Does Your Health Reflect Your Financial Issues?

Before & after. A financial mess.

A reader shared this blog entry with me. It totally resonated with how I came into the realization that I needed to get my finances in order.  I had lost a good amount of weight but still avoiding my bills. I'd just stack them up and ignore.  It was very symbolic because as that stack of bills mounted, so did my debt. The more I ignored my bills the more it felt like I had money to spend.  So I'd go out to restaurants and bars often, and buying things I didn't need because it made me feel good (temporarily).  Keeping up with the Jones' is hard work!

Take a few moments to read this great article. You might see yourself or someone else in the words.

Educate. Empower. Economize.

How I Finally Faced My Weight & Debt Problems

By Leo Babauta

There was a time when I was overweight, but didn’t want to admit it to myself. I didn’t feel in control of my health, because I couldn’t quit smoking or eat healthier for longer than a few days, nor exercise regularly.

Thinking about my weight made me feel horrible, so I didn’t want to even think about it.
Of course, not thinking about it meant I never did anything about it. Not facing my problems made it worse, which just made me feel worse. It was a downward spiral, and really hard to stop.
I had the same downward spiral when I was in debt (at the same time in my life, about 8 years ago). I couldn’t pay all my bills, so I would stuff them in a drawer so I didn’t have to see them. I had creditors calling me but I didn’t answer their calls (I knew their numbers on the caller ID). I didn’t know how much debt I was in because I never wanted to open the envelopes, much less add it all up on paper. I’d borrow money to pay bills, then owe more. And I’d skip paying lots of bills, and accrue interest.

It wasn’t a smart way to manage my finances, but I couldn’t stand the thought of facing all of it. I felt bad even thinking about my finances, so I’d avoid them, and think about other things. Of course, this led to me seeking distraction in food and entertainment and shopping, which led to worse debt.
Not facing my debt made it worse.

How did I overcome all of this? I’ll share it here, in hopes that it will help others facing the same problem — or not facing it.

It’s also important to note that if you know someone in bad health (or bad financial shape), they are probably also in denial. They don’t want to even talk about it. How do you help them? I’ll share that below too.

How I Finally Faced Things

So how do you face a problem, so you can work on it, when you don’t want to face it?
There has to be a point when you say, “This isn’t good. I need to do something about it.”
In truth, there usually isn’t just one point — there are many. It’s a building problem, where you get many data points over time — you see yourself in a picture and don’t like how heavy you look, you get a comment from someone that’s less than flattering, your pants don’t fit anymore, you breathe heavy when you try to run for a couple of minutes.

But then there has to be a point where you decide that enough is enough. You start to feel some resolve. You decide you can do something — it’s not insurmountable.

How exactly I got to that point, I can’t fully remember. But I do know that there were several things that helped me:

• Inspiration: Seeing other people with similar situations who overcame the problem — in blogs and magazines, mainly.
• Do-ability: I didn’t think I could lose all the weight or overcome my huge mountain of debt in a day or a week … but having a small step I could actually do was mentally empowering. If I could do something in a day or two, that was doable. It felt like I could take control again.
• Motivation: When I saw that my health problems were going to be an example for my kids, I knew I had to make a change. When I saw that my financial problems were hurting my family, I knew I had to make a change. In both cases, my motivation for change was bigger than myself — I was doing it to help people I cared about.
• Commitment: When I was inspired by others to make a change, I took an easy step that’s actually a very big step — I made a commitment. Making a commitment is actually very easy — you can tell a friend, a child, a spouse, or the world (via social media or email) that you’re going to make a change. Commit not just to “losing weight” or “getting out of debt” but to something specific: “run 3x a week and cut out sweets” is better. So is “make a list of all my debts, then make a payment to the first one”. Those are first steps … you can always “add more veggies” or “make a meal plan” after you get started. But making a commitment is an easy (if a bit scary) first step that will lock you in to further steps.

