I’m sure there are more people out there like me who woke up one day and realized that they were fucked. Over 50 and broke, I’d been living month-to-month, for years, had debt and zero retirement savings. When I read about how to invest for retirement, and see those little graphs that show how much you would have saved if you’d started socking money away years ago, I feel completely defeated.
I’m going financially backward, and I’m getting older.
Trying to stretch a paycheck to cover childcare, your kid’s needs, the bills – you really don’t think about what you will be up against when you’re older. I used to have a three-month whiteboard on my kitchen wall. I would faithfully update it with my son’s soccer, football and Taekwondo practices. Fees. Where he was going after school when I was at work. More fees. Three months. That is about as far out as I could manage. I remember having to start saving in February to pay for his summer camps, aka “childcare,” because adults don’t get summers off from work. (Why are we and our kids on different time schedules anyway?)
Then they go to college. I tried to get him through without a student loan. I failed. That last year I cosigned a loan. It’s a huge burden for him now as he applies to law school. We chat online about how high a loan he needs for the various institutions he is interested in as his choices are predicated on tuition fees. We discuss how to come up with all of the application fees without him incurring more debt. I wish I could help him, but I’m tapped out.
Save for retirement?
When you truly become vividly aware of your financial vulnerability, it’s like waking up to a bad dream. Regret. “Wtf were you thinking? That you would never be old?” Everyone has but two choices: get old or die. I certainly didn’t imagine that I would be dead, so how did I fail to imagine that I would be still alive, older … and broke? The fear. The overwhelm. You want to run away from it. To do the exact opposite of what you need to do. I froze for a long time. Deer in headlights. I had no idea where to begin. It took awhile to fully accept where I was. It took me even longer to learn to let go of how I got there. And when I finally started researching, I found out that I wasn’t alone.
The hardest part isn’t starting, it’s getting out of your own way so that you can.
Our Relationship with Money
Money is loaded with emotional baggage. Fear, regret, greed, angst, sensuality, illusion. Behavioural economists have been studying this for years. Apparently, when you are experiencing scarcity of any form – time, money, love – it can affect you cognitively to the extent that you can make poor decisions, decisions that increase scarcity. Scarcity mindset. It decreases your ability to plan while increasing your impulsiveness.
I have friends whose debt is greater than half their home’s value. When they get a windfall, they buy season passes to something. Or a new toy. In that same breath, they might mention how they wished they hadn’t taken that 2nd or 3rd mortgage. “The things we could have done with that money!” These are good people, smart people. Wtf? It seemed to me that when you are used to living month-to-month, you are used to spending all your money every month. And this got me asking some deep questions about my relationship with money. At my age, after all of my mistakes, what parasitic bullshit is still clinging to my ability to handle simple math?
What is money anyway?
Digits in a ledger, with the power to dictate how we spend our waking hours. So, really important digits in a ledger. But the financial world can be intimidating. Take compound interest, for example. That thing that will definitely bleed us out if we’re in debt, or can possibly multiply our money if we’re invested. While the theory itself may be simple to understand, the actual calculation is a far cry from balancing a checkbook. But the more you learn about money, the more you wake up to how crazy debt is. It’s up to me, and only me, to rid myself of any ignorance of something that has such immense control over my life, how I spend my time, where I can go, and what I can do. I know I have baggage around money. But at this stage in the game, I also know that I don’t have time to uber-analyze why. Because the other thing that goes with saving money is time. You need them both. And I’m running out of time.
Reining It In, a Bit at a Time
So, I decided it was time to learn how to crawl out of this mess. And to do this, I had to first stop freaking out about it. My odds of facing this challenge with a recriminating and self-deprecating mindset were low. I tried to treat myself with compassion and forgive myself. I had to start, somewhere. About a year ago I came up with The Grand Plan that had a Mighty Goal. Pay off $18,000 in credit card debt and $2500 in past due health insurance, in 1 ½ years. Right. But it got me started. When you’ve been using your credit cards as a source of income, looking at your credit card statements isn’t fun. It brings up a flood of negative feelings. I tried my best to do it with the cold eye of a surgeon’s scalpel. Void of emotion.
I approach it like a puzzle. Like a game. Something separate from me.
First I looked for any recurring payments that I might have set up and forgotten about. Book club websites, Skype, Amazon Prime, Netflix, memberships… I canceled them all. It felt cleansing. Did I notice? At first, a little bit. Then I stopped using credit cards completely. This took a huge change in mindset. I’d always looked at credit cards as that go-to when something came up.
No longer could I visit my family on holidays. You search for hours to get a good price on a ticket and end up paying in interest what it would have cost you to fly first class. No longer could I buy that new thing, service, trip, because it was on sale. “I had to charge it but it was 20% off!” Five years later, you’ve paid double for the thing that you’d already got rid of two years prior. Crazy!
I paid off the $2500 overdue health insurance within the first few months. Just knocked it out in large chunks and starved. But after being broke for those few months, I hesitated before throwing all of my expendable income at the credit card debt. It seemed to me that if I was really gonna do adulting, it would be wise to save a few months worth of monthly expenses. The idea of throwing all of my salary at debt with nothing to fall back didn’t seem to make any sense. What if shit happened? What would I do? Use the credit cards again? It was an endless cycle.
