Hello debt haters! A few weeks ago I received an email from a reader that suggested I write a post about how other people spend your money for you. I have to admit it is a great post idea, and I am really surprised I had not come up with it earlier. You see, I have my own issue with this very problem.
Kelly in Cleveland Ohio wrote in:
“I’d love to see an article on “When others spend your money for you”. For example, a 50th wedding anniversary for my fiance’s parents. We were just notified that we’re paying 1/3 of a $20+ per plate gala for 60 people. We suggested low cost options- church cost $50 to rent, and we could cook ourselves, do set up and cleanup, etc… but now there’s a rift because we even mentioned that we’d have a hard time budgeting an extra $150 or more per month (on top of a wedding!). They are obviously paying on credit card. I have no credit card debt, but my fiance’ does- 15k or so that we’re attacking already on top of wedding bills. Where do people get the idea that they can spend other’s money for them?”
One of the things that really bug me is when someone else notifies you of an expense you didn’t plan for. Birthday parties, going away parties, work luncheons, etc. They seem to volunteer you without ever considering the alternative, which is asking you. Now to be clear, I am not against celebrating a co-workers departure, a birthday, a wedding, or a surprise luncheon, but I have a big problem with other people—who probably have no plan at all—spending your money for you.
The worst part about these common occurrences is that if you were to choose not to participate, if that’s an option, you look like a big jerk. You may then be labeled as a cheap, stingy, or scrooge-ish person, but even if you aren’t, the pressure to participate is still there. Another scenario that seems to be very common is when friends invite you to go out to eat. If you say no, you might be berated, but if you say yes you may spend more than you should. I’d rather say no.
My wife and I have discussed this many times as she seems to always come home to inform me that we are responsible for buying something for this or for that. What about the budget, I say? Do we really want to adjust our budget by taking from one category in order to account for this forced expense? We do not have a lot of waste in our budget so it may cause us to take away from something far more important. At Christmas time they often do a gift exchange where each person buys something for $20. We generally only buy gifts for the kids in our family, so this means that we spend $20 for someone else when we could of used that money to buy someone in our family something. They would and should be the priority no?
How To Handle These Forced Expenditures
Now that I have stated my case, I do not think this issue will go away. This leaves you with two options:
- Spend the money
- If you feel that you want to participate in these types of events plan for them.
- Create a category in your budget each month to deal with these types of expenses. If you don’t use the money allotted for that month, carry it over to the next month.
- Place an amount you agree on, (for the year) in an envelope and vow to only use it for these surprise expenses. When you run out, you run out.
- If you want to plan for bigger “surprise expenses”, figure out how much you want to set aside, and put away money each month to fund it.
- Don’t spend the money
- Say NO, without feeling bad, it is after all, YOUR money.
In conclusion, I will say that you should never spend your money because you feel forced to do so. If you want to participate in an event that causes you to change your budget, do so, but be sure to adjust your budget. Another piece of advice would be to NEVER use a credit card to fund these random expenses. Spend your money the way YOU see fit, not how someone else sees fit. They don’t have to pay your monthly bills, you do.
Furthermore, if someone came to me and “told” me that I was going to be responsible for funding such a big amount, such as Kelly experienced above, I would flat out say no. There is something rather arrogant about someone coming to you and telling you how to spend your hard earned money because they have deemed it worthy. (kind of reminds me of the Government.)
Do you have a similar story to share? Please feel free to discuss it in the comments section. I would love to hear your thoughts.
photo credit
I often find myself thinking about what someone’s financial profile might be based on certain little facts. Okay so maybe I have been watching a little too much of the show Criminal Minds, but I have started to think I can come up with a financial profile for everyone. Haha!
Trust me, I am not an expert, but I could take a shot at it for fun, right? Below I have tried to come up with a profile for the good and the bad. Could I work for the Behavioral Analysis Unit as a profiler or should I just stick with my passion? I’ll let you be the judge of that. If anything you will be entertained and we can still call it a good day! 
So what is your financial profile?
