Denial is a Fool’s Game
Posted by Gail | Filed under Bad Habits!
“People, you’re in denial. You can justify spending money like a pro. And you refuse to accept that you’re spending more money than you make.”
There’s something you’re not surprised to hear come out of my mouth, right? But how often can a girl say the same thing without starting to sound like a broken record? And yet, even though season six of Til Debt Do Us Part is airing this Friday night, I’m still getting loads of questions from people who just don’t have a clue about how much they are spending. Sometimes they don’t even know how much they’re making. Really? You can’t see the money going in and out of your account?
Denial doesn’t just assert itself because people don’t make enough money and don’t want to admit it. (Hey, you know my cure for that right?) It doesn’t seem to matter how much people make, they manage to spend it all… and more. Even while they know they’re slipping further and further into debt, they won’t look at the details. They are always paying late fees, chronically short of cash, and bouncing cheques like basketballs. Yet they refuse to get out the paperwork, do the math and figure out where the holes are.
Even people with only a small amount of debt are in denial if they are spending everything they’re bringing in because they are “denying” the potential disaster that’s just around the corner. Just one small slip, one tiny emergency, and their just-in-time system unravels and they fall behind.
Then there are the people who refuse to file their tax returns because they think they owe money but would rather deny their obligation to pay than just pay up and be done with it. People, the tax man can go into your bank account and take his money… leaving you short for your mortgage or rent payment. Yup, he can do it! And he does. So if he hasn’t gotten to you yet, consider yourself lucky that you have the time to fix what’s broke.
There are the folks who find themselves financially stuck, unable to reduce your debt because they’re only making their minimum payments. Whazzup with that? Are you so committed to spending money on crap that you’re willing to pay double (when you add in the interest) and carry the debt for a decade?
There are the people who having paid off a horribly high balance, rush out and run their card right back up to the limit taking a vacation, shopping, doing whatever they’ve not been doing while they paid down their debt because they’ve “earned” it. How much of a masochist are you?
If you find yourself behaving in ways you know you shouldn’t – buying another outfit when you’ve said paying off your line of credit is the most important thing, or eating out when you promised yourself you’d cook at home, then you’re in denial. If you can’t resist spending money even when you know that means you’re going home to juggle bills, you’re in denial. If you haven’t told your family and friends that you’re in hock up to your eyeballs so you can pretend everything is “fine, just fine”, you’re in denial.
And if you hear yourself saying things like:
- Everyone else is doing it
- I work hard, so I deserve it
- I don’t care. I’ll figure it out later
you are definitely in denial.
Tired of living with the spectre of disaster looming? You have to find someone to talk to about whatever it is you’re in denial about. Talking about it is the only thing that will help dissolved the denial. That’s one of the things I do for the couples I work with: I open up the cupboards of their financial lives and air them out. We talk about why they’re acting like dopes, and what they actually want to achieve. Then we make a plan.
So, what are you in denial about? And who are you going to fess up to, so you can get the Denial Monkey off your back?
Hey, I’m listening.
March 9, 2009 at 8:27 am
Oh.. I know too well these people you are talking about. The sad part is, he is my father. He is too proud to admit he’s irresponsible with money and my mom is suffering because of it. He doesn’t want to look at the details because he always says he’ll take care of it. But he doesn’t. I feel so sad for my mom. My sibs and I have bailed him out one time too many. We can’t do no more. But our hearts break to see our Mom have to work so hard to make ends meet. But we can only do so much, right?
