Debt

Financial Fear

I absolutely love being afraid. I love thrill rides, where your heart is racing in anticipation and your stomach clenches as you climb the top of the roller coaster. I love the feeling of panic as you realize that you’re pretty darn high up, and you begin to think that maybe you’ve made a mistake. More than that, I love how you’re held for a few seconds at the very top, just enough time to fully contemplate the fact that you’re more than 100 ft. in the air, in a tiny car, with just a bar and a seat belt to keep you away from your death, before you’re raced down to the bottom at deadly speeds.

I love a great scary movie, where the director leaves most of the “scare” to your imagination, using slow momentum before hitting you with the _______(insert whatever jumps out at you here) and then repeats the process over and over. Side note: if you enjoy thrillers, “It Follows” is an eerie Hitchcockian film you should see.

I absolutely love haunted houses. I haven’t been to one in several years, but during my twenties, my friends and I made a point of going to various haunted houses in our area. I always hoped that stunt people would scare me so badly that I felt the need to fight for my life, or…pee my pants while I run.

Is this all very strange? Yes, maybe to some. I’m not entirely sure why I enjoy being scared. Maybe it’s the feeling that lets me know I’m alive (though I know fully well there are plenty of other ways to get that feeling). I find it fun to experience the gut wrenching, “Why did I get myself into this situation that I can’t get out of?” experience, then walk away safe and sound from said roller coaster, scary movie or haunted house.

I’ve also experienced another type of fear. One that’s insidious and gut wrenching. It leaves you feeling queasy as your stomach ties in knots. It leaves you wondering why you did the things you did to get yourself in your current predicament. It leaves you asking how you’re going to get yourself out of this predicament. It’s on your mind during every free second of your day and keeps you awake at night. It makes you irritable; it makes you gain weight through binge eating and stress; it makes you bury your head in the sand to forget or it makes you panic at every transaction.

This is financial fear. Unlike the aforementioned “fun” fear activities, this is a fear that can literally leave the life as you know it in a precarious state. Never knowing if your card will be declined as you try to buy groceries, or wondering if you can get enough money into your checking account before that check bounces and more fees are tacked on. Trying to figure out if you should pay the rent, buy food or pay your utilities. Having your car break down, knowing you’ll have to put in on a credit card to repair it, not wanting to do that, but understanding that you have to get to work; all while watching yourself be buried deeper and deeper, interest rate by interest rate.

Some aren’t worried that their card will decline at checkout. They make ends meet every single payday. They are able to pay their mortgage, their car note, buy food, and continue to buy the things that enrich their lives.* A good portion of these people are ignorant to the fact that they’re balancing on a razor-sharp edge. One that will push them over with a job loss, one or two missed paychecks, a large car or home repair, or an unexpected medical bill. They may not realize that they are just managing; playing with fire really.

Many people do. Many are well aware that they are one emergency away from having to figure out how to keep a roof over their head. It’s these folks who are experiencing financial fear.

The thing with fear, all fear, is that it elicits two responses; fight or flight. What exactly is fight or flight? It’s how we respond to outside stimuli with the use of epinephrine, norepinephrine and cortisol. These hormones do several things simultaneously to help keep us alive in the face of danger. When we face danger, we feel fear and the body reacts in such a way to give us time (think split second) to decide how best to handle the danger to increase our odds of survival. Circulation increases the blood supply to our brains, limbs and muscles. Our heart rate increases dramatically, our arteries dilate and our blood pressure rises. We breathe faster so our lungs can take in oxygen quickly. Our organs either speed up their processes or slow them down; our liver releases more glucose so we can use it for energy (to take flight) and our stomach stops its digestion process (wasted energy), so you may feel the need to vomit. Muscles tense getting ready to take flight, we sweat more to cool us down quickly and tons of adrenaline is released to help fuel our movements.

Now that you’ve received a mini-biology lesson, how does this relate to financial fear? One either fights or they take flight. I’ve done both. Throughout my early to mid-twenties, I took flight. I chose to ignore my finances even though I knew I was in dire straights. I didn’t see an easy way out (newsflash: there isn’t one), so I buried my head in the sand (which is a form of flight).

When the danger, or “fear,” didn’t leave after I attempted to take flight, I decided to fight. I sat down and tallied up all of my debts, decided to make a budget and create a plan to get out of debt. This was the only way I knew how to fight my fear, this financial fear.

The thing with fear, whether it’s the fun fear you feel at the amusement park, the life-threatening fear our ancestors felt as they tried to avoid getting eaten by a lion, or the financial fear many of us in the modern world feel day-to-day, is that it elicits a very strong chemical reaction in our body. Most fear is temporary, so the residual effects of the fight or flight response or negligible. Except financial fear, it lingers. It lingers as long as your finances are in poor shape, it lingers until you form a plan and execute that plan. It lingers and lingers, and this lingering leaves you in perpetual fight or flight mode. This mode can kill you if you are in it too long.

