HELP. Compulsive spender in major debt.

[aeindebt]

Reg here – about to lay it all on the line. And it is incredibly embarrassing, hence the AE. Here is my debt, bills and income. I really need help. (Warning, this is very long)

$10,000 – Personal Loan
$9,237 – Credit Card Debt
$42,184 – Student Loans
$15,149 – Car Loan w/ 2 1/2 years left (2nd car is paid off)
Total Debt: $76,570.00
CC & Personal Loan Debt (so removing car & student loans): $19,237

Set Bills:
Rent: $1750
Cells: $160
Car Insurance: $151
Cable/Internet: $220
Electric: $120
Gas: $15
Trash: $14
Car: $400
Water: $30
Gym: $49.99
Charity: $60
Netflix: $7.99
Credit Card Payments (min): $577.70
Personal Loan: $1,020 (what I am currently paying to get it paid off faster, not minimum due. That is about $450.00)

I do have a 401k with $20,000.00 in it and about $4000 in an ESPP. No other savings. VHCOL Area.

No kids. 1 dog, 3 cats.

Gross income last year was $152,000.00

Bills are 100% ALWAYS paid. That is not an issue. I pay them first thing the second we get paid, and have never been more than a day late on rent, and that was just because I was an idiot and forgot.

The majority of my pay is in the form of commission and varies from month to month, which has made it tough to budget, and I have just given up. I realize it is a total excuse. I am a compulsive spender though – no matter how much I tell myself I am going to get back on track, I NEVER do. I am a compulsive person with food too, but in every other aspect of my life I am a stress case and over conscientious about everything. I just have no self-control with money or food, and it has been that way for as long as I can remember. Funny too, since I grew up relatively poor and have been working since I was 15. So it is not like I was overly spoiled and therefore never learned the value of a dollar. I am a very hard worker.

Just as an example: This weekend I said I was not going to spend any money. Instead, I bought a $200 purse, new shoes, new jacket ($100), spent $36 on Amazon, $150 on groceries (most of which we never eat, see the food compulsiveness above), went to the movies and went to lunch w/drinks ($100). It was totally fun. And that release, the fun, I am going to stick my head in the sand and not stress about money lalalalala is what gets me into trouble. Dropping $50 here and there doesn’t even make me blink, which is another problem. I don’t see the big picture – just what I am purchasing at that moment.

Before anyone suggests it, I am in therapy, and have been for about 8 months. It started because I needed help with my eating disorder, but as a result I have realized that there are other parts of my life that I need help with as well. People that know me IRL would NEVER have a clue that I live like this. I appear to have it all together and am educated, smart and very successful in my career. I don’t drive a flashy car or have a flashy house – really, I have nothing to show for all the money I have blown. I don’t even know where most of it goes.

I desperately want to have kids and buy a house, but to anyone with more than 1 brain cell it is obvious that I need to fix this first. I am also desperate for security, which is impossible living paycheck to paycheck (when I obviously shouldn't have to be). So, I am asking for help. What resources would you start with first? Book recs? Help budgeting with a fluctuating income? Success stories of people in a similar situation?

[SJ]

You said "we" several times. Are you married? Do you combine finances? How much does your SO make? How much does your income range? (ie what is the lowest monthly take home and the highest monthly take home?)

[Daria Morgandorffer]

I'm not much help as I'm also very compulsive and have been working on it. My biggest issue is buy food as well, I'm terrrrrrrrrrrrible at the grocery store.

I'm just going to sit here and eavesdrop

[Deleted]

You seem like a good candidate to switch to a cash-only envelope system. Delete all the stored CC #'s from places you online shop. Put up some barriers between yourself and the compulsion.

[Deleted]

Aug 27, 2012 15:41:56 GMT -5 aeindebt said:

Just as an example: This weekend I said I was not going to spend any money. Instead, I bought a $200 purse, new shoes, new jacket ($100), spent $36 on Amazon, $150 on groceries (most of which we never eat, see the food compulsiveness above), went to the movies and went to lunch w/drinks ($100). It was totally fun. And that release, the fun, I am going to stick my head in the sand and not stress about money lalalalala is what gets me into trouble. Dropping $50 here and there doesn’t even make me blink, which is another problem. I don’t see the big picture – just what I am purchasing at that moment.