March 9, 2009 at 8:33 am
gail, this blog entry rings so true for me. i’m in denial. i’m in denial big time. i say things like, “everyone else is doing it”, “i work hard, so i deserve it”, “i don’t car, I’ll figure it out later” and my specialty, “you only live once”. i desperately want to live a frugal and debt free lifestyle, but instead of coming closer to my goal we are simply getting further away from. living more large, eating out more, buying more stuff, and living outside of our means.
this is the most that we have made in our lives and yet we are the furthest in debt that we have ever been. as more money comes in more goes out then we have. i’ve never been able to decipher why i am like this with money, but i think it has something to do with growing up in a poor household and not having many things available to me and now not wanting to deprive myself of anything.
who will i talk to about my denial? probably a good place is to start with my husband. maybe if he reads this blog post and hears me talk, it will give us the boost we need to get me out of denial.
i’ve been posting less comments on the blog lately, mostly because your entries have really been hitting home with me. making me think about stuff that i would really prefer to ignore or sweep under the rug. basically, continue to be in DENIAL about.
gail, as always you know what to say to make people truly think about themselves, their actions, and the state of their affairs. thank you again.
March 9, 2009 at 8:57 am
Dinah,
I hear you. I am in the same boat. My family income is the highest it has ever been, one child is off on his own now so we only have 2 at home to pay things out for but we are worse off than we have ever been. As soon as we pay off one thing we rack up another. I have tried the jars and do well for a couple of weeks but then end up going back to our old ways.
The scariest part is that I may soon not have an income as my husband is supposed to be transferred to another province so I will be giving up my job to accompany him, I have no idea what will happen when we lose my income. I wonder sometimes if we will ever see the light. I watch Gail’s shows and read her blog all the time but for some reason don’t seem to “get it” or I get it for a short period of time and then revert back. It’s like money is like a drug that you get away from for a while then it takes over your life again.
Hubby and I talk all the time about the debt and what we “should” be doing but never seem to stick to it. We both came from middle class families who gave us what we needed but didn’t overindulge us so I don’t really have any excuses or reasons as to why we are like we are but can’t figure out how to just stop spending. One of the big issues is also that we are both spenders. What to do…..
March 9, 2009 at 8:58 am
Great post Gail. I know more than a few people that are in denial about how much they owe and think everyone is in as much debt as they are.
Dh pointed out that I have been bribing the kids with money and material things lately. Something I say I don’t do. As they get older the “cost” of the bribe is getting bigger and bigger so I better get a handle on it now!
March 9, 2009 at 9:15 am
I’m in denial about how hard we’ll be hit if I have another child now.
But it’s a good thing. Sometimes, you just have to jump right in. If I wasn’t in denial the first time around, with my first baby, I would have missed out on the world.
March 9, 2009 at 9:46 am
To Dinah, maybe you are trying to do too much too fast. I would pick one thing that is easy to do, like shopping for groceries with cash and sticking to that budget, then pick one day a week/month whatever that you go out to eat, pay with cash and stick to that budget and so on. Maybe that way you won’t feel deprived and revert back so fast. I have been doing really well, but I’m not perfect either, I have slip ups but I accept the fact that I’m not perfect, and I will do better next pay. I think if you don’t accept “failure” you’re bound to find yourself right back to where you started, because you think “what’s the use”. My dad always used to say there was only one man that was perfect and look what they did to him! Sick sense of humour but you get the point! Anyway, it’s such a good feeling to be in control of your money that I would never go back to the old way, no matter how much work it is doing it right. Waaaay too much stress! Good luck and just keep at it, Rome wasn’t built in a day…
March 9, 2009 at 9:57 am
I am seriously hoping we’ve broken out of our denial rut for good!
We had a serious case of the denials. In our minds, we both earn VERY good incomes, therefore we didn’t need to play as much attention to our finances as we should have been. I mean, it’s like we’re buying a boat, or anything right?
Yeah, until I forced hubby to sit down with me and actually work out how much we were spending each month and what we were spending it on. Whoa! Way beyond our means. It hadn’t caught up to us yet, but it was about to, and I’m glad we got things under control.
As scary as it was, removing our heads from the sand, it’s way easier now. We know we’re going to spend money, but at least now we’re applying it towards our goals, instead of frittering it away.