So yes, I love being afraid; but I only want the type of fear that I can easily walk away from. Who wants to join me in fighting their financial fear?

Do you enjoy the “fun” kind of fear? Have you ever had financial fear? Did you take flight or did you fight?

*Giving up “stuff” helps you realize that enrichment is gained through spending time with loved ones and physical/intellectual/artistic pursuits, rather than the “stuff” you buy.

Tired Of The Chokehold

To be totally honest, I am so sick and tired of paying off debt. It feels like a never-ending journey. It’s quite the phenomenon how quickly you can rack up debt, but how it takes forever to get rid of. No this isn’t a rant (well, it kind of is) about my debt paydown, but more how I conquer debt fatigue. Because folks, it’s very real.

I’ve been in debt for my entire adult life (wow, typing that just made me even more dedicated to getting out of deb). I’ve talked a bit about my dance with debt and how it wreaked havoc on my credit score. I started accruing debt my very first year in college. It started with student loans; innocent enough, right? Well, it quickly included consumer debt; credit cards. And honestly, it was basically a downwards spiral. I’m not naturally a saver, nor am I naturally frugal, so during my spendy years, I was not only totally ignoring my financial situation, but actively contributing to it’s demise…I know, a bit dramatic, but debt talk needs a bit of theatrics.

I did eventual get my head out of my ass out of the sand, but whoa, the damage had most certainly been done. By the time I figured I should start trying to do something about my debt and try to eventually live a life of minimal financial stress, I realized I had ways to go.

I researched different debt payoff methods; not going to get into debt avalanche vs debt snowball here, don’t worry. I opted for the debt avalanche method and am using ReadyforZero to help me. It’s great because I don’t have to put too much thought into it. I figured out how quickly I want out of debt, now (unrealistic); and how much I could put towards it every month; over $1000 which is unfortunately, not enough to get out of debt in less than three years. But, I have a plan in place and I’m sticking to the plan.

But….

I’m tired. Bone tired. Half of the time I wake up and think of all of things I can’t do (since I’m no longer accruing debt and all of my extra money is going towards debt) and I think, “This sucks. I just want to go and have dinner and drinks with my friends and not think about the cost, and I can’t.”

I have created mechanisms to fight this debt fatigue. Yes, I follow a budget (thanks YNAB) and every single penny is accounted for. I’ve budgeted for ” fun” money to combat said debt fatigue, but this fun money isn’t nearly as much as it was. True, my previous “fun” money was funded mostly by credit cards. I sometimes, okay often, feel deprived. When I was in my financial dark ages, I did whatever I wanted, when I wanted. Now, I act like a responsible adult and do activities that are in my budget.

I know a lot of hardcore PF bloggers have tackled their debt by cutting out “fun” money categories completely, but I just can’t. However, I’ve armed myself with several anti-spend weapons to keep my budget in check, continue with my debt payoff plan and still feel like I have a life. Like living in zombie-land, you must be prepared for all situations.

Anti-spend weapon #1: Embrace free activities. Mr. MyCountdown and I are all over every free activity we can find. Okay, so we don’t go to every free activity, but we live close enough to a major metropolitan area that there is always a plethora of things to do that are if not free, than really cheap. Spring through fall are the best. There’s free outdoor concerts everywhere, free festivals, street fairs and the list goes on. There’s literally something to do every weekend. During the colder winter months, if we can’t find a free activity, we make sure it’s pretty cheap or we stay home.

Anti-spend weapon #2: We never ever leave the house hungry. Never. We don’t want to get caught out of the house so hungry that we wind up eating bad fast food or salty, expensive restaurant food and then regret it as soon as we get home. If we plan to go to a festival, free park concert or such and only plan to be gone for about four hours, we eat plentifully at home (and quench our thirst) before leaving, making plans to come back home for the next meal of the day. If we’re gone longer, we bring snacks along for the car ride to hold us over until we get home. In fact, we have non-perishable snacks that live  permanently in the trunk of our car. I always bring my water bottle so I don’t have to purchase a drink while walking around. Okay, criminal activity exposed here: I even sneak my water bottle in my purse so I don’t have to purchase water if bringing outside beverages is a no no. And yes, I’ve been caught plenty of times and been asked to leave my water bottle at the gate, and no that hasn’t stopped me from doing it still (I just refuse to buy a $3-$5 bottle of water because I’m thirsty).

Anti-spend weapon #3: Family and friend activities. Our favorite activity is hosting friends and family and going to others homes as well. We always do it potluck style, that way food and drinks (I always supply an inexpensive bottle of wine to the festivities because, well, wine is always good) are incorporated into our general grocery budget, instead of our “fun” money category, which is extremely limited. We have game night, watch movies and even bust out the home karaoke machine (that’s when the party really gets going). We also enjoy these activities because it allows family and friends with children to join in the festivities.

