How a CPA Got Into Massive Amounts of Debt
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Personal finance management information is everywhere.
You can read about how to manage your money almost anywhere on the internet these days.
They write books about it. In fact, a lot of them are best sellers.
If the opportunity to learn how to manage your finances is so accessible, why are North American household debt levels the highest they’ve ever been? Why do we carry debt?
Personally, I've been there. I managed to spend $100,000 of money I didn't have in one year, all on credit.
The worst part for me is I’m a Chartered Professional Accountant, a money expert. I've been working with people for over 20 years, teaching them how to manage their money.
I have studied all things personal finance, and my husband and I'd followed our financial plan rigidly over the years.
I knew better. And then it all happened. I went off the rails.
Spending My Way Into Massive Debt
It started slowly where I would go on weekend shopping trips with the girls and buy stuff I didn’t really need or want. Then, it blossomed into a full-blown spending spree from hell, with a bunch of baby steps in the middle.
I was so out of control, and I hid this debt from my husband.
Then I upgraded my spending habit by visiting sites like Pinterest and thought of ridiculous ways to beautify my home. I even managed to convince my husband we needed a pool for the backyard (which we didn’t, but it is certainly nice to have).
If you’ve ever done a renovation like that, you know large dollars go into it, and it doesn’t really add value to your house. Absolutely a sunk cost.
I carried a lot of hidden debt and a lot of shame about it.
I knew what I was doing was wrong – it was risky behavior. I knew this was debt and was going to cost a ton of money in interest expense. But I justified it and kept going.
My shopping addiction made me feel good at the moment. I'd get a little jolt of excitement from it, a high, and then it would be gone as quickly as it came. Then, I was on to the next item that excited me.
And it all came crashing to an end when the credit ran out. I was no longer able to hide it from my husband. I was essentially outed and did I feel awful.
When my husband looked at me with sheer disappointment in his eyes, I knew I never wanted him to look at me that same way again. I had to make things right.
But it wasn’t over. I had to be sure I never did anything like this again. So I went on a search for answers. I had to understand why even though I knew getting into debt was a mistake, why did I continue to behave like that?
After trying so many different things, I met my health coach. She offered me a chance to work with her, and I signed up as a last resort. I thought it was the extra weight that was the problem.
I had no idea of what I was getting into, but I had to try it.
I quickly realized that this was not a typical diet and exercise program; this was coaching. And things were getting real….
I was learning how my feelings were affecting my behavior. I quickly became aware that my excessive spending wasn’t about the money or the weight.
It was the underlying feelings that were driving me to overspend. To overcompensate for things I didn’t feel good about but wasn’t equipped to deal with.
I had often wondered if I was unhappy, but had always considered myself to be a happy person.
I loved my husband, and we’ve had a great relationship over our 20+ year marriage. We have two great kids, I had an excellent job, great friends, nothing seemed to be off, yet it was off.
Much to my surprise, it was all connected (after months of peeling back the layers) to the fact that I wasn’t living my purpose. For years I wanted to get out of a job that didn’t suit me and build my own business, but I suppressed it.
It didn’t feel like the right time, I had no idea how to start a business, what if I failed, and the list of excuses went on. It was a feeling that surfaced for me and surfaced strongly for years, and I tried to ignore it until I could no longer ignore it.
A New Start
Every day I am grateful that I met and worked with my coach, who is so good at what she does. She helped me peel the layers back and get to the root of the issue.
I have since started my entrepreneurial journey, and I enjoy every minute of helping women manage their money and talk about the feelings that come up with that.
I've not worked with a client yet who didn’t have deep-seated emotions around money and their relationship with money. We work through those emotions, every single one of them.
It's possible to have a positive relationship with money. When you strip away all the emotions around money, you’ll see that money is a tool. It's a currency that we use to exchange goods and services.
Yet all of us have so many emotions tied around money. And that’s ok. But what’s not ok is ignoring our self-care and dealing with the feelings that make us human.
I am so grateful for this life lesson. Having experienced this myself, I find it helps me to better relate to my clients and other women because I understand what it’s like.
I’ve been the master of my money. I spiraled out of control and returned to living a positive relationship with money. I’ve felt the shame but turned it into something positive to help others.
The Work Paid Off
Now that I am on the other side of this transformation, I can tell you with complete honesty that it was worth the work to get here.
Suppose you are experiencing trouble with your relationship with money. In that case, I encourage you to take the opportunity to explore this further.
When you're in control of your money, you manage your money well. You’re set up for financial success. Not only are you well on your way to saving a million bucks, but you’ll feel like a million bucks too.
Next: Three Tips for Staying Positive About Your Financial Future
Article written by guest contributor Melissa Houston, a Business Financial Coach and CPA with 20+ years of experience helping business owners understand their personal and business finances. She's passionate about helping women achieve their financial goals through her signature Money Method programs. Melissa is also the host of the Think Like a CFO podcast.