Ok, deep breath. Return the purse and the jacket. Tear up your credit cards. No amount of budgeting will help if you can't control your impulse spending.

[aeindebt]

Aug 27, 2012 15:45:55 GMT -5 SJ said:

You said "we" several times. Are you married? Do you combine finances? How much does your SO make? How much does your income range? (ie what is the lowest monthly take home and the highest monthly take home?)

Yes, married. 152,000 is our combined income, although I am the primary breadwinner. ALl finances are combined.

Take home, the range will go from $4800 (on VERY rare months), to 9000+ on very good months. This is after taxes, 401K, ESPP and health insurance.

[anna7602]

I'm glad you're in therapy.

As far as the stuff-buying goes, can you return any of it- the $200 purse for example? Is part of the thrill you get the actual purchase and not the use of said purchase?

[aeindebt]

Aug 27, 2012 15:51:05 GMT -5 anna7602 said:

I'm glad you're in therapy.

As far as the stuff-buying goes, can you return any of it- the $200 purse for example? Is part of the thrill you get the actual purchase and not the use of said purchase?

Absolutely. It is the thrill of the purchase and the shopping in general. I don't usually go for really high end stuff or anything (the $200 purse is by FAR the most I have ever spent on a purse), I just want to spend money.

[SJ]

Aug 27, 2012 15:50:47 GMT -5 aeindebt said:

Aug 27, 2012 15:45:55 GMT -5 SJ said:

You said "we" several times. Are you married? Do you combine finances? How much does your SO make? How much does your income range? (ie what is the lowest monthly take home and the highest monthly take home?)

Yes, married. 152,000 is our combined income, although I am the primary breadwinner. ALl finances are combined.

Take home, the range will go from $4800 (on VERY rare months), to 9000+ on very good months. This is after taxes, 401K, ESPP and health insurance.

Does your H know about your problem? Does he participate in the finances?

The variable income definitely makes it harder, but it's doable.

I honestly don't think $19K of consumer debt is too scary on your income, but it will take work & discipline. I'm heading out now but will come back later and try to help.

[aeindebt]

Oh and yes, I can and will be returning the purse, jacket and shoes. At least I realized what I did this time before I wore/used the stuff.

[ijack]

How much are your car payments right now? Interest rates on cars, SL, and CC?

Without your car payments and food/fun/etc you're at about $4k/month in expenses. Lets get the other numbers and work from there

[aeindebt]

Aug 27, 2012 15:54:05 GMT -5 SJ said:

Aug 27, 2012 15:50:47 GMT -5 aeindebt said:

Yes, married. 152,000 is our combined income, although I am the primary breadwinner. ALl finances are combined.

Take home, the range will go from $4800 (on VERY rare months), to 9000+ on very good months. This is after taxes, 401K, ESPP and health insurance.

Does your H know about your problem? Does he participate in the finances?

The variable income definitely makes it harder, but it's doable.

I honestly don't think $19K of consumer debt is too scary on your income, but it will take work & discipline. I'm heading out now but will come back later and try to help.

Thanks. 19g is scary as shit to me, because this is the first time I have added it up in awhile. I never ever thought it would get to this point.

And yes, H does know that I am bad with money. He knows apx what our bills and debt are, but I am the payer of bills and handler of finances. He does have all passwords ect. The issue is that HE is bad with money as well. Not to the same extent as me, but enough that he doesn't find the way we live to be that troubling - because he enjoys it too.

[dr.girlfriend]

Sorry, I want you to get good responses, but you might need to do some more legwork for us. Can you edit your OP to give us the total for your fixed expenses, and the range of total monthly take-home?

I agree with returning what you can, selling as much as you can on CL and ebay, and putting those "returns" straight towards the debt, as well as freezing your credit cards, budgeting for your lowest-income month, and putting any extra income towards debt.

What was the story with the personal loan? Why did you get it, and is it from a bank, or family, or what?

How much of a role does your DH take with finances?

[Susie]

We have some of the varied income issues, since about 1/3 of my annual compensation comes from bonuses which are paid out only quarterly, and which vary (quite a bit) based on my productivity and my clients' timeliness in paying their bills. They're % based, and are basically commissions on receivables.

