Chapter 12 The Fences and Budgets

One of my favorite things to do in the morning before my kids wake up is to sit at the kitchen table, drink my coffee, and read my Bible. One particular morning at 6:00 a.m., I was staring out the window enjoying the view of the birds eating at my bird feeder. I remember thinking how beautiful they were, when there was a loud thump as something big and heavy hit the window. The window shook and I went outside to see what had happened. A beautiful red-bellied robin had flown directly into my window and died. As I picked it up and placed it in a shoe box, I thought about this bird. I wondered what had happened that had led up to its fatal accident with my kitchen window.

I imagined that the bird saw all of its friends at the feeder and thought, “Hey, look at them, they look like they’ve got something fun going on.” And as he flew by he lost track of where he was going and flew into the window.

Was the bird wrong for wanting to see what everyone else was doing? No, he was just curious and wanted to feel a part of the group.

As Spenders we are like that bird. We like to spend because it’s fun and necessary, just like flying is for a bird. Shopping is a fun activity to do with your kids or with your friends. You need to shop for groceries and toiletries, your kids need underwear, and you need laundry detergent. Spending is just as necessary to our life as flying is to a bird. If one bad habit develops about spending money, however, you may have a financial catastrophe coming your way. Just like the bird who didn’t see the window in front of it, you won’t see your financial crash until it’s too late.

When I was spending money with abandon for years, there were times I would try to stop. Mark and I would make a budget together as we sat down and talked about saving for our future and paying off the enormous amount of debt we were in. But when I actually got out in the real world, I failed miserably. Just like the bird who lost control, I would lose control of myself by making just one financial mistake.

It didn’t just start when I was married, though. Mark had married a person with a shopping addiction, but I don’t think he knew how far gone I was.

Even though I was the second of four children, I had a typical firstborn personality. I am an all-or-nothing person. I either do something all the way and am an overachiever and perfectionist, or I throw up my hands when things get too hard and give up.

The thrill of spending money caught me at an early age, but what I didn’t see when I was growing up is that many of my behaviors were big red flags to an addiction. I am very impulsive, and I rarely learn from my mistakes. I get into things all the way and don’t often foresee the consequences. I would spend money on things that I didn’t need to fill a hole that I didn’t know was there. I had a constant need for more clothing and things and felt better when I got them.

Looking back at that time in my life now as a Recovering Spender, I see that I was addicted to spending. As someone who loved to spend money frivolously, I really wrestled with the idea of setting a budget. It just seemed way too strict.

A BUDGET FOR A SPENDER CAN BE COMPARED TO INPATIENT TREATMENT FOR A DRUG ADDICT

A budget puts a Spender’s money in a treatment program of some sort.

My husband, Mark, is an actuary, which means he loves numbers, calculations, and spreadsheets. When we first got married, he would call me over to the computer to show me an awesome formula he had come up with to calculate a mortality table he needed for work. I would commend him on a job well done and walk away overwhelmed and confused.

I would rather stick a pencil in my eye than look at a spreadsheet. They make me break out in a cold sweat. If you are a Spender, I bet you are giggling to yourself right now because you feel the exact same way.

Despite Mark’s math major and spreadsheet skills, I was the one who took charge of our finances when we were first married. My mom was always the one who took care of our money when I was growing up, so I thought that was my job as a wife.

I remember walking in on her while she was paying the bills one day. She always wrote her budget in a large eight-by-ten leather-bound journal. She would sit in the dining room surrounded by bills, writing down all of the numbers and adding them up to make sure they were correct. There were many occasions where she would show me the numbers and how they were not adding up, then give me the proverbial “money doesn’t grow on trees” speech that all parents are obligated to give at least once in their lifetime.

My parents paid for their first nice house in cash from the sale of another house that they had rehabbed when they were first married. They later built a larger house, which drastically changed their month-to-month budget. With four kids, ballet lessons, inpatient drug treatments for my brother, and my two sisters who liked to ski and do gymnastics, their budget had gotten very tight. There were many months where my mom would have only $50.00 for groceries, but she always found a way to make it work. She wasn’t one to complain much, and did her best to provide a calm and welcoming home.

