How To Escape A Financial House Of Horrors

October 30, 2018

Sometimes our finances become so scary they make us want to close our eyes and wish away all the monetary mayhem. Unfortunately, financial denial only makes things worse. Here are some ideas to help chase away those financial boogeymen for good.

When a financial nightmare becomes reality

I was speaking with an employee the other day who reminded me just how easily we can slip into serious financial trouble when we let a few things slide. In this case, what started out as seemingly good idea to consolidate some student loans a couple of years ago in exchange for a smaller monthly payment was later accompanied by creeping credit card debt, followed by some back taxes owed to the IRS, a short sale on the family home, child support payments slipping into arrears, and basically an ugly financial monster of debt, fees, late payments, low credit scores, and garnishments that became just too horrible to look at anymore.

Rather than face down these monetary monsters and escape the nightmare, the person became defensive and began to ignore the growing financial burden. Although he paid just enough to keep bill collector zombies at bay, he no longer had any idea of the balances owed, how much was being charged in interest, or when (if ever) he might be able to pay off these debts. He had become detached from financial reality, and who could blame him? He was trapped in a financial horror show.

Financial worries haunt us

Money worries in general are fairly common. According to the American Psychological Association’s (APA) annual Stress in America report, over one-third (34%) of adults are haunted by worries over unexpected expenses. One quarter (25%) of Americans feel stressed and tortured by the struggle just to make ends meet for essential expenses. While we cannot escape worrying about money from time to time, how we choose to react to financial stress can either help us or hurt us.

How you deal with it makes a difference

Some people manage stress by exercising, practicing yoga, or meditating. These are great ways to help us feel better and avoid letting stress overwhelm us to the point that we are unable to take action. Others turn to less healthy alternatives: smoking, alcohol or other forms of substance abuse, along with good old fashioned denial. Avoiding things that make us feel uneasy is a common and natural reaction, but not always a healthy one.

Denial doesn’t make the financial ghouls go away

Unfortunately, ignoring the financial boogeymen in our lives will not make the money problems go away and very likely will make them worse. How can you tell if you are only procrastinating versus denying your financial reality? Here are some warning signs:

  • Unopened bills and financial statements are piling up.
  • You consciously avoid thinking or talking about money.
  • You have no idea what your net worth might be.
  • You are afraid to check your credit score.
  • You blindly let your spouse handle all of the finances.

How to get rid of the financial issues that haunt you

Ultimately, financial stress is best resolved by eliminating the source of the stress. It’s time to face down those money demons and “G-Y-F-S-T!” – Get Your Financial Stuff Together. Some other ways to help you exorcise those pesky financial demons include:

  • Find a friend. This could be your spouse, significant other, family member, or someone else you trust. Talking things over can help you put things in perspective and take inventory of what you can do to turn things around. Plenty of professional help is available as well:
  • Create a plan. If you have several money monkeys on your back, don’t try to tackle all of them at the same time. Pick one to focus on for now, preferably the one that makes you most uncomfortable. Among the many things Mark Twain is famous for saying, his advice on eating frogs applies here (do it now, and start with the biggest one).
  • Grab some tools. Anyone who’s watched an episode of The Walking Dead knows not to take on a zombie bare handed. Technology makes it fairly easy these days to get free help with budgets, debt reduction calculators, retirement estimators, credit reports, credit scores, and more. Pencil, paper, and spreadsheets still work too.

Most importantly, keep at it. Once we are willing to shine a bright light on our financial monsters, they don’t look quite so scary and eventually you can make them go away forever.