I have to admit that it wasn’t as simple as making a decision to change, and then continually making progress with no discouragements. Not at all. I would try to make a change, slip up, feel bad, then start again. And again. And make adjustments each time, learning about myself in the process, and over time getting good at the skill of change.

But the first step — facing the problem — was made possible by inspiration, do-ability, motivation and finally commitment.

How to Get Others to Face Their Problems

I firmly believe that you can’t force anyone to change. You can only inspire them to change, if you’re lucky. That’s not an easy task.

If you have a friend or family member who is struggling with health issues, or financial problems, or something similar where they don’t want to face the problem … it’s tough. They probably don’t want to hear it from you.

However, that’s not to say you should throw your hands up and forget about it. You can still help. Just don’t try to force it.

Here’s what I would suggest:

1. Never attack — empathize. Never tell the person they’re doing something wrong, or imply they’re a bad or undisciplined or lazy person. Assume that they have the best of intentions, that they would change if they could, but they feel bad about it. Assume that you would feel the same if you were in their position — and try to remember a time when you felt that way. Don’t be patronizing, nor “sympathize”. That’s condescending.
2. Inspire. Set an example, and share what’s working for you. Share stories of other people who have overcome problems.
3. Suggest something do-able. And do it with them. If you want them to tackle health issues, suggest the two of you go walking after work every day. Just for 15 minutes (at first). It’s a nice way to socialize and bond, but also get active. This is a small step that can be built upon — later you can walk further, or faster, and maybe add some jogging intervals to the walking after a few weeks or months (health permitting). You can also later do some diet challenges. But the key is to make the steps do-able, easy, and social.
4. Offer to be an accountability buddy. If the other person admits to not being motivated, suggest that they commit to you, and be accountable to you (email you every day or every week to share progress or lack thereof). Suggest that they set a fun consequence (something embarrassing) if they don’t live up to their commitment to you. Or do a challenge, where the two of you are doing something fun at the same time — a pushup challenge, a thousand-steps challenge, an eat-more-vegetables challenge.

Despite your best efforts, this might not work. You can’t force change on someone. They have to want it themselves. And if they don’t, you can’t make them want it. In that case, you’ll have to back off, though showing concern and wanting to help is always something you can do.

Change is possible. Facing problems is totally possible. You just might need a little inspiration to do it.

Original entry can be found here: http://zenhabits.net/ohno/

Questions from a Blog Reader: Money Management Programs

Recently I had a reader ask me some questions related to the money management company that I am using to help me pay down my debt.  It was timely because another reader and friend of mine just told me that she has officially enrolled in the program to pay off her debt.  She is now going to pay off her debt in 4 years as opposed to 33 years!  This is all great news for them.

I asked the reader who asked the questions if I could post them along with my responses.  She agreed and I wanted to share them with my readers. She brought up some great questions that I believe everyone worries about when they're beginning to focus more on their financial health. Hopefully my responses will help others who may be deciding to take steps toward enrolling into a money management company.

How long was the process from the first conversation you had with the company until you committing to being part of the plan they proposed?  Do you pay the application fee and then they work with the creditors, and then they tell you how long it will take and how much the payments will be, etc.?  I guess what I am wondering is, if it doesn't sound like a good option for me, what's the point of no return, or when can I decide yes this sounds good or not?

The process could have started just as soon as I finished the counseling portion of the phone call.  Once you pay the application fee, you have to also pay the first installment which seemed like a lot to pay all at once. My issue was that I was never paying all of my bills on time. I'd skip payments so I was never selling out that much money.   The company will tell you the estimated amount you will pay and an estimate of how long it will take you to pay it off before you pay anything.  Once you pay the first installment it usually takes about a week or so before it hits your creditors.  Just know that the company will have contacted everyone once you paid, to let them know what you're doing because they are negotiating your new interest rates, which are generally lower.  You have to know that you will be told that being in the program, they will close all of those accounts that you give to them.  I kept one card (the one that I had the longest).   Ultimately, I say it's a good option for anyone... the real question is, "are you ready to live without using credit?". haha That's the tough part because so many of us are used to just pulling out a credit card for things.  I primarily live off cash now.  I can't even really say that the one card that I have is for emergencies. It has a $300 limit.  What I have learned is that without depending on credit cards and being more mindful of my budget, I have a lot more money than I had before. I have been putting money in savings and that's something I never did before.

