Articles ABOUT getting out of Debt and staying out of debt

Uncommon Sense
In denial over money? Yes, you are

When the insidious Dr. Denial starts whispering in your ear about your late payments, taxes, overspending or gambling, it's easy to be entranced. Time to slap yourself awake with some reality therapy.

By M.P. Dunleavey
at msn.com

Here I was, thinking I�d conquered most of my financial demons, when I got burned by the oldest and most insidious: Denial.  The evil Dr. Denial is short, bald and, for a demon, very persuasive. His official title, for the record, is "King of Willful Ignorance and Subtle Acts of Self-Destruction."

"But really," he said in a brief phone interview, "I just do whatever people ask me to do: cover-ups, muddled thinking, head-in-the-sand jobs, that sort of thing."

Dr. Denial started his career with the CIA, where he invented "plausible deniability," and now manages several million cases every day. Most jobs take just a few minutes, to persuade an individual to cloud over the part of reality they'd really rather not face. Then, poof, it's on to the next poor sap.

"Big corporate denial cases are harder," he admits in a velvety voice that's guaranteed to lull you into a stupor inside of five minutes. "Enron, WorldCom, Tyco -- phew! I've been working nonstop."

Still, he had plenty of time for me this year, which was what I found out when I got my tax bill.

Denial who? Don't know him!
I have revealed many embarrassing facts about my finances in this column. I believe that what's embarrassing to me might be reassuring or educational for someone else, so get ready for a real education.

Here's the bottom line: My accountant told me that I am going to owe a lot more in taxes this year than I was ready to pay, about $9,000 more. Part of that was moving from California to New York this year, where the tax burden is higher. But my real downfall was that even though I knew (yes, sob! I knew) I should have been socking away more money in quarterly tax payments -- the penance you pay for the sin of being self-employed -- I, um, wasn't. Just � wasn't.

You may not relate to the tax debacle if your taxes are withheld from your paycheck and sent in by your employer. But if you�re like most Americans, you may have encountered Denial in one of his many disguises. Recent surveys of consumer spending indicate that Americans spend with one hand and use the other to cover their eyes.

Check this out:

• Two-thirds of Americans aren�t saving enough for retirement.
• The average credit-card-carrying household is sitting on a total balance of more than $8,500.
• And last year, Americans dropped about $63 billion on various forms of gambling.

In fact, according to the 2000 Consumer Expenditure Survey, U.S. consumers spend about $8 million a minute. Of course, this figure is somewhat skewed by the fact that people like former Tyco CEO Dennis Koslowski spend $15,000 on a single umbrella stand. But still.

Where money and emotion meet
There are many therapists in the world, but you may not know that some of them are employed, full-time, by financial institutions in order to deal with people like me who can't get a grip.

"I would say the lack of awareness of the meaning of money, and the emotions attached to money, are at the root of at least 90% of the money problems we have," says Barry Graff, Ph.D., a family business consultant for the San Diego-based RSM McGladrey.

Money is an emotional issue for many of us, whether we like it or not, and whether we're aware of it or not, Graff says. "The biggest denial of all is when people act as if money is just about money," he says. "Money is about power, it's about dependency, it's about control, it's about communication and conflict resolution, it's about status and ego."

I would add that money is also about comfort, security, fantasy, escape and anxiety.

Because those emotional issues around money are intense and often difficult -- and usually unspoken -- people don't want to deal with them. That's when Denial starts whispering sweet nothings into your ear in his soporific voice, and the next thing you know your common sense is knocked out cold.

Face those symptoms of financial denial
The great thing about Denial is that he leaves no trace, so you can pretend he was never there. "Sure, I have some credit-card debt," you say, "but I'm not in denial." La la la la. Right.

For a more accurate self-diagnosis, Margo Geller, MSW, a wealth counselor at GV Financial in Atlanta, helped me to formulate the four red flags of financial denial:
 

• You hit the same financial potholes over and over, and you're not sure why (always paying late fees; chronically short of cash, etc.).
• You find yourself behaving in ways you know you shouldn't (putting another suit you "need" on your card, eating out when you promised yourself you'd cook at home, etc.).
• You're financially stuck and can't get unstuck (unable to reduce your debt, or the minute you do, you're right back in it again).
• You find yourself using any of the following stupid rationales to explain the above:

  "I'll deal with it."
  "Other people do this all the time."
  "Right now, this is more important."
  "I need to."
  And the worst: "I don't care, I'll figure it out later."

If any of those behaviors sound familiar, you're probably in some amount of financial fog, and the reason you've obscured reality is because something is making you really uncomfortable.

As I lay on the couch . . .
Geller helped shed some light on why I'd let myself swerve off into denial about my tax situation. First she asked what feelings would come up this past year whenever I thought about my taxes. I admitted that because I'd been in the middle of so many other big changes, what I felt was, "I can't deal with this right now, I'll deal with it later."

Then she surprised me. "Are you angry?" she asked. I was about to say no, when a little squirmy feeling came over me. "Well, um, YEAH. I resent having to set aside all this money -- just to pay the government," I said, a little nonplussed by this revelation.

"Of COURSE you do," Geller said in total sympathy. "You work hard. You don't want to pay all that money. You feel like it's not fair."

Then she explained that rather than deal with the anger -- and pay my taxes -- I just skirted the whole knotty issue. And for the first time, I saw a crack in my financial denial, with a glimmer of light coming through.

How to trip up Dr. Denial
There is no easy way to get rid of him. It takes persistent awareness to stop yourself from slipping into what Geller calls "an altered state." She describes one client who took a large chunk of his money, didn't tell his wife, and invested it in tech stocks a couple of years ago -- despite his financial adviser's warnings.

"He was in an altered state. He thought he knew better," she says.

Geller says that most of the time, deep down, we know the hot water we're boiling. The trick is to catch yourself before you even turn up the flame. Typically we don't catch ourselves until after the fact. If you make the commitment to be more aware, Geller says, then you catch yourself a little earlier.

As you catch yourself en route to the car dealership or to the mall or to "check out" that sale at Circuit City, Geller says a good way to stop yourself is to ask, "What am I feeling? Am I bored? Am I lonely?"

Dr. Graff then advocates finding someone you can talk to about it -- even just a friend. "Talking dissolves denial," he says.

How do you talk about behavior you find woefully embarrassing? Or you'd simply rather not share? Because, let's face it, who does? Try writing it down. Write down the whole picture, where your trouble spots are, where you wish you'd improve, what you can't seem to deal with or face or bend your mind around.

Hey, it works for me. There's no denying it.