In 2002, I was living in Seattle, sharing a trendy little cottage with my then partner and was feeling more and more disgusted with my corporate employee life. I lived pay check to pay check – work, workout, dine out, work a little before bed, sleep and repeat. On the weekends, I’d hike, run and enjoy life.
Yet, despite having a good salary, I’d often find myself putting purchases on my credit card. Thankfully every year, my bonus would clear some of it, not all but enough to keep me from feeling anxious.
When we had decided to move to the UK in 2003 I had cleared my debt and was moving with a clean slate. Yet I found that my pattern of debt accumulation had followed me despite getting out of the rat race and starting my own business; I was mortified! My anxiety was rising around my finances and I feared lack. I’d dream that all my clients would sack me and leave me destitute.
We often think when we encounter financial anxiety that it must only be happening to us and that we are the victim of a terrible misunderstanding with the universe around our financial issues. I was so confused. Here I was, someone who was supposed to have their shit together, coaching others to build businesses, helping them in particular with their business planning and financial planning, while in my home court, I was getting more and more in debt. I felt embarrassed and ashamed. Just.like.before.
I found myself living consistently with more month than money. Every month I’d vow to do better money management and every month I’d have to use my credit cards, which were still in US dollars so I had the exchange rate to add into the mix! It went on and on like this for several months.
Like many who struggle with their weight, thinking about it, restarting their diets, etc…I was exactly the same when it came to money!
However, by this time, I’d been reading a lot about personal finances and in particular Robert Kiyosaki’s Rich Dad, Poor Dad series. Along with my newly acquired coaching skills, I set about finding out more about my compulsive spending behaviour. I got curious. I decided no more self sabotaging. I was going to look this beast in the eyes and slay it! I wanted to live on the right side of Kiyosaki’s Cashflow Quadrants.
The quadrant looks like this and I had vowed getting (and staying) out of the rat race :
Getting out your Money Matters
It was now time for me to organize my money matters. I knew that it would be important to view this activity as fact finding. No need to impose judgements. I was already feeling like a failure so the only way in my mind was up.
It was handy for me to view the itemized bank and credit card statements for me to review the transactions I’d been making. I used good old fashioned highlighters and printed statements because that’s how we rolled back in the day! This was nearly 18 years ago and we were only beginning to go online and paperless.
I organized my statements for the past year by institution and by checking account and credit card account in monthly order.
I considered every purchase. Did I remember it? Had it been useful? What category would I put it into?
Finally, surrounded by the cash equivalent of my consumption, I felt a new understanding wash over me. A lot of my spending on paper looked like “necessities”, like groceries. But when I looked at my cash withdrawals as well I thought back and realised that I was spending on business networking, etc…
Going through my past financial transactions with this kind of scrutiny enabled me to come to terms with my spending (and my actual lack of earning) and I made notes about further actions that were required, developing a spending plan that would still honour things I enjoyed.
I lowered my credit limits and I cancelled all but one of my cards. I then used my new found knowledge to begin planning how to increase and use my disposable income for the next 6 months. With the intention of paying back each transaction. With my extra funds, I’d look at my list of old credit card transactions and pick a few and I’d repay them. This meant that I was paying my minimum payments plus extra and acknowledging transactions that had previously been thrown onto the card without consideration.
I started to feel empowered because I had a plan and I understood what had been running my life in the background. I noticed that I had purchased experiences and self development by the thousands! Often underlying this type of spend is a low self esteem but that’s the topic of another post.