When we were married at twenty-one, I thought it was my responsibility to take care of our money because it was what my mom had done. It wasn’t a conversation we ever had, it just happened. I took over and Mark didn’t say anything. Ignore the fact that the year prior to our getting married, I was in $5,000 worth of credit card debt as a sophomore in college. Thankfully, I was rescued by my grandpa Roberts, who paid off the bills shortly before I left school that year. But once again I didn’t have to take responsibility for my mistakes.

I should never have been the one to handle our money, but Mark didn’t know any better because we had never really talked about money prior to getting married. Had he known my spending history, it might have been a different story.

I sat in our tiny two-bedroom apartment as a newlywed, with my new eight-by-ten leather-bound notebook, the exact same kind my mother had used, and started writing down what we were spending. I would take a look at our bank statement, make categories, and place our transactions under those categories. The first month we were married we spent $1,000 at Walmart! I should tell you that we were living off of our wedding-gift money, student loans, and Mark’s $100-a-week tutoring job.

That was the first time I actually thought about budgeting. I didn’t want to spend all of our income at Walmart, but I didn’t really know how to go about starting to budget. As a Spender, a budget sounded like prison. I decided I wouldn’t budget yet, but really just track how much we were spending, and if something got out of control we would stop spending money on that.

Years and years of uncontrolled spending was the result. I continued to be in charge of our finances, because that is what you are supposed to do as a wife (or so I thought). I would take out my eight-by-ten leather-bound notebook and write down where our money was going. And it continued to fly out of our hands faster than we could make it. As I wrote on the neat lined paper, I realized I had no idea what I was doing. I knew I wasn’t good at keeping track of our money; on the other hand, I knew I was very good at spending it.

I never knew how much was in our bank account, because I never balanced our checkbook and online banking wasn’t available for our bank yet. I would write checks and forget about them, they would bounce, and I would be $35 poorer due to returned-check fees.

I didn’t set a budget, but only wrote down what I spent, so there was no plan on where our money was going every month. I just hoped and prayed that my debit card or credit card would get accepted when I swiped it. The only time I would actually think about our money was when the monthly bill came or when I happened to find myself in the bank to make a deposit and did a balance check on the account.

Fast-forward five years, and there I was sitting on our bed with more than $40,000 worth of debt—$42,000, to be exact—credit card bills spread out around me. I had just come clean to Mark and told him about the mess that I had gotten us into.

The debt broke down in this way:

Thankfully, our school loans were only $12,000. Mark never took a loan out because he had a full scholarship, but I did take one to get through my junior year of college My parents offered to pay, but at that point I wanted to be independent and pay my own way. I got a full scholarship to finish up my senior year due to the fact that I was now married and unemployed.

The $8,000 in car loans was left over from the Audi purchase. The credit card bills were all my fault. I had purchased furniture, a swing set, and so much clothing, and if we couldn’t afford groceries that week they also went on the credit card. I would promise myself to pay it off in full the next month, but month after month I continued to ignore the issue. Since Mark didn’t help with the finances, it was very easy for me to hide the money I had spent, but he must have realized I was spending some money, because we suddenly had more “stuff” in our home. He never asked, and I never told.

Not only did we have a lot of debt, but our brand-new house was built in 2006 right before the housing market crash. We paid $225,000 for the house in October 2006, and five months later it was only worth $190,000. To top it all off, we made $1,000 less than what we needed to pay for the basic necessities plus making all of our payments on time. Even if we had wanted to sell our house to get out of that huge mortgage we were under, we wouldn’t be able to cover the $35,000 loss we would have to pay the bank to release the loan for it. We were completely stuck, with no way out.

I still had my eight-by-ten leather-bound notebook, and inside it were the dates of bounced checks, late fees, and credit card bills for which we were barely paying off the monthly interest.

If Mark had been in charge of our finances, would he have gotten us into this mess? My guess is probably not. He would have been able to stop it from happening. After all, he was the person who had paid cash for his wreck of a car in college and never used credit cards until he met me.

I found myself looking back to those years of shoplifting as a teenager. Was I doing the same exact thing, but just using a credit card instead of stealing? I started to see that my behavior as an adult mimicked my behavior as a teen.

