Cash Flow
There are people that get into financial trouble due to outside circumstances. Medical emergencies, loss of job or a family crisis are some reasons. The majority of financial trouble stems from simple over spending.
Spenders who need outside help may benefit from the support of a more frugal friend who would be willing to act as a money mentor or spending coach. If you recommend to a friend Debtors Anonymous, don’t be surprised to hear a quick “no.”
Some people are too ashamed to admit that they may be damaged in this way. You may have to think of other solutions, such as a financial recovery counselor. (Karen McCall and her associates at www.financialrecovery.com and Bari Tessler’s group at www.consciousbookkeeping.com are two valuable resources.)
Two more tips: Once you’ve developed guidelines for an overspending friend, or yourself, take care not to call it a budget – a word that free-living boomers mentally translate as “ball and chain.” Refer to it instead as a spending plan, or a spending, saving, and investing plan, or even a financial growth plan.
Those of you who may be in denial about this I ask you to describe three scenarios: (1) what happens if all your dreams come true; (2) what happens if outcomes are just so-so; and (3) what happens if you have made mistakes that force you to change your lifestyle. What will your life be like? How will you feel? What will your friends and relatives say about you?
I suspect that when you reach scenario # 3 the last question may unleash shame, regret and many pent up feelings. Find out the reasons for overspending. Just like people who over eat, over indulge in alcohol or drugs the actions are symptoms of inner turmoil.