March 9, 2009 at 10:01 am
Oh yeah, I can relate. I’m fond of the “I’ll figure it out later’ strategy. Like some other posters my husband and I both earn good salaries, but we have debt. Its good debt (student loans, mortgage) for the most part but its still there. I also have around $1500 on my CC b/c I’m in grad school employer subsidised and I put the costs on my card up front, then pay it off as I get reimbursed but I hate having it.
We live frugally for the most part, but so much $ is tied up in fixed expenses like child care. We both work extremely hard and I’m bad for rewarding myself with stuff I don’t need. I make enough that I can afford it (pay cash not credit). However its’s still not a planned purchase. I know I could do something more productive with that $, but I don’t.
March 9, 2009 at 10:02 am
Get rid of the credit card that was just paid off, it makes it harder to revert to your old ways if you keep getting rid of credit opportunities. I have had 4 CC and a LOC, I have 2 CC paid off and I got rid of them the second they were paid off. I plan on getting rid of another CC and I’m getting rid of my LOC once I am able too.
To me, its like keeping the cookies and ice cream at my hip.. I keep them out of the house and guess what I’m not 220 lbs anymore!
March 9, 2009 at 10:11 am
I was in denial but thanks to Gail, I’m not anymore!
It’s too bad thou because alot of my friends still are and actually call me cheap cuz I simply tell them “Sorry, we can’t afford it” haha
I guess everyone has their light bulb moment at different times!
March 9, 2009 at 10:53 am
“Everyone else is doing it ” NOT SO!
A bunch of people here are not doing it.
The rest will get there soon!
March 9, 2009 at 11:17 am
We used to brag that we could afford to be lazy with our money. what a joke! We totally could not afford to not know where it was going or why we had to rely on our credit cards by the end of the month. We had ourselves convinced that we were fine, though, until it caught up with us.
Even after watching Gail’s shows, reading this blog, using the cash only and jar system . . . it is still challenging. Our budget is weighted heavily toward saving, so going ‘over’ is not a debt situation anymore. It just shouldn’t happen (in my mind).
Still, the process is good. I know I can’t afford a new vehicle and a boat and a vacation and a back fence and tickets to a concert and eating out several times a week. There needs to be priorities, choices, and compromise.
I struggle with ‘the jones’ syndrome. How are all of my neighbours doing all the stuff they are doing and claiming they are ‘not in debt’ either. I always feel like the one who has mismanaged my money because they can ‘afford’ it and I know I can’t.
March 9, 2009 at 11:54 am
Gail – this is exactly what I needed to hear today.
I have been spending more time “planning” than “doing” with budgeting and I know that I am doing ok right now, but I have been slowly leeching from my savings, and that just-in-time habit will catch up with me shortly, especially given the expenses that will be coming in the next 2 years.
March 9, 2009 at 12:01 pm
Dear Mickmack,
You’re not alone with “the jones” syndrome. That was my biggest problem. After experiencing a few “life lessons” I finally accepted that keeping with the Jones’ wasn’t worth it. While I don’t want to seem presumptuous, I would bet many of the neighbours may be able to make the payments on all the luxuries but if anything hit the fan the tower would come crumbling down pretty quick. You’re doing the right thing.
March 9, 2009 at 12:41 pm
Ah, the Joneses.
I *know* my Joneses don’t make as much income as we. So how, how, how do they pay for that new big house, new furniture and appliances for said big house, those two expensive cars, all those lessons for the children, nights out, weekends away, vacations, spa days…
Charitable me murmers planned spending, years of saving I don’t know about, solid investments, independent wealth perhaps. Spiteful me shrieks hock to the eyeballs. Realistic me just tries to hang out with the Smiths instead
March 9, 2009 at 12:48 pm
Mickmack:
Maybe you have a different definition of ‘not in debt’. For some people being able to pay the minimum on a CC means not in debt. For some it’s having one penny of net worth (so everything is secured as collateral). I don’t know how many definitions there are… maybe Gail has some juicy ones…
March 9, 2009 at 1:12 pm
Hanging out with the Smith’s – love that!