Did you every consider bankruptcy? Or could you do that after doing this consolidation if for some reason you felt that was your best option?

I never considered bankruptcy because most of my debt is student loans (over $90K worth) and those don't go away with bankruptcy.  My hope is that when I eventually sell my house that I will make a good amount to pay a lot of that loan down.  The credit debt is less than $20K and is more like paying a car payment. Luckily I don't have a car payment anymore - plus that debt will be paid off in 2 1/2 more years. That's when I plan to sell my house.

You mentioned maintaining one card with a small limit even while in consolidation.  Do they work that out for you with one of your current card?  Or do you do that yourself?

The company may insist that you put all of your creditors into the program.  I had one card in full on collections so it really didn't matter whether I added them in the program or not. I did get to choose the card I wanted to keep and I choose the $300 limit one because I knew that I could never dig myself into the hole again.  If I really wanted to, I could pay off that balance in just a couple months time with diligence.   You can tell them that you want to keep one but they certainly tell you what the best method is. haha

Did you have any store specific cards?  Were those included in your consolidation?

I put all of my store cards on the program too.  Honestly, store cards are really bad cards to have anyway.  Their interest rates are typically higher and if you have a major card anyhow, you wouldn't need a store card.  That's just me preaching though. hahaha Sorry.  I've gotten so frugal that it's crazy.  I shop clearance racks like a champ! Clearance in the grocery store, clothing store, bakery, Starbucks, you name it.

Lastly, I know on your blog you talked about some expenses due to home ownership like a furnace, etc.  I am thinking in my head...what if while I'm in this consolidation program something bad happens with my car, God forbid, or something along those lines.  Since, you can't open any new lines of credit while you're in it, what would you do in that case?  This sounds so trivial!  Maybe you have savings, but I am trying to play through all the possible scenarios.  I realize this is probably the best thing for me either way, but I want to go in as informed as possible when I call them.

You're right! What do you do? That was one of my worries, too.  You'll be surprised how much money you can save just by looking into your options.  I started saving money as part of this 52 week money challenge I started with friends. You have to save for the "just in case".  That's pretty much the only way.  If my furnace broke down and I didn't have the money - I at least have space heaters or at worst, I could get a kerosene heater.  If the A/C broke down, well, I'd buy fans.  When I needed my furnace worked on, I have some savings so that helped.  Other things that might help is to really investigate what's available to you or what you can do to save money.  Is there a commuter plan at your job?  Maybe carpool?  Do you really need cable?  How about the gym membership? You can find ways to cut your utility bills.  If you have a smart phone, maybe it's time to put it on sabbatical until your bills are paid off (which has been a consideration for me). Cooking your meals at home instead of eating out is another option.  It seems really scary but once you commit to it you really do just find ways to make life work.  

One thing Suze Orman told me to do when I was on her show was to stop bowling in my league each week.  That's one piece of her advice that I didn't take.  I still bowl but I make room for it in my budget and adjust other things.  I keep my meals to $3 - $5 each during the week and that allows me to put some money in savings and to bowl.

It is most certainly a lifestyle change. 

Educate. Empower. Economize.

What Methods Would You Take to Rid Yourself of Student Loan Debt?

Very interesting story.  Could you go to this extreme to pay off debt?  If you have student loans, do
you have a plan (other than making the monthly payments) to pay them off sooner than later? 

Check out this article on a student who lived in a van while he attended Duke University.

Photo: Ken Ilgunas

http://finance.yahoo.com/news/duke-grad-student-secretly-lived-in-a-van-to-escape-loan-debt-194021112.html?page=1