The way we deal with that is having a monthly budget based on salary only. It's pretty no-frills: it doesn't account for any real travel/vacations, discretionary/cosmetic home improvement projects, etc., but it keeps the bus running on time and we're able to stick to it. Then the bonuses just pay for frills. If a larger portion of your income is commission than mine, that might be difficult, but it works for us. It really makes us "live within our means" (which is a good thing!) because we "live" on $35k less/year than I actually make.

It sounds, though, like the biggest thing is the impulses. You sound like a candidate for freezing your credit cards in a block of ice, deleting your saved credit card numbers from amazon and other online retail accounts, and returning some splurges from this weekend so you can avoid the self-loathing over what you've just done. An envelope system might really help.

[glynn2009]

Cash system would be the way to go then you can not over spend. Cut up the CC's. I would pay the bills that need to be paid then take out what ever cash you have for each expense and keep in a labeled envelope. Transfer the rest to pay-off a debt. Then you are forced to live on the cash. It will be hard sometimes butthe weeks you still have cash you can treat yourself.

[krystee]

Dave Ramsey has a budget template for variable incomes in one of his books. You start by doing a budget based off the minimum monthly salary you've earned in the past two years (I think). Everything is written in priority order from highest to lowest. Then draw a line and start adding in the rest of the items you need want that go beyond that minimum amount. When you see your salary that month, you figure out how many of those things you can do and you cross out the rest. Good luck! I have the same impulses with food and, to some extent, money.

[aeindebt]

Aug 27, 2012 15:55:05 GMT -5 ijack said:

How much are your car payments right now? Interest rates on cars, SL, and CC?

Without your car payments and food/fun/etc you're at about $4k/month in expenses. Lets get the other numbers and work from there

Car payment is $385, but I usually round up to $400. Interest is 9%
Credit card interest rates vary, but I do have them all written down and sorted out. This is them:
20.00%
29.99%
24.24%
28.99%
8.90%
14.80%
25.99%
Luckily for me, the highest balance has the lowest interest rate. Most of the super high ones have less than $500 on them. My credit score sucks because I have too many maxed out accounts - other than that my credit is fine. No late payments or anything. But the maxed out acounts kills it.

Student loans: $13,000 is private Sallie Mae at 8.5%, all the rest are government backed. $6,392.00 at 4.5% and 20,952.00 at 6.8%.

[dr.girlfriend]

What's the story/rate on the private loan? And Oh. My. Lord if it's less than 20% stop overpaying that one and knock off some of these 20%+ credit cards!

[ijack]

Okay, stop using the credit cards. Set a liveable amount for food/entertainment each month (don't totally deprive yourself, but you need to cut back). Then I would recommend snowballing your debt, starting with the highest interest rate. There should be months that you have a couple thousand dollars laying around after you pay your bills - that will pay off a couple credit cards right away. I agree that this is totally doable, but you're going to have to be a bit disciplined. Would it help if someone laid out an exact budget for you?

[Deleted]

www.youneedabudget.com/blog/2011/slaying-the-variable-income-dragon/

[aeindebt]

Sorry, trying to keep up with questions - I am at work so makes it a little hard. I am not ignoring anyone, promise.

[aeindebt]

Personal loan is with bank at 15%.

[mollz007]

Could you get rid of cable and just watch TV on Netflix? I see that the cable abd internet is bundles. Is there a way for you to unbundle that?

I would also maybe cut the charity spending too. Maybe that's a flameable opinion, I don't know. I'm not saying stop it all together, just maybe cut back some.

I agree with not using the CC.

Could you move somewhere cheaper, or is that rent standard for your area?

[livinitup]

In very general terms, the thing about growing up poor is that you learn that money is meant to be spent. Sure, many poor folks work HARD for their money, but not having a lot of it means that it almost always gets spent. You never actually manage money. In your description, you made a point of saying that you buy basics, nothing too extravagant- just lots of it and wastefully. That might not be different than being poor . And you've never managed money. - that's a skill and it needs practice.

So, that's something you need to learn. And take seriously. First step, make returns - keep the receipt in your wallet and items in your car - and don't buy more stuff when you go back. Second, inventory your closets - get rid of the junk and LOOK at what you have (kitchen too).

Calculate your debt (with interest charges) and determine how long it will currently take you to pay off each debt - try different rates of pay off each ,month and really look at and absorb the ramifications. Then determine the amount of money you will save each month by not paying interest charges. That can be a big number. Think about what you can buy with that - something real and tangible.