And yes, I also know approximate incomes of my Jones’s too, that is part of what makes it so frustrating. They also would know our approximate income, so having to say ‘no we can’t afford that’ makes me uncomfortable and feel like a loser. Until I look at my spreadsheets. Then I see how far I have come. Some goals become affordable. I think I need to meet some Smiths
Interesting, the different definition theory. I’ll have to think on that one.
March 9, 2009 at 1:57 pm
I used to feel that saying “I can’t afford it” was a bad thing. Interestingly, I recently had a conversation with a friend and she just blurted out “we can’t afford to”. I stopped her and said thanks for saying that–its always uncomfortable to not do something because it just isn’t in the budget, but now I know for a fact we are not the only family living on a budget. We have all of our needs, a few wants and are managing to work our way out of debt. Remembering to compare only your situation to your own can be difficult, but I think its true that no one really knows what the financial picture of anyone else is. I like to think more people are like us: learning to deny temptation.
Although, I saw a company side along the road the other day that said “Shopping makes you feel good.” I laughed and thought they didn’t finish the thought…it makes you feel good until the bill comes in!
March 9, 2009 at 2:01 pm
I just thought that I would post this information which I have on file.
The Debt Cycle
The initial state before the cycle is received is stable, at least in terms of the subsequent reaction on hearing the bad news. Compared with the ups and downs to come, even if there is some variation, this is indeed a stable state.
And then, into the calm of this relative paradise, a bombshell bursts…
SHOCK STAGE: Initial paralysis at hearing the bad news.
DENIAL STAGE: Trying to avoid the inevitable.
ANGER STAGE: Frustrated outpouring of bottled-up emotion.
BARGAINING STAGE: Seeking in vain for a way out.
DEPRESSION STAGE: Final realization of the inevitable.
TESTING STAGE: Seeking realistic solutions.
ACCEPTANCE STAGE: Finally finding the way forward.
The Debt Cycle can be shown as in the chart below, indicating the roller-coaster ride of activity and passivity as the person wriggles and turns in their desperate efforts to avoid the change.
EMOTIONAL RESPONSE:
UP – ACTIVE – Stability
DOWN – PASSIVE – Shock – Immobilization
UP– ACTIVE – Denial
UP – ACTIVE – Anger
DOWN – ACTIVE – Bargaining
DOWN – PASSIVE – Depression
UP – ACTIVE – Testing
UP – ACTIVE – Acceptance
A common problem with the above cycle is that people get stuck in one phase. Thus a person may become stuck in denial, never moving on from the position of not accepting the inevitable future. When it happens, they still keep on denying it. Getting stuck in denial is common in ‘cool’ cultures (such as in Britain, particularly Southern England) where expressing anger is not acceptable. The person may feel that anger, but may then repress it, bottling it up inside.
Likewise, a person may be stuck in permanent anger (which is itself a form of flight from reality) or repeated bargaining. It is more difficult to get stuck in active states than in passivity, and getting stuck in depression is perhaps a more common ailment.
Another trap is that when a person moves on to the next phase, they have not completed an earlier phase and so move backwards in cyclic loops that repeat previous emotion and actions. Thus, for example, a person that finds bargaining not to be working may go back into anger or denial.
Cycling is itself a form of avoidance of the inevitable and going backwards in time may seem to be a way of extending the time before the perceived bad thing happens.
I have changed a few words in this article. This is actually the Kubler-Ross Grief Cycle It was originally designed to explain the emotional cycle of the terminally ill but during their research the doctors discovered that this emotional cycle is applicable to nearly all cases of bad news. And debt is bad news.
We rode this roller coaster while we were trying to clean up our financial mess but didn’t know about this cycle. Wish we had. Understanding always makes things a little easier. Hope this will help others.
March 9, 2009 at 2:10 pm
My denial is my student loans (in the US, I think they’re a bit different). They’re in the best possible shape for debt – consolidated, low fixed interest rate – but it’s still a lot of debt (nearly $30k). I make the minimum/required payments each month. I just keep congratulating myself for not having other debt instead of trying to get my mind around how I could speed up paying those off.
