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Re: START HERE : Diagnose your money madness!
Apollia said Mar 15, 1:10 AM:
I too got Type C, the “Avoidant” type. Seems true to an extent. I struggled for years to pay my credit cards until several months ago, when I decided I absolutely refuse to pay the exorbitant late and over-the-limit fees my creditors keep imposing on me.
Every month, it's about $35-$39 apiece for each late and overlimit fee on two credit cards (Providian and Capital One), for a total of somewhere around $140-$160 per month - not to mention the jacked up penalty interest rates and the fact that they're also charging interest on the huge fees they keep adding to my balance.
I used to have trouble with the minimum payments alone, which were way beyond my ability to pay on my own - and now that I'm so far behind and they're adding every past due minimum payment onto every month's minimum payments, there's no realistic way for me to ever get caught up.
Now I supposedly “owe” almost $2,000 more than my balance before I stopped paying. But now that I have truly resigned myself to never paying them, I actually have a lot more peace of mind than I did before, and am thus far better able to focus on things which might help me get out of my financial mess, such as learning new skills - whereas before, the stress and misery of always having to somehow pay my bills despite not having reliable means to do so made it very difficult for me to concentrate (or I felt it was futile and so would do pointless hobbies and things instead of studying, etc.).
So, yes, it is avoidant in a way for me to just let my debts go, and no longer even think about my finances very much at all (much less to the point of getting all emotionally stirred up with despair and anger at the credit card companies). But actually, I think it's probably what I should have done years ago, since the better I get at computer programming/web design, the more employable I'll eventually become.
It might actually have been yet more avoidant of me to stubbornly refuse to accept that I had no realistic way in the near term to solve my financial problems and that I might as well just stop resisting the inevitable and being so upset about it. :-)
I think some of the worst financial mistakes I made were 1) to get credit cards when I was too young and naive to fully realize the dangers, 2) to go into debt at all - I wasn't as on guard against it as I should have been, because no one really warned me, and I thought it was simply the normal way people lived and everyone pretty much had to take on some debt just to get by; and, 3) eventually, to use my credit to help my family out of some emergencies, when they probably would have been able to find some other way to manage without using my credit.
I don't regret helping my family, but, that put me into way more debt than I had ever gotten myself into. And actually, prior to that, I had almost gotten my cards entirely paid off myself, after my first brush with almost drowning in debt and hundreds of dollars in huge late and overlimit fees… and if I had had the wisdom to cancel my cards after I paid them off, instead of keeping them just in case some kind of emergency ever happened, I would quite likely not be in the position I am in now, and my family probably would have found another way to get the money and things might have been fine. So, another big mistake - I never should have kept my credit cards.
My next worst mistake, I think, was to continue attempting to pay the credit card companies for so long, instead of just accepting that it was truly beyond me, that I should save my energy, time and money and do something more productive than pour money into an endless black hole, and not continue paying dishonorable crooks that didn't even deserve how relentlessly honorable with them I was, paying them above and beyond what I truly owed by paying them hundreds of dollars of their gigantic late and overlimit fees and hundreds more in penalty interest rates, all of which I could just barely afford with my near minimum-wage income.
I think the way credit card companies operate could be labeled “money madness”, and I think it's actually a worse form of “money madness” than that of any struggling, honest individual who, unlike credit card companies, refuses to do immoral things like lie, cheat and steal for a living - because the credit card companies are basically out there exploiting people to whatever point they can legally get away with and get their debtors to cooperate with.
Another reason the credit card company's horrible business practices could be labeled “money madness” is because if they treated their customers fairly and well, I (and many others) would probably still be paying them, and furthermore, I would be happy to do so, if they didn't keep slamming me with unfairly huge fees and interest rates. I wouldn't have had any reason to start a credit card boycott.
