Tips And Guide For Debt And Loan Management

Like any relationship, your relationship with money can take many forms. It can be good or bad. It can be dysfunctional, or it can be healthy. Most people with chronic debt problems have some sort of an unhealthy relationship with money. The key word is chronic. Many people who have a healthy relationship with money consciously choose to go into debt because it enables them to do things they otherwise could not, and these people have a plan for how they will service the debt. Debt becomes a symptom of an unhealthy relationship with money when debt is created unconsciously or when it is unmanageable. The fact that you bought this book probably, though not necessarily, indicates that you are probably no longer creating debt unconsciously.

As we grow up, we learn about money from our parents. Unfortunately, for many people, plenty of these lessons were negative. One reason is that our parents learned about money from our grandparents, many of whom were children of the Depression. As a result, a lot of people learned that money was a scarce item, and owning it was something to be afraid of or embarrassed about. Sam learned this lesson in childhood. Sam’s father was a successful entrepreneur who made a very good living. But he had always told Sam that he was “not made of money.” Despite the fact that Sam’s dad made plenty of money, money was still a constant point of argument and worry in the house.
When Sam’s first daughter was four, he found himself one day telling her that she could not have a new toy because he “was not made out of money.” Realizing that he was merely mimicking a family belief about the scarcity of money, Sam decided to buy her the toy, more for his own good than hers.
That experience was the first step in a long process of rethinking his money values and fixing his relationship with money. From that day forward, Sam would say to himself, “I am made out of money.” Of course, he wasn’t made out of money, but by using this statement to change the family belief that he had unwittingly learned and unconsciously accepted, he began to unleash himself from some of his family’s suffocating beliefs about money.
Linda had almost the opposite experience. She was raised in a family that constantly tried to “keep up with the Joneses.” Overspending was less important than appearances. As a result, the message she received from her parents was that budgets were bad and overspending was good. As an adult, she realized that she had some work to do.

Some of us adopt our family’s attitudes regarding money without even realizing it; others knowingly and consciously rebel against their parents’ money beliefs and actions. Either way, your parents are still molding your behavior. What you should strive for is to relate to money in a manner that reflects your values today and the values you want to pass along to your children. You begin this journey by noticing what you learned from your parents about money:

• What were their actions regarding money? Was it a source of constant worry? Did they avoid talking about it? Did they always argue about it? Did they blame each other or you and your siblings for money problems? Did they act as if they never had enough, or maybe as if they had more than they really had? What did this teach you?

• Do you remember any traumatic incidents that may have affected your beliefs about money? Maybe your parents had to close a business or were ashamed of having to file for bankruptcy. Maybe you didn’t have enough money to go to the prom or felt ashamed of how you had to dress for school. How did this make you feel about money?

• What did you know about your family’s financial situation? Was it ever discussed? If it was a secret, why do you think that was so? Was money a source of pride or embarrassment? What did you learn from this?

• What was the main message you were taught about money? You may have learned that the husband earns the money and the wife spends it. If your family was struggling financially, you may have learned that your family at least had love and that rich families do not.

When you were a child, you were likely told not to ask or talk about money. Now think about that for a second. What is the subliminal message being sent when a topic is taboo? If your family avoided talking about money, did that send you a signal that money is not only a forbidden subject, but also a bad thing? We do not mean to suggest that all the things you heard about money were dysfunctional, but we would not be surprised if that were mostly true. What you need to do is look at what you were taught about money and see how that may be affecting your life today. The good news is that you can change this pattern with your own children and teach them to have a positive relationship with money so that they don’t continue the debt cycle you’ve gotten yourself into.

How your family earned, spent, saved, wasted, thought about, and perhaps even fought about money has had a powerful role in shaping your financial attitudes and behaviors today. For example, it dawned on Laurie why she had grown up to be a compulsive overspender when she finally started to think about her family’s money history. Her father was quite strict and always very tight with both a dollar and his emotions. Her mother, though, had been very loving and was rather extravagant with Laurie. Don’t tell Laurie that money can’t buy you love; she learned differently. Laurie grew up equating money with love.
As an adult, Laurie realized that she had learned that spending money (even when she didn’t have any) had become a way to feel loved. That simple realization began her process of financial solvency.
Not all families’ money attitudes are bad. Born and raised in Boston, Michael learned what he considered to be “powerful lessons” about frugality, ingrained by three centuries of New England conservation, typified, he says, by the clean-your-plate admonishment that “children are starving in China.”
He tells the story of walking down the street one day with a friend, when he watched “incredulously” as a man in front of him casually tossed the four pennies he’d just received as change onto the sidewalk. “With barely a moment’s hesitation, I scooped up the discarded pennies. My friend was clearly embarrassed. She couldn’t believe that I would literally and figuratively ‘stoop that low’.” Michael did not care. He had been raised to believe that with four pennies here and a dime there, you would soon have

Answer the following questions honestly. You might want to write your answers on a piece of paper. It is not necessary, but it could help. As you do, notice which questions tend to make you uncomfortable. Those are the important ones:

1. If your family had a motto about money growing up, what would it be?

2. Did you get an allowance growing up? Did you have to work for it or was it given to you? What did that teach you about money? Is that what you do (or plan to do) with your own children? Why or why not?

3. Was money ever discussed in your family? If not, what do you think were some of the unsaid beliefs your parents had about money?