The Good
- retired, wealthy, and having fun - A hard-working saver. A good planner with solid financial decisions. Someone who decided to get the hard part over first rather than second. A person who knew the value of a dollar and spent frugally, while building wealth slowly along the way.
- wealthy and very generous – A self-made and hard-working debt free individual, full of integrity, whose not flashy, enjoys a challenge, and thinks frugality is a lost value. This person is very generous and gives freely without complaining.
- well-off and generous – A frugal spender and generous giver, who has a great income with a cozy savings and retirement fund in place. Someone who worked hard to build their assets and appreciates what they have.
- comfortable, generous, and stable – Hardworking but possibly wasteful at times in the spending department. Comfort is dangerous as it often leads to complacency. This person could be debt free and in the middle of their journey to financial peace, or quite the opposite, and pops credit like Tylenol. Probably a mild to moderate saver, with plenty of potential.*** (I would place myself in this profile,except that I shred credit cards with LOVE.)
- poor, but resolute, and very generous – A frugal, hard-working individual with dreams, goals, and aspirations bigger than most. Someone who takes things as they come and deals with them best as possible, but then moves on to work even harder in order to win. Someone who gives even though they have very little to offer. Most likely had excellent parental involvement growing up. (this type of person helped build America!)
- teenager with savings – A very bright young mind who likely had some early financial coaching from mom and dad about how to avoid debt and save for the finer things in life. Well-grounded and not even a free shirt can trip her up.
- physically disabled entrepreneur – Someone who took “making lemonade” to a whole new level when life handed them lemons. A very strong minded individual that rarely wobbles under pressure. Not because they always succeed, but because they know they can. They may be obsessed with rising above their handicap to prove they can.
- in transition to financial responsibility – Someone who decided enough was enough. Open-minded, yet cautious but willing to try something different in order to gain control. Just making it to this place in life says a lot about this person, since most people continue to float along oblivious of their talents, abilities, or the need to change. This person recognizes that extra effort and new habits are needed to change direction.
The Bad
- retired on a fixed income – Either heavily tanked in the market, experienced very high medical costs, relied on social security for retirement or any combination of the three. (many other factors could have played a role…a tough one to profile.)
- wealthy but greedy turd – A business owner with limited people skills. This person is opportunistic, extremely selfish, and possibly a trust fund baby. Totally disconnected from the needs of others. (Possible nicknames: Scrooge McSuck)
- well-off but broke – A hard-working individual with a great income but no sense of purpose. Infested with credit cards and loans, and has an obvious lack of appreciation for the fruits of their labor. Might lease their car instead of buying since they trade in so frequently. Not stingy, but unable to give at all. Material possessions rule the day while delaying gratification never comes to mind. (been there!)
- comfortably broke and bitter – Not a huge income-earner, but enough to squeeze by. Multiple credit cards, pay day loans, car payments, lottery enthusiast, bloated mortgage, overdraft fees, interest payments and any form of debt is considered not only normal but the only way to survive. All of their income is spent on stuff before the check is ever cut. Likely has accepted the way things are and sees no reason to try something different. (been there!)
- poor loathing victim -The lowest of the low. Carries pent up resentment for those with anything more than himself. Believes nothing can be done to change their circumstances and waits with open hands for others to give him what he feels he already deserves. Typically very negative in demeanor about any topic of discussion no matter what. He always sees the negative in everything. (yep, been there too!)
- teenager w/credit cards – A most horrifying and tragic fate filled with impulse shopping sprees, late fees and a “must build my credit score” mindset. A train wreck waiting to happen. Parents did not likely talk about money other than passing down the culture driven myths that showcase status not security. Bankruptcy waiting to happen, on the bright side—they got a free hat!
- physically disabled w/fixed income -Apart from those who truly cannot, this person has accepted their situation for what it is, and truly believes that their disability in one area of life, restricts their ability in all areas of life. Relies on disability and possible social security benefits to get through life. Wants more but doesn’t believe they can and is overcome with fear. (I believe in you!)
