10 Lies That Keep You In Debt - Part 2

So, the list of the lies that keep you in debt continues. Whether you’re just beginning on your journey toward financial freedom or you’ve declared yourself a certified personal finance sage, I’d almost guarantee you’ve had to say at least one of these to yourself at some point. . . . Well, I know I have!

As a reminder, here is a review of Part 1:

1. I deserve it.

2. But, this is an emergency. . . isn’t it?

3. It was on sale.

4. A couple bucks won’t hurt.

5. If I made more money, this would be easier.

6. I’ll start next month.

I love when people tell me they are going to start paying down debt in the New Year or after this event or that time passes. Here’s the problem: Something important or necessary will always be going on! So, what are you really waiting for? It’s easy to talk about change, but when will you take action and just start already? If you don’t start today, years may go by and next month will never come.

7. I don’t make enough.

One of the lines I hear most often is, “I can’t afford to save, pay down debt, blah, blah, blah.” The line I typically offer back is, “You can’t afford NOT to save!” The very folks who believe they can’t save, somehow manage to give the bank $34 per overdraft fee each month or $29 for late credit card payments. I’d venture to say, if you can pay the bank money every month involuntarily, there should be a way to squeeze out a few bucks to give the bank voluntarily. I don’t care if you start putting an extra $10 towards paying off your debt, you have to start somewhere and you have to start TODAY!

Related Post: 10 Lies That Keep You In Debt - Part 1

10 Lies That Keep You In Debt - Part 1

We all have those lies, large and small, we tell ourselves to justify why we do the things that we do. The reality is, however, that every single decision we make is either helping us or hurting us. There really isn’t much gray area there. Whether we choose to acknowledge it or not now, really doesn’t matter. Our long-term financial standing will inevitably show us what we found important during our short-term decision making.

Take a look at the list and see if you can relate to any of the lies below.

1. I deserve it.

Do you work hard? . . . Of course you do. Do you deserve to indulge every once in awhile?. . . Eh, maybe.  The question is, however, whether a new dress is really worth you staying in debt? Sometimes you may need to ask yourself, “As much as I deserve _________, don’t I deserve to be debt free even more?” If you answer, "No. I deserve to work my entire adult life and still end up with nothing at the age of retirement," then continue on. Buy all the dresses you want! Remember, its not the one "I deserve it." conversation that does it either; Its the constant conversation you begin to justify on an ongoing basis that hurts you. 

2. But, this is an emergency. . . isn’t it?

So, let’s get clear about what emergencies are. Merriam-Webster defines the term emergency as “A serious, unexpected, and often dangerous situation requiring immediate action.” With that being said, dipping into your emergency (or, opportunity) fund for items that you were fully aware were coming up is NOT an emergency. It’s important to make every expense a line item on your budget, even those things that are quarterly or annual expenditures such as car registration or dues.

Related Post: How to Create Wealthy Habits - Part 1

3. It was on sale.

Oh, yea! We’ve all fallen for this one at one time or another. The reality is most people are in debt because of STUFF. It’s impossible to get out of debt if you are committed to buying more and more stuff instead of truly being financially free. 

One way to avoid this trap is to stop walking around the mall and “window shopping” or “surfing” on line. I would also suggest unsubscribing to all of the tempting emails with the “great deals” in your e-mail box each morning. Instead of convincing yourself that you’re saving, begin to ask yourself, “Do I really need this?” Remember that buying something you don’t need is never better than saving money for your actual needs.

Financial Book Review: The Frugalista Files

“I don’t leave my low-paying, dead-end job, because I need money to pay down my rent, car, and school loans, and to bring down my credit card bills.”

Sound familiar? 

If so, you’re not alone. And that was the great part about reading Natalie P. McNeal’s The Frugalista Files: How One Woman got Out of Debt without Giving Up the Fabulous Life. Knowing you’re not alone in getting a possibly long-neglected financial house in order is one of the most important steps in beginning your journey to financial freedom.

As a sister in the “fab while frugal” struggle, I adored Natalie’s transparency.  She shares more than just her passage from being a pauper to becoming the poster child for personal finance success, but includes candid insight on her professional transformation, personal obligations to family and friends and the real life challenges that take place in a single woman’s life, all while juggling being a staggering five figures in debt.  The way Natalie utilizes metaphors to explain her money woes are both hilarious and relatable. “My student loan is like an old boyfriend who just won’t go away. We had a good run, but it’s time for the relationship to end.”

If you’re a blog rat (no shame in that, I am too), you’ll love the fun and carefree tone of the book. Unlike most money books you’ll find in the “self-help” section, Frugalista Files won’t bore you into a sound slumber or present concepts that are so complex you have to phone a friend. As a blogger myself, I found the tone of the book to be uber friendly and non-condemning. Reading the diary entries allowed me to connect with Natalie in a different way than the Suze Ormans of the world. (Sidenote: I do love Suze. In fact, Suze, if you’re reading, you’re the only white woman I’ve ever wanted to be like.) Ahem. I digress.

Discipline over deprivation is Natalie’s reoccurring theme. She doesn’t preach complete abstinence from spending because really, who the hell would listen anyway?  Rather, she strives to maintain a somewhat fashionable lifestyle by incorporating the idea of “ballin’ on a budget” . . . yes, similar to what the group, Nappy Roots sung about circa 2002. For example, she attended social events, but decided which ones she would go to based on parking rates and the other “hidden fees” of being a social butterfly.  She limited herself to one drink to save money and to prevent alcohol-induced munchies . . . otherwise known as food binges. She began styling her own hair and giving herself mani/pedis, while only visiting a salon on a truly as needed basis. And at the end of it all, the moral of the story is: moderation is key. Frugalista Files shows us how much small changes can make enormous impact by highlighting her decreasing debt balance at the end of each month, or chapter.

Black In America: Are You Delusional Too?

For the last few days, the topic of discussion almost everywhere has been centered around CNN and Soledad O'Brien's Black in America Special: Almighty Debt.  From debates in beauty salons and barbershops to seemingly angry tweets and Facebook status updates, the discussion about the role faith plays in the finances of African Americans has become multi-dimensional.

While many have taken the stance that prosperity preaching pastors may be to blame, others have questioned both the irresponsibility of some of the families profiled on the special, as well as the advice provided to them.  

With valid points on all sides of the argument,  there is one reality that continues to be glossed over:  many people are just plain delusional about their debt.  At the root of the issue, no matter what side you've chosen, the bottom line is that at some point there is a disconnect with reality when it comes to financial matters for many people, Black or otherwise.   If you're not careful, you may fall into this delusional state too!

5 Signs You're Delusional About Your Debt

1. You don't know how much debt you really have.    The worst thing you can say if someone asks you how much debt you have is, "Uhhmmm, about . . . . "  Numbers are very black and white. They are what they are. Either you know it or you don't.  How will you ever get out of debt if you don't even know who you owe and what you owe them? 

2. You won't open the mail or answer the phone anymore.  Believe it or not, dodging creditors doesn't make your debt magically disappear.  Avoiding your financial blunders can only snowball the problem.  What could have been a simple flurry can become a blizzard if you're not upfront about the mess you've created. 

3. You use the church as an excuse to be stupid. Harsh, right? I know. But if I hear one more person who continuously lives beyond their means say, "I tithe, so God will provide," I don't know what I'll do! Tithing is not an excuse for poor money management.  Don't pick and choose the parts of the Bible you like for convenience. There are hundreds, if not thousands of verses which relate to money and none of them involve tithing being a valid rationale for over spending and under saving.  Not to mention, how can you be the giver you are called to be if you're riddled with debt and barely making it yourself?