Financially ruining your customer, ruining their credit report and thus potentially making it harder for them to even get a job or apartment (since apparently some employers and landlords check your credit report and can discriminate against you on the basis of what they find in it), and bleeding your customer dry to the point where they can't pay you even if they wanted to, is absolutely ludicrous - unless maybe your goal is to ruin society by putting millions of people into billions of dollars of debt.
I assume the credit card companies aren't _that_ malevolent, but regardless of their motivation, that's essentially the effect they're having - probably just through greed, selfishness, and obliviousness to the immense harm they're doing to millions of people's lives.
Another thing which I think does immense harm is taxes. I wouldn't have been put into so much debt in the first place if not for a family emergency where we suddenly needed several thousand dollars to pay income taxes because a self-employed relative had been unable to set aside enough money for taxes because we needed all of that income to live on.
I cannot believe there is no better, more honest way for the government to get the funds it needs to continue running than by extorting it or stealing it right out of the paychecks of honest people who worked hard for it, earned it, and deserve to keep it. What kind of a free country is this, if you can be threatened and thrown in jail for not surrendering your hard-earned, rightful property?
And still another thing which harms more than it helps is the child support system. When I was growing up, my family had to pay child support to my step-dad's ex-wife, meaning money that could have been used to support me and my baby sister was instead going to this horrendous woman who, far from being impoverished, drives a BMW and likes to waste money on things like Gucci bags and unnecessary new furniture. She didn't need the money, but we certainly did. But people can go to jail for not paying child support, so we were literally forced to pay it.
If not for this, my entire life probably would have gone differently, quite possibly better (for instance, I might have been able to get an education without having to take on huge amounts of debt, which dissuaded me from going to college).
Here's a good article on the myriad ways in which the child support system is broken: http://www.nfja.org./positionstatement/childsupportbudgetcuts.shtml
And, another harmful financial problem that could probably be solved somehow - monetary inflation, which makes it so keeping long-term savings, at least in dollars, is probably a bad idea, since the dollar continually loses value.
It seems like hardly any politician even _talks_ about solving that problem (or any of the rest of these problems).
So, there definitely seems to be a lot of “money madness” in our society, both on an individual, small-scale level (like any random person who has a problem with impulsive spending, etc.) - and in the financial policies of banks, credit card companies, other so-called financial “services” companies like payday loan sharks, the much too high costs of health care, housing, education, etc., and, probably most importantly, the frequently misguided and harmful laws and policies put into place by governments, such as taxes, the broken child support system, mandatory purchase of insurance, handing out educational loans instead of educational grants, etc.
I'm guessing probably a lot of “money madness” on an individual level could be eased or eradicated if the financial policy problems of government, corporations, etc. could be solved - since these policies directly create so many of the problems and financial pressures that cause people to behave irrationally when it comes to money.
For instance, a person who splurges recklessly might only be doing that because they're trying to ease their abject despair over being in so much debt just from paying for basics like an education, a place to live, health care, etc., that it's unlikely they'll ever be able to pay off their debt, so they feel, why not splurge on something and live it up, since they're hopelessly, eternally in debt anyhow.
But, take away that person's crushing burden of unpayable debt, and one might find that the same person actually has quite a rational approach to money, since they're no longer totally depressed about their hopeless situation.
Changing one's inner attitude toward money definitely has value, but, I think changing (or influencing) the various systems and policies in place, such as by getting politically active, boycotting unethical companies, etc., might be what it will take to alleviate the root causes of many people's problems with money.
Oh, and an idea I especially like would be for some ethical, honorable companies to move in and start competing with unethical companies (like banks with huge overdraft fees, credit card companies, etc.), by offering financial services which are truly worthy of the name.
I'm sure it would not only truly improve people's lives, but it would also be tremendously profitable, and customers would flock in droves away from their current creditors, etc. if a really good alternative existed - so I really hope someday some businessperson (or people) somewhere, or anyone else with the financial resources, decides to create some good alternatives.
Anyhow, I hope this feedback is helpful. Good luck with your book. :-)
Best wishes,
Apollia
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