IS SPENDING MONEY ON A CREDIT CARD WITH NO INTENTION OF PAYING IT BACK ANYTIME SOON THE SAME THING AS THEFT?

I was going shopping, and purchasing things with no idea how I would eventually pay for them. Theft is taking something without paying for it; buying something on a credit card when you are dead broke is taking something when you have no idea how to pay it back.

There I sat, drowning in credit card debt, unable to pay for groceries or our monthly bills, and wondering how we would ever get out of this mess. I felt the same sting of guilt that I felt when my mom caught me shoplifting at fourteen, but this was even more devastating. I felt the same sweat on my brow as I had twelve years before standing in front of her. Except now I was standing in front of my husband, madly in love, and completely responsible for devastating our family finances. I was afraid he would leave me and I would be alone, stuck with my maxed-out credit cards. Thankfully, he didn’t leave me, and he forgave me, which allowed me to move on and begin my recovery.

In the following chapters of this book, I will walk you through what it takes to become a Recovering Spender. Just as a recovering alcoholic shouldn’t walk into a bar with a $10 bill, a Recovering Spender shouldn’t walk into a mall with a credit card. There are certain boundaries that you will have to set up for yourself. It won’t be easy, but you can do it. I know, because I did.

You’ll have to learn how to budget and actually stick to it, which may seem like the absolute worst thing in the world. But I’ll let you in on a little secret. Budgeting is actually a Spender’s best-kept secret and best friend. Let me explain in more detail while you pick up your chin from the ground.

As a mom of four young children, I have certain boundaries for them. One of my favorite physical boundaries is the fence around our backyard. I love it because I can let them outside and they can play and be safe. I don’t have to worry about them running into traffic. It is a place where I feel comfortable letting them have the freedom to roam and explore. They also feel safe because they know where they can go and what the boundaries are. The fence is there for both them and me, and the promise of safety is what makes it work.

A budget for a Spender is similar to a fenced-in backyard for my kids. It is meant for safety, not for the strangulation of creativity and fun. It is meant to give us freedom, up to a point. Think of your newly created budget as a fence around your money. The fence gives you the boundaries as to how you can spend your money. It doesn’t say you can’t have fun or can’t spend, which is how you think it will feel. The budget fence says, “Here is how you can spend your money. Learn how to have fun within this fence.”

When I first started learning how to budget, I did feel as if my freedom had been taken away from me. After budgeting for a few months, I realized that I spent money without thinking about it. I also realized that I spent money on some pretty stupid things. Once I purchased a pink plastic mirror (with a stool) for my daughters. It sang, “Mirror, mirror on the wall,” and after walking by it five times in one day and hearing it play the song over and over, I realized it was a mistake. Just one day with that jeweled and sparkly pink mirror in my house and it drove me crazy. The point was that I hadn’t thought about the purchase, I had just thought three princess-obsessed daughters would love it. I came home two days later to find it thrown on the side of the road by my more practical and non-princess-obsessed husband, who couldn’t stand hearing that song one more time.

It took me a good six months to be able to stick to a budget and not overspend. There were many months of incurred overdraft fees thanks to my lack of planning and inability to say no. Before the beginning of every month we would sit down to talk about our budget and break down our expenses. At this time, Mark’s take-home pay was $4,000 per month after 401(k) contributions and health care deductions. This was an annual salary of $70,000 per year. At that time here is what the breakdown looked like:

Mortgage payment (what we paid for our mortgage plus property taxes)—$1,700 per month.

Groceries—$200 per month. (We got this down from $1,000 per month.)

Miscellaneous money (this was money budgeting for unplanned expenses)—$50 per month.

Gift money (we would set aside money every month for gifts, so that I could look for good deals all year long)—$25 per month.

Utilities (gas and electric)—$150 per month.

Water bill—$100 per month.

Life insurance—$25 per month.

Car insurance—$150 per month.

Tithing to our church—$400 per month.

Car payments—$440 per month.

Clothing (we didn’t have any money to go shopping)—$0 per month.

Gas—$150 per month.

Student loan payment—$108 per month.

Train pass for Mark to get to work—$60 per month.

Eating out (this was cut totally out)—$0 per month.

Cell phones (we had cheap flip phones)—$80 per month.

