense when you then work aggressively to repay the debt. But most people don’t. Nope. Most sit back smugly because they’ve found a less expensive way to go broke. People say this one to me all the time, and like those V8 ads where the person gets a smack on the forehead, I want to reach out and slap them.
Consolidating using a mortgage is one of the more time-honoured ways of making debt more expensive over the long term. Lots of people consolidate using the equity in their homes and then pretend that everything is okay, cos now it’s a mortgage payment. Isn’t a mortgage good debt, Gail? Hey, tell the truth. It’s still consumer credit; it’s just been shuffled to somewhere you don’t have to look at it. And believe me, it’s costing you.
I worked with one couple who re-mortgaged their home three times to cover their overspending. Over the life of their mortgage, they had increased their interest costs from about $150K to almost $600K. Yikes!
“Sure it’s a lot of debt, but, hey, everybody’s in debt, so what’s the big deal.” And if everyone were running screaming of the side of a cliff, you’d do that too, right?
There’s no question that debt has become so pervasive that it seems like everyone’s in it. And if you grew up in a family that had it all, including the debt, you may think this is “normal.” I worked with one couple who were so comfortable with their debt that they had NEVER made a mortgage payment from cash flow. Nope. Every single mortgage payment they had ever made had come from their line of credit. OMG, think of the interest!
So while debt may seem like a normal state of being for you, it’s not normal for someone who is financially healthy. You can make the choice to remain a Money Moron, or you can choose financial stability. The old way may be more fun, at least in the short term, but the new way will keep you and your family safe and sound when the caca hits the fan.
“I don’t have time to budget.” Really, your most important resource and you don’t have the time to manage it? Could it be that your priorities are a little skewed?
According to Time magazine, men spend about 3.5 hours every day watching TV while women spend about 2.75. Hey, you only need to reallocate a measly half-hour twice a week to money management to go from being a financial slug to not.
Close in hand with this goes, “You have to have money to make a budget work.” I got this one recently in a Question from the site. A young lady said that her parents had recommended she use a budget and her response was, “You have to have money to make a budget work, right Gail.” Believe it or not, she was asking ME to tell her a budget was pointless. Really?
Sadly, people don’t think that all that dough they bring in that goes to paying the rent or buying food is “money.” For them, only the stuff they can spend indulging their whims is “money.” And so they don’t make a budget and look for ways to trim. Or perhaps it is because if they made a budget, they would discover just how much money they were blowing every month, and would have to change their behaviour. Lord forbid!
“My partner is the problem.” Okay, I’ve met couples where one person is the major culprit in acquiring debt. The other person stands meekly by as Mr. or Mrs. I-have-to-have-EVERYTHING charges them into a debt whole. They shrug and claim to have no ability to change their partner’s behaviour. Here’s my big question: Is this the way you’re going to live the rest of your life, walking a tightrope, waiting for the axe to fall? And if you have children, do you think this is creating any sense of security for them?”
Of course, for as many couples that I meet where one partner claims the other is the problem, I meet couples where they are both, in their own inimitable way, shopping themselves silly. One husband claimed his wife was the problem because she went shopping every day at work during lunch, bringing home items that she’d hide from him. He saw nothing wrong with dropping $10K on a new motorbike. That’s a lot of skirts, dude?
If you’re still making excuses about why you’re in debt, maybe it’s because you’re not yet committed to getting out of debt. Some people aren’t. They haven’t heard the whistle blow that tells them the train is headed straight for ‘em. Oh well. You can lead a horse to water…