I’m hoping once I stop focusing on my emergency fund (I’m single and no one is going to “bail me out” if I get laid off so I want it to be in good shape) that I’ll be able to wrap my brain around them a bit more.
It’s a little ironic that I’m so focused on how I can make compounding interest work for me (IRA, company 401k plan) that I’m completely ignoring how compounding interest is not working for me at all
March 9, 2009 at 2:14 pm
I’ve found the best way to cure denial is simply get a notebook and write down every penny that’s spent. It’s solved the dinner table question of “where does all our money go?” in its tracks. It’s also good at confronting denial — “we didn’t eat out much last month so we can buy this toy” becomes “wow, we spent how much eating out? We could have bought this toy instead!”. Powerful stuff. Just keep it simple — a notebook on the table works a lot better than an excel sheet that you have to go and boot up and load and type in and save and etc etc
March 9, 2009 at 5:30 pm
If you are looking for a tool to get you out of denial, look at the numbers.
Are you comfortable using formulas in Excel? Try these to calculate what your credit card is costing you by paying it of in 2 vs. 4 years, or other similar formulas:
http://office.microsoft.com/en-us/excel/HA010562861033.aspx
March 9, 2009 at 6:29 pm
Speaking of taxes and the tax man cometh, there was a notice/article in our local paper on Saturday that contained the names of 5-6 people who were convicted of not filing their returns. Most were for personal returns, but one individual was charged for not filing personal and business returns. Always file your return on time. April 30th for non-self employed, and I believe June 15th for self-employed. The later, if you owe money, and amount owing unpaid accumulates interest from April 30th. Remember, filing your return impacts your ability to get credits: tuition and textbooks, student loan interest, child care, medical expense, public transportation, CCTB (Canada Child Tax Benefit) and GST.
March 9, 2009 at 7:36 pm
Gail, Thanks for hitting the nail on the head again!
Over the last weeks I have been in denial in a HUGE way about our finances. My biggest problem is spending like I have the same income of previous years, when in fact, it has been drastically reduced. I am self-employed, and have lost alot of business for several reasons.
From watching your show, I have been given a big wake up call, and have become aware of what’s happening to our money. We have cut back in many, many ways, but I think the debt monster has caught up to us.
I didn’t want to go to anyone for help, saying I could do it on my own. (Denial again!)Guess what? I was WRONG! If something doesn’t give, we will be forced into bankruptcy very soon. In fact, it may be too late, although I am doing the very thing that I never wanted to do-get a job in a corporate setting. My first interview was this morning, and hopefully will be bringing in a regular weekly income within a month. Not my first choice, but at least it’s MY choice.
Talking about it has been a good step for me. The ladies in our city’s Gail Club were sympathetic, and offered helpful solutions. If I’ve missed the boat, and must file bankruptcy, I can honestly say that I’ve learned my lesson, and will do better. If I haven’t missed it, and don’t have to file bankruptcy, it will be awhile beofre I can climb out of the hole that I’m in, but at least I know how now. Smartly, with Gail’s help.
Again, Thanks for your candidness Gail. Your fans love you!
March 9, 2009 at 8:01 pm
April W – best of luck to you!
Corporate may seem a little soul-sucking when coming from a small business experience, but there are a lot of perks you can take advantage of and you can think of it as networking for when/if you go back to self-employment.
March 10, 2009 at 5:35 am
DH and I were in denial until a couple of weeks ago as well. Well, I was in denial, he was just not ‘in the know’ because of how we have our payments structured. He does mortgage and taxes, I do everything else. So when we sat down to look at the numbers one evening when I, like you April W., had to contemplate giving up the contracting world to become a full-time employee, it was eye opening for him and a huge relief for me. I never knew where my $$ went, nor did he, but there it was. A high end budget on medium in pay does not a ‘rich’ household make.