How I Hacked Peace Of Mind (sort of)
The first rift between my emotions and money occurred when I began to see that money had nothing to do with spending. Spending was something I did. Money is just a tool. And I have some problems right now which only that tool can fix. If I truly want to get out of debt forever, I have to create a platform where going back into debt at the slightest mishap or desire was off the table. I had zero savings. Everything always went somewhere. For some reason, money in the bank made me nervous. Why couldn’t I just leave it alone? Just let it sit there and ignore it?
It was a brilliant idea. I started to ignore the money in my account in the same way I had been ignoring my debt. I started to pretend it just wasn’t there and continued living as if I just didn’t have any to spend. So far I’ve saved a couple months’ worth of monthly expenses. Ten years ago that much money would be vacation fodder. Today, I want to be alright with myself more than I want a couple weeks of hotels and airplanes and souvenirs. A vacation would be lovely. But it would set me back in time. And I’m terrified that I won’t have enough time. Who is going to take care of me when I’m old? If I get sick? The government? Ha!
My biggest fear is that I will die broke and alone in some shit apartment, and no one will know until they smell the body.
Recreating My Relationship With Money
Just recently, I’ve begun to learn a bit about how to make money grow. Not by reading expensive and complicated financial books, but by actually doing it on a tiny scale. Nothing I can’t afford to lose. Like 25-100 bucks a month. It depends on the month. I’ve lost nothing yet. I’m diversified (don’t put all your eggs in one basket). Microbalances. (Tiny amounts.) You can see what it’s doing and learn, without hurting yourself. I started picking up part-time gigs. I stopped buying coffee and other little crap throughout the day. I bought a cheap unlocked smartphone and a budget sim to get out from underneath the exorbitant cell phone contract. I don’t have a TV. I don’t need one. I have the internet.
The internet can open doors for you if you use it.
The internet gives us access to free financial information. I started reading Investopedia, watching Youtube videos, investment for beginners blogs, anything. I discovered that I didn’t need some professional financial person to introduce me to the world of finance and investing and I learned that you don’t have to be rich to invest. Today there are services for people just like me to learn about investing by doing it. I started learning about roboadvisors, fintech sites, cryptocurrency. And then another weird thing happened. I actually became interested. The financial world was no longer a necessary evil, it was fun. Bit by bit the little pieces of financial jargon were no longer as mysterious as Chinese characters. They began to have some context.
As I became aware of my feelings around money, angst, excitement, stress, fear, greed, desire, depression, sensuality, I tried to be mindful of them and acknowledge them without getting involved. I began to challenge my thoughts, get used to the discomfort of these emotions, and just sort of check them out rather than let them dictate my behavior. I’ll be honest, it isn’t very pleasant at first. Perhaps this is why many people pay high fees for brokers to make decisions for them so that they don’t have to get involved. But it’s getting easier. I’m learning. And the more I learn, the more I realize that I’m not alone in the struggle to extricate emotions from money issues.
I found out that even Wall Street and emotions are not mutually exclusive. I laughed out loud when I discovered that you can check the emotions of today’s market on CCN’s Fear and Greed index. Nobel Prize Winner Robert Shiller, professor of economics at Yale, talks about the relationships of the stock market and human emotions. He says that bubbles and crashes involve the human psyche on a mass scale. And it all makes sense. We can separate nothing from our humanness.
Money is a human creation.
Flipping The Script
- We needn’t be ashamed to discover that our emotions around money may have been causing us to make huge long-term financial mistakes. Many of us inherited weird stuff from our parents and our environment around money.
- We shouldn’t be afraid of not knowing enough about the financial world to start learning. Many of us have zero financial education. I remember having a one-off class on balancing a checkbook in Middle School. That’s about it.
- Couple this lack of financial education with the aggressive marketing and consumerism we have been subject to from impressionable ages thereon, and you have an interesting mix of bullshit running malware through your head when it comes to managing money. My senior year in college I received countless pre-approved credit card offers after literally starving to death to work my way through school for years as a single mom. It was like a feast.
Our culture literally screams “spend!” everywhere.
We are programmed to comply on a daily basis. A new phone. A new car. New, new, new. We need the latest iteration of everything. We have a twisted and erroneous idea of a success. It is empty. Short-lived.
We are leveraging our future for the appearance of success.
We get into debt, get out of debt, get into debt, get out of debt. The cycle is insane. And a lot of us have been doing it for a long time.
I’m intent on shattering this financial pathology. A few more months of saving and I will be able to attack those credit card balances so I can stop the bleeding once and for all. I imagine the joy I will feel when they are gone. I know it won’t be easy. And I now know it’s going to take some time. But I can use that time to learn about how to grow the money I will get to keep after I’ve finished. And I can use that time to heal from the twisted mentality that has kept me swimming in this financial toilet bowl for years.
I’m over 50 and broke. I’m at Ground Zero. So fucking what. It’s a mathematical puzzle game. And I’m going to learn how to play it.
The stories are real. Names have been changed. image source: Chris Barbalis
Send us your story if you’ve been duped, on the road to financial recovery, conquered your finances, or want to give feedback. firstname.lastname@example.org