Anti-spend weapon #4: Inexpensive or free hobbies. Both Mr. MyCountdown and I enjoy spending time outdoors and a great afternoon for us is typically going for a nice run, bike ride or long hike outside (with the Mr. taking pictures), or bringing a blanket with a few books to the park for a read and a nap. On cold, rainy or snowy days, the only thing I’m typically interested in doing is curling up on the couch with one of my cats and whatever novel I’m reading (you can also partake in less PG, but explicitly more fun adult activities with your significant other on these kinds of afternoons too 😉 ) and all the above are totally free.

Anti-spend weapon #5: Continually envision and focus on what my life will look like once I’m out of debt and all of my hard-earned money is mine to keep.

So yes, I have extreme debt fatigue at times. I’m pretty sure many folks in a similar situation do, but this is how I battle the ever-present fatigue.

What anti-spend weapons do you wield to defeat the “spendy” monsters and keep you on track with your financial goals? 

Free Falling

Free falling. This is how bad financial decisions leave you feeling. Completely out of control, knowing you’re plummeting to the ground and when you land, you’ll hit hard and may not survive. So, you close your eyes and wait for it to end, since there’s nothing you can do to stop the free fall. I know that’s how I’ve felt, completely out of control. I’ve felt lost, confused, hopeless and helpless. I’ve wondered why I couldn’t manage to simply control my own actions, why I made the same poor financial decisions over and over again, wondered how I stop the free fall I was in, wondered who around me felt the same.

You feel alone; no one discusses finances. Many behave as if everything is OK, they don’t disclose that they have a car payment that’s too big and more house than they can afford. They don’t tell you how they’re close to maxing out their credit cards while they’re using said credit card to pay for the drinks they’re enjoying out on the town on a typical Friday night. They don’t tell you that they have to use a credit card for groceries, since there’s no money in the bank. They don’t tell you that they’re experts at the credit card juggle; pay the minimum on one and use the other until it’s maxed out. When all of the cards are at their limit, transfer the balances to a new card and start all over again. 

Or, they may disclose that they have NO money, things are dire and they’re close to losing their home; as they stop for Thai food for lunch every Wednesday and pay their gargantuan cell phone bill and of course, cable – gotta keep prime time TV going. They may tell you that they’re in a hopeless situation, so they’ve given up. No, they won’t tell you that getting a second job is off the table because they value their free weekends. 

You feel helpless. You’ve already signed on to take out the huge mortgage that was on the very high end of what you could afford; so now you figure you’re stuck with it. You’ve already maxed out your credit cards, so what the heck, might as well enjoy life. Or, you’ve already received the notice that the bank is starting the foreclosure procedure, so spending a few dollars here and a few dollars there isn’t going to matter at this point.

You feel confused. How did you get here anyway? You got that great promotion with the huge boost in pay. You “ran” all of the numbers and figured you could afford the new house and new car now, I mean, the mortgage payment is about what you were paying when you were renting, just a bit more. True, you didn’t expect to have to repair the furnace so quickly, and you had no extra money saved for repairs, but still. Also, you figured a brand new car would save you from the annual car repairs you had to do on the old “beater” car you used to drive, so you thought you would break even in the end. You didn’t think that the bank would start to foreclose. I mean, they barely nagged you about the late payments, unlike the credit card company and your cable provider; who nagged constantly about overdue payments. You figured, if things were that bad, the bank would be hassling you every day. Since they didn’t, you figured things may work themselves out; you thought you had more time to get things together. 

But the truth is, our finances aren’t to blame for our free fall, are they? We’re to blame. Every single day we have choices, big and small, that determine our trajectory. 

We can live day-to-day with no thought of how we spend our money. We can live solely in the present, and worry about tomorrow another day. We can take on debt without a thought as to whether it’s beneficial to our lives in the long run (like a lucrative school degree, an affordable home or a new business venture) and fail to devise a strategy to pay it off. We can purchase our “dream” home and worry about if we can really afford it later. We can drive off the lot with the car we’ve wanted since childhood because the dealer said we don’t have to put any money towards it now. 

We can make crazy financial decisions and ignore their consequences. Or we can choose differently. We can decide to live well below our means; we can opt to avoid lifestyle inflation, we can choose to pay down our debt quickly or avoid it all together, we can decide early that we’re going to save and invest.

If you made poor financial decisions in the past, you’re not doomed to stay in the free fall until you hit rock bottom. Unlike a true free fall, you can save yourself. You can say enough is enough. You can start to track what you’re spending and cut out unnecessary expenses. You can sell that dream car and go back to a “beater” for a while. You can get your home on the market and downsize to something more affordable. You can get a second job to help bridge the gap. You can make a plan to get out of debt and build a savings cushion.

You may have to make hard choices, but that’s just the thing isn’t it? You have choices. Open your eyes. You can stop the free fall.