We have been really open and good with our spending now on groceries and such, so I am thankful for that experience. I still have some cc. debt he doesn’t know I have, but I can take care of that myself so I don’t really think it’s a big deal to not share all the details. Maybe it is to some, but it was created during our ‘dark ages’ and I am looking forward to coming to the end of that tunnel on my own steam. It’s going to feel sooo good to know I dug the hole myself and for this one I climbed out myself as well, as most grown-ups should get to feel at least once in their lifetimes!
March 10, 2009 at 1:48 pm
Excellent information yet again Gail! You are the Pied Piper that we all follow. I’ve been dancing to your tune since the Fall.
On the whole I think I’m doing fairly well, but, just wish I had started sooner. After reading the messages here I’d say everyone has a pretty good handle on their particular situation and have good intentions for correcting it. That terrific!
March 10, 2009 at 10:05 pm
A year ago I had a serious case of the Denial Monkey. I hadn’t opened a bank/cc statement in I don’t know when; if I don’t know the exact situation it wouldn’t seem so bad!
A year on, things are much better and 5.5 months from debt-free day. Instead of saying “I can’t afford it”, I say “it’s not in my budget”. I find it lifts any pressure I – or others – might put on me to spend. And makes me feel like I’m in control, a feeling I haven’t had in a while.
March 11, 2009 at 3:54 pm
Hi Gail,
I find that with the economony today that many people are finding themselves a paycheck away from trouble.
I will be interested to see what happens when all the EI runs out.
I too have my own business but suppliment it with a low paying community care job. Recently, Ive become divorced…another financial blow. So I took the initative to get a better job. Unfortunatly at 43, my skills are now obsolt and need to be upgraded. So back to school Igo.
My spouse and I had three houses, all mortgaged to the hilt because for the last 2 years he refused to work. After a deadline out he went right into another womans arms to support him…he is still not working.
Last summer however, I got tired of the living off cc and decided to go to credit couselling and consuldated all the bills into one. It was a wopping 20,000-.00. I received it at 0% as long as I didnt get anymore credit. Since then its down to 17,000.00 but my debt repayment plan is at 28%.
This was calculated before he left and based on the income with the rentals that we had. I kept the cottage with two cabins to rent seasonallyl, he kept the in town house, with boarders, and We are selling the duplex. In this market we will be lucky if we get out without oweing anything.
Thus I have created the next greatest novel, the divorce diet, too upset to eat, or when you can eat you can only afford cabbage. That give anew reality check to the denial people. Please dont let this happen to you!
March 13, 2009 at 10:07 pm
Watching everyone around you making all kinds of purchases and living a certain lifestyle made me feel as though that was what I was supposed to do as well.
I was never taught one thing about money. My parents didn’t think it was appropriate to talk about money. So I went out into the world and now have a ton of debt. I don’t think that I have denial, but definitely am so much more informed because of this site. Thank you, thank you, thank you Gail and everyone else for helping me to finally get those life skills that I should have had years ago.
Now I look forward to using all of the skills that I am now learning about money and teaching my own children as they grow up.
March 14, 2009 at 5:43 pm
Thanks to coming out of denial, I will be free from a $1000/month loan payment May 1st! I just did the excel math and with throwing an extra $500 this month and next, it’s gone! $45000 GONE! I am so excited I had to share.
This site has been a godsend to me, and with my recent consolidation to one FINAL credit card balance, I’m going to see THAT gone sooner too! Finally, I’ll be richer than I think and I’ll actually have about $2000 in saving and almost $10000 in RRSPs thanks to saving and paying down debt instead of just paying down debt as I had been without having any savings at all.
Sorry, I know it’s probably not the right thread, but I’m over the moon with joy this very minute! Thank you Gail, thank you everyone, thank you Microsoft Excel!
March 14, 2009 at 7:42 pm
Michelle: Congratulations!
March 15, 2009 at 11:17 am
Way to go Michele! Congratulations!
When I grow up, I want to be just like you!