Depending how fast you want to pay off your debt, determine how much you set aside to spend each month. Then stick to that amount. Track purchases and be honest when you have to stop spending. Deal with the emotional issues that prevent you from doing this.

[aeindebt]

Aug 27, 2012 16:24:40 GMT -5 mollz007 said:

Could you get rid of cable and just watch TV on Netflix? I see that the cable abd internet is bundles. Is there a way for you to unbundle that?

I would also maybe cut the charity spending too. Maybe that's a flameable opinion, I don't know. I'm not saying stop it all together, just maybe cut back some.

I agree with not using the CC.

Could you move somewhere cheaper, or is that rent standard for your area?

I could cut cable, although that woudl be a battle and a half with H. He loves his cable. I do think I could at least cut back - we have all the premiums right now.

We actually have a really great deal on rent for our area thanks to some awesome landlords who have not raised it once since we have lived there.

I would feel like a jackass of epic proportions cutting out the charity spending - I feel like I should be giving more, not less. I feel insanely guilty over the amount of money I blow, and I guess giving a little bit monthly helps me in that arena.

[SJ]

Can you tell us how much your DH brings in? Then we can try a "base case" budget for you.

[lys]

Do you REALLY want to change or do you just want to complain?
If you want to change the
Cut up the credit cards - all but the one with the longest history and freeze that one in a block of ice.
Go to cash only
Set up a budget
Read Total Money Makeover by Dave Ramsey
Read Smart Couples Finish Rich by David Bach
Give yourself a cash allowance and when it is gone - it is gone
Pay extra on all debt
EAT AT HOME!
STOP BUYING CLOTHES - wear what you already have
If you want to have $$ in savings, buy a house and have a child, you have to change your relationship with money.
Decide what is "enough" - # of jeans, shoes, purses etc.
(As another person who grew up poor, I am a super saver and like the security of having money)
If you want to spend, give more to charity, buy a poor child new shoes and a cute back to school outfit,
Find a new way to spend your free time - volunteer at a domestic shelter for women, a food pantry or soup kitchen.
Life is not about stuff.
Keep going to therapy - you do not need to be perfect to be loved.

[aeindebt]

His take home base is about 2200 a month. My base is pretty much identical.

Oh, and I am an idiot, I totally calculated take home range wrong. Brain is a bit scattered right now. That range should be $6000 to about $11000. Usually runs right in the middle though, around 8ish.

[aeindebt]

Aug 27, 2012 16:38:27 GMT -5 lys said:

Do you REALLY want to change or do you just want to complain?
If you want to change the
Cut up the credit cards - all but the one with the longest history and freeze that one in a block of ice.
Go to cash only
Set up a budget
Read Total Money Makeover by Dave Ramsey
Read Smart Couples Finish Rich by David Bach
Give yourself a cash allowance and when it is gone - it is gone
Pay extra on all debt
EAT AT HOME!
STOP BUYING CLOTHES - wear what you already have
If you want to have $$ in savings, buy a house and have a child, you have to change your relationship with money.
Decide what is "enough" - # of jeans, shoes, purses etc.
(As another person who grew up poor, I am a super saver and like the security of having money)
If you want to spend, give more to charity, buy a poor child new shoes and a cute back to school outfit,
Find a new way to spend your free time - volunteer at a domestic shelter for women, a food pantry or soup kitchen.
Life is not about stuff.
Keep going to therapy - you do not need to be perfect to be loved.

I am not sure where I complained, but I do appreciate all the advise and I am absolutely taking every single word of it to heart. If I seemed to be whining at all it was not intentional. I am 100% dead serious about fixing this mess.

[ijack]

here is my go at your budget. I didn't know what your SL payment was so I guessed. And I didn't even really "push" that hard. With this budget at the very least you have $700/month left for paying off your credit cards. Start with the one with the lowest balance, pay it off next month. Then pay off the next one, then the next one, etc. Here is a great spreadsheet to help you www.getrichslowly.org/blog/2008/08/26/free-debt-snowball-spreadsheet/



rent 1750
cell 160
car insurance 151
cable 220
electric 120
gas 15
trash 14
water 30
gym 50
charity 60
netflix 8
cc min 580
PL min 450
SL 500
car 400
fun money (each) 200
groceries 400
eating out 200


total 5308