Internet—$45 per month. (We split the bill with our neighbors, because since we lived so close together we were both able to use our service.)

Cable (we had basic cable, and would rent DVDs from the library for free)—$10 per month.

Medicine/medical (co-pays and medicine)—$100 per month.

In total, after all of our expenses were added up, we had $3,793 in bills per month. Add in the credit card minimum payments at $500 per month and we were over budget by $293 per month.

In order to make ends meet, we had to rent out one of the bedrooms in our house at $300 per month. After receiving that rent payment each month we were left with $7 (if we were lucky and stayed on budget). Every single month I had to face the reality that I had a $7 margin of error. If I kept lights on for too long, or put too much gas in the car, I would go over budget. If I went over budget, that meant less food on the table or skipping a credit card payment. There was literally no room for mistakes, and we prayed daily against emergencies and surprise expenses.

Once we finished talking about our budget and had figured out where to allocate our money for the month, we would take cash out of our checking account and divvy it up. When I first started budgeting this way I would use my debit card anyway, ignoring the budget. Mark would have already allocated all of our money for bills, so we would overdraw. Month after month I kept on screwing up the budget. I would get discouraged and think to myself, “Am I ever going to be able to do this?” There were many months of self-doubt, discouragement, and mistakes. But then, finally, it all clicked. Practice makes perfect, they say, and in this case it did. Month after month, I continued to screw up the budget, but month after month I also got a little better. I was trying really hard and kept on reminding myself to “stay within the fence.”

A Spender needs a few months to learn the ropes of budgeting, so it is imperative to be on the same page with your significant other so he can help you through this process. You will be in a kind of withdrawal from the high of spending money. Like an addict, you need a few months to get through that process. Find something else that relaxes you instead; take up yoga or read a book whenever you feel the need to shop.

What I found with budgeting was the opposite of what I thought I would find. Budgeting actually helped me achieve true freedom with my money. Once you start, you will easily begin to see where you failed to draw the line and what your triggers are.

Imagine knowing exactly how much money you have for everything an entire month ahead of time. Now imagine knowing that when you go shopping you don’t have to feel guilty, but can actually have fun. Just because you have a budget (that fence) around your money doesn’t mean you can’t have fun. It just means you tell yourself where you are going to have fun and what it is going to cost you. You can take control of your money instead of your money taking control of you.

The budget fence is there for your protection, not to harm you. It is meant to tell you how to spend your money in a safe and productive way, not to tell you not to do anything fun. There are times when you will jump over the fence or go through the gate trying to escape, but as a Spender there is danger on the other side. There may be a group outing to a mall that you tag along with. There may be a brand-new Michael Kors bag on clearance for only $200 (this example is from my own experience). There may be a once-a-year clothing sale at your favorite store. There will always be something waiting to be bought on the other side of that fence, but if you stay within your budget fence you are safe. Leave the fence without accountability and you are running into a busy highway and are about to get hurt.

You will have to learn how to set up an accountability partner, use cash, limit online shopping, and change your values and mind-set about money. But all of those changes are so much better than living the rest of your life in bondage to your spending habits. I can tell you that is no way to live.

So, how does one who is a spending addict get help without going to counseling for life? I never did attend a support group, because I felt that I had such great support at home. If I hadn’t had that support, I would have gladly attended. In the next chapters, I will walk you through how I did it. I will never be a normal spender. As a Recovering Spender, I have to live a life with boundaries. Those boundaries give me a great sense of freedom, and I can’t wait to share why!

The past eight years have been a journey for me, from spending addict to Recovering Spender, while working my way to now being debt-free. I learned how to be accountable and set reasonable boundaries, and in the past five years I have taught this message to more than 14 million women through my website, laurengreutman.com. The strategies I have developed to help put myself in a place of recovery are life-changing. Living a life enslaved to the money you spend every day is no fun. You may love the fun of spending and getting new things, but the guilt afterward is too much to handle forever.

In the chapters that follow, you will learn exactly how I was able to stop spending, get us out of more than $40,000 of debt, and live a life filled with financial freedom. Yes, I still have the urge to shop, but I don’t go outside of the fence. The fence is my safe place, and I hope to help you build your fence as well.

When in doubt, feel free to borrow my mantra: “Stay within the fence!”