4. Were you taught the value of a dollar growing up? Did you have a savings account?

5. Did you have to work as a teen? What happened to the money you earned? ? When did you first go into debt to get something that you wanted? How did you feel going into debt? Was this the beginning of a pattern?

6. When was the first time you remember losing money? What did that teach you? Was it helpful in some way, or did you learn to be afraid of money?

7. Did money influence your choice of careers? Was that a good idea?

8. How do you feel about money now? Is it your friend or your enemy? Do you love it or resent it? Do you pay too much attention to it or not enough?

Simply becoming aware of some beliefs and patterns helped Mara. Growing up, whenever she asked for a special treat, Mara was always told by her father not to be “greedy.” She heard this again and again until it was finally ingrained. Making matters more difficult was the fact that Mara adored her father. As an adult, Mara always deprived herself. To be kind to herself meant, on some level, to be a greedy, disobedient daughter. Her finances reflected this. She was always broke and always ended up in low-paying jobs. When she finally took stock of her money history, one of the first things she realized was that she would have to rethink her beliefs about “greed” and accept the fact that wanting something did not mean she was a bad person or daughter.
So, what were you taught about money? All of these lessons created your personal money belief system. This belief system is firmly established in most children by the age of 14. After that, because there is a cultural taboo against personal discussions about money, you probably accepted your money beliefs without question.
Your money belief system forms the basis of your relationship with money. It tells you whether to spend or save, whether to invest in stocks or to buy a new car, and even how to price your services. Your money belief system decides whether you will be a borrower, a lender, a saver, or a spender—even whether you will be rich or poor.
Do you doubt this? How can you ever expect to get rich if you believe that money is the root of all evil? Your actions, based upon that belief, would repel money away from you. You may assume others around you have the same beliefs and values about money, but guess again. It is safe to say that Bill Gates has different beliefs about money than you do. (Or than we do!)

Let’s begin with the supposition that your beliefs create much of your life. If you believe that it is important to be a good Christian, you will behave accordingly. If you believe in sacrificing your own needs for the good of your children, you will make life choices based upon that belief. People who believe that they can drive after a few drinks make different choices than those who don’t. The funny thing about a belief is that it may or may not be true. How does anyone know whether money figuratively grows on trees? Is money the root of all evil? No one knows for sure. The great thing about a belief is that it can be changed, as you will see in the next chapter.
We all have money beliefs, and although you may not know it, many of yours may be quite negative. Just look at some of the most common sayings and beliefs about money:

• Money is the root of all evil.
• Money doesn’t grow on trees.
• Money isn’t everything.
• Money can’t buy you happiness.
• Money can buy you happiness.

There are plenty of money slogans reflective of negative societal beliefs about money: blood money, drug money, dirty money, funny money, and so on. Is it possible that you may have unknowingly adopted some of these negative beliefs about money? Yes, it’s possible. Actually, it is more than possible; it’s probable.
How do we know? Look at the facts: you are deeply in debt. Being in debt is a symptom of unhealthy beliefs and attitudes about money. Becoming more aware of your money beliefs is your next step toward resolving your indebtedness.

You can receive money messages from many sources, not just your family:
- What did your religion tell you about money? Many religions foster a belief that money and spirituality are mutually exclusive. Were you given the message that to be successful financially meant you had to be a bad person?
- What did you learn about money from your friends? Was it cool to be struggling for money? Maybe it was cool to be driving a BMW. Did you unintentionally pick a money mode so that you would be like (or different from) one of your peers?
- What did you learn about money from society? Jeff grew up wanting to be an artist and became enamored with the “struggling artist” lifestyle. Although he was ready to finally make some money by the time he turned 40, he had a difficult time believing that he was not “selling out” by wanting to draw a cake and eat one, too.

You should begin to notice a theme in your life with regard to money; a theme that had its genesis in your childhood.

You have a lot of strong feelings about money and your relationship to it that you probably have never before expressed. As you begin to become aware of these feelings, (and in order to become more aware of your hidden beliefs about money), it might help to sit down and have a heart-to-heart talk with money. We’re serious here. Money has controlled a lot of your life, and if money could listen, you’d probably have plenty to say. So we want you to say it. It will help crystallize things for you and further elucidate what you have been taught about money and what you believe to be true.
Get over the silliness of this exercise, take out a twenty-dollar bill, go to a quiet place where no one can see you (hopefully!), and give money a piece of your mind. Psychologically this exercise is to let you know, what you really think about money. This knowledge will greatly affect your financial decisions in the future.

• Tell money what I want from you is:
• My biggest mistake when it comes to you is:
• What needs to change about our relationship is:
• The reason I haven’t changed it is:
• What gets me angry with you is:
• A secret I have about you is:
• My biggest fear about you is:

Go for it, have some fun, get it out, and don’t stop here. You surely have plenty to say to Mr. Money. Tell him what you think. As you do, look for some beliefs you have that you may not have noticed before.
Conversations, by definition, are a two-way street. What do you think money might have to say to you if it had the chance? Consider the following:

• If money had one piece of advice for you, what would it be?
• If money had a secret to tell you, what would it be?
• What would money say about how you treat it?
• If money could sum up the main thing that needs to change about your relationship with it, what would it be?

What would need to change for you to become best friends with money?
We are asking you to do a bit of soul searching in this post Some of these things may be uncomfortable, but remember, that is where the gold is.
Stick with it. Choosing some positive new beliefs about money and getting out of debt and ahead of the game is far more important than any bad feelings that may bubble up.