- in transition to financial disaster – A trust fund baby, lottery winner, or pretty much anyone who has given up on themselves. They likely did poor people stuff with their money and are finally reaping what they sowed. Possible bankruptcy candidate. Will either hit rock bottom and bounce back or stay down for good. (Get back up and do rich people stuff! Don’t give up!)
The Ugly
No matter whether you find yourself on the good or the bad side of the spectrum, you can still experience ugly.
For the good – ugly follows complacency and arrogance. There’s nothing worse than successful arrogance from someone who thinks life could never cause them hardship or disaster. The blindness feeds denial, which halts any possible growth. You are never too wealthy or too smart to lose everything.
For the bad – ugly is wanting more without the effort, expecting your situation to change without different behaviors and actions. Ugly is the lack of personal responsibility and motivation, while continuing to believe something or someone else is standing in his way. Just maybe that someone is himself.
The questions we should be constantly asking ourselves—regardless of our profile.
- How can I do better?
- How can I serve others?
- How can I learn more?
- How can I give back?
- What’s my next goal?
- Am I doing enough?
- Am I prepared?
No matter who you are there is room for growth and development. You can have it all, but still have nothing, as much as you can have nothing, and still have it all. (Maybe to some ALL is LESS.) Ultimately it is up to you to decide where your life ends up. If you are physically disabled, learn everything you can about computers and do something you love. Umm…start a blog! If you’re living comfortably, but always feel broke—you might want to step it up a notch? I believe there is always a way, we just have to find the door to the other side.
I am sure that this will come off as harsh to some, but I know more can be done because I used to have a bad financial profile. I used to blame others. I used to expect life to just happen. I used to believe there are just some that can’t get ahead.
I also used to believe that I needed a credit card to have anything, needed a car payment to own a car, needed student loans to go to school, and that debt was a tool to make people wealthy. I eventually found out that I could be a debt free pizza driver, striving to earn a debt free degree, start a business, while helping every last person, with an ear drum or eye sight, to become debt free and better manage their money.
My life changed when I MADE it change!! As soon as I stopped pointing the finger, acting like everyone owed me something, and took action, MY LIFE CHANGED! So can yours, but you have to really want it!
Wherever you are, you do not have to stay there! Keep moving!
Debt: The Drug, The Dangers, and How To Turn Things Around
I would say it is the drug of choice for 7 out of every 10 Americans. Does that make it dangerous? Absolutely! Should it be illegal? I wouldn’t go that far, as I believe in your freedom to conduct your life as you see fit, but what I would say is, that education is the easiest way to combat poor financial choices.
I know I will catch some attitude from the “I pay my card off monthly” crowd, so I will add that moderation is key. Actually moderation for just about anything is key but in this case, I still say do without. Now you have another reason to do without since some reports indicate that a few banks have decided to charge additional fees. It probably won’t be long before others follow.
It’s their business and their prerogative so I guess that leaves you two choices. Pay the fees or stop borrowing the money. You cannot borrow money from someone who has taken all of the risk and expect all of the rules or fees to benefit you. Remember YOU went to them and practically begged them for that piece of plastic or nice new ride. That’s the price of being addicted to debt.
The Dangers Of Being “Under The Influence” Of Debt
Some people are in denial about how or even if debt is affecting their lives, so I have put together a list of “side effects” to help you determine your addiction. Symptoms may vary depending on the extent of your addiction.
- impairs/disables cognitive function
- spawns extreme cases of denial
- confuses basic mathematical abilities to add and subtract
- may cause heart attack associated with stress
- causes erratic episodes of impulse spending
- can lead to bankruptcy
- may cause acute blindness
How To Avoid The Pitfall That Is Debt Intoxication
As you know addictions are sometimes hard to break but it can be done. I would advise that you start my 12 Step Program to becoming debt free. What is needed the most is a paradigm shift because what you have been doing so far is not working. It’s okay though because I was once where you are now. I believed debt was a tool. It is a tool all right—a tool to help banks make TONS of money off of YOU. Start making your money work for you and let the banks and credit card companies fend for themselves.
