Digging Out

I recently watched a Suze Orman show where the theme was being honest with yourself and others. She had all sorts of guests and callers confessing about being heavily in debt and that they couldn’t afford the façade of wealth they created and their high-class tastes. I began to think maybe Suze’s on to something, perhaps you know someone who lost their job and is really having difficulties making ends meet and may have been living behind a lie of boats, fancy cars, or a $3,000 purse. They never planned for that rainy day and the cloud rumbled over them like an MMA fighter punching for a knockout.

I am a staunch advocate in that it takes time to get into debt and it takes even longer to dig yourself out of it effectively. Think of the folks who bought houses prior to the real estate bubble, they suddenly found themselves swimming in equity and some used it to finance lavish vacations or a shiny motorcycle that scares cats and small kids every time it clamors down the street, now many of them are struggling to keep their homes or may have already fallen victim to foreclosure. It’s this sudden infusion of cash that drives us to make some impulsive and often stupid decisions. A prime example is this article which highlights several million-plus lottery winners whom blew away their winnings faster than a squirrel crossing a country road. How does this happen?

My goal over the next few posts is to look into the psychology behind spending, because once you figure out why you do what you do, you can then try to change bad habits (if you’ve got any) and focus this on positive action for your wallet. Think of it as highly effective habits for your bottom line, I can’t guarantee there will be seven, but you get the idea.