Here are some additional steps to help you change your approach to managing your money:
Good luck in fighting your addiction. Not an addiction you say? Could you give it up today and still pay your bills? Whether you’re addicted or not, eliminating the use of debt in your life is something you should consider. The freedom that follows is absolutely worth it!
They call it personal finance for a reason. Each individual plan, will at times need a tweak here and there depending on your circumstances. Today I want to share with you how we have taken a detour, but for good reasons. No plan is bad as long as you are reaching your financial goals in the process.
As most of you know, this Wednesday, we will be introduced to our new little man Noah. This has caused us to re-evaluate our goals as it is related to our current place in our financial plan.
We have recently become debt free so we are currently on baby step 3 of our Total Money Makeover—saving $15,000 to fully fund our emergency fund. We still fully intend to reach this same goal but have decided to take a detour to better serve our current needs.
We currently have $1300 in our ING Direct online savings account. (We had just over $1600 up until I got sick, and then we had to use some because I had to take off an entire week, which was completely unexpected.) It’s why they call them emergencies and it is precisely why you need an emergency fund. We used a little over $300 of our savings, but who cares? We are still in great shape, and here’s the best part—we didn’t have to borrow a stinking dime to help us through our unexpected chain of events.
My wife, Mrs. Enemy of Debt Lite, (<~~I say that because I am the insanely motivated and extremely hardcore driven maniac) is taking off an entire 3 months after delivery. We are very excited about this but it is part of why we needed to make some adjustments. She will not get a full paycheck the entire time although it will be pretty close to full at the very beginning. Each month the amount of pay declines until the third month, which is when she will need to use her accumulated leave of absence days. She will run a little short on PTO time, meaning no pay at all eventually. No problem! Since we knew she would be taking the entire 3 months off we planned for this.
Aside from that I am taking off 4 weeks myself—from the middle of December to the middle of January. The only difference is that I will not be paid at all. I would like to point out that this is why we were so hyped and motivated to get our debt paid off before baby Noah’s arrival. Not having debt gives you options, and I must say that I know a lot of people that would not financially be able to take off time like we have decided to do. This is our balance. We value being able to spend more time with each other, especially at such a wonderful moment in our life. Being debt free, with no payments, is COMPLETELY AWESOME!
With that said, we have made a few tweaks to our plan to ensure that we do not experience financial trouble, just in case life decides that we are too happy.
We have:
- $1300 in our emergency fund
- $750 in cash, some of which will be added to:
- our sinking fund that is located in a regular savings account which holds $150
We plan to keep $500 in cash on hand for liquidity purposes. The regular savings account is simply a buffer to give us some additional security. Thanks to my delivery job for making this possible as I had a record week. I worked 4 days, 30 hours, and took somewhere around 84 deliveries for a total weekly bring home of $712. Have you thought about ways of earning extra money? Try delivering pizza!
On top of all that massive change, we have also decided to work as hard as we can to pay our mortgage payments through the end of January. We have already started doing this, and hope to have December and January paid off by the end of November. We are hoping that by doing this we will keep from having to use our current reserves which will eventually become a part of our emergency fund. The only thing that will keep us from doing so, is if we have an emergency during this time. All I can say is, two months of not having to pay any mortgage payments is going to feel great! Ahhhh!!
I know how it feels to sometimes have to change your plan because something either falls through, or you forgot about something. In the past I have beaten myself up pretty bad, but lately I have tried to adopt a more positive outlook to even the most negative of situations. It doesn’t help to get overly stressed about something you cannot control. The key is to take those lemons and make lemonade.
There are three reasons I wanted to share this with you.
I wanted to:
- encourage proper planning to increase preparedness.
- emphasize the flexibility that comes with being debt free.
- inspire you to find the balance in your life that will make this process worth it.
In conclusion, I want you to try and practice following the 3 A’s approach to handling any change in direction, not only when dealing with your finances, but change in general.
Also keep in mind the 5 P’s!
“Proper Planning Prevents Poor Performance” – Brian Tracy
Good luck and enjoy your lemonade!
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