I like to think of my emotional bank and my credit card similarly; if I don’t pay off my credit card when I make a purchase, I end up paying interest on my purchases. I will admit, I have a fear that my credit card will get to a balance that I can’t pay off. It isn’t a mortgage which is (hopefully) an investment, and there is no equity. It is simply a symbol of money I spent, usually on things I could go without. It isn’t that I judge my spending on my credit card, I don’t. There are many benefits to having a credit card. But by paying it off regularly, I know I am always in control.
When talking recently, to a friend about debt he was shocked when I told him that I pay my credit card off within days of using it. My friend explained the financial benefits of keeping my money in an interest bearing account until my credit card bill was actually due as really, all that happens is the bank earns interest on my money instead of me. While I know he is 100% right, my fear of letting my credit card debt accumulate has not yet swayed me from my little practice.
This fear didn’t come from nowhere. When I was 18 I was pre-approved for a credit card without ever having applied for one. When the offer came in the mail, I thought it would be fun and exciting and I really liked the idea of having another card in my wallet and of accumulating frequent flyer miles. I looked at how much credit I had available and it was a lot of money.
About 2 months after I first got my card, I got my first credit card statement. I was absolutely not living within my college-student-babysitting-once-a-week means! I paid a bit off but I didn’t fully understand the impact yet. I continued to focus on how much money I had available to spend, not on how much money I had actually spent.
18 months later my card was maxed out and, every month, I was paying off interest which was about 50% of my still, college-student-babysit-once-a-week salary. I sat down and realized that at the rate I was going, it would take me 25 years to pay it off.
Now, looking back it was not a huge amount of money. It was a lot for a university student but I would have been able to clear it when I got my first job out of college with my first paycheck. But by that time, the interest I would have paid on it would have stopped me from doing a lot of other things.
I realized I was not in control of my finances and I panicked. When I finally went to my mum and told her of my predicament, she sat down with me and we had a long chat about spending. She took my statement, we went to the bank together and she paid it off before I permanently closed my credit card account. We then agreed that I would pay her back over a year until I had repaid her. If you know my Mum, you know what a generous and kind woman she is. It would have been very easy for her to just pay it off and I am sure on some level that was probably what she wanted to do. Luckily for me, my Mum is also very wise and responsible and I don’t believe I would have the approach to credit cards that I have now if she had simply paid it off and let me continue on my merry, spending-outside-my-means way!
If only our emotional debt could be wiped away as easily as my financial debt was.
I was talking to some clients recently about an adage a mentor of mine said to me one day: ‘Deal now or pay later.’ I repeated this saying to my clients and we began talking about why we need to address our emotions and feelings when they arise. The feelings don’t go away when we don’t address them; in fact they just fester and then come back late. With interest! And the longer you leave them, the longer it takes you to pay off the interest, all without touching the principal amount!
We all have scars. Every single one of us has been hurt in some way. The scars can come from family, teachers, friends, work colleagues, romantic relationships and so on. Not one of us goes through life unscathed. But the longer those wounds sit there without being addressed, the more we cover them up and the longer we stay ‘in debt’.
I like to look at my trusted confidants as part of my emotional income. They help me pay off my emotional debts on a regular basis so that I can avoid paying interest. They do this by listening to me and allowing me space to talk about what is causing me pain, or costing me more than it should. I know from experience that if something hurtful arises and I don’t talk to someone about how I feel, regardless of how vulnerable it makes me, or how silly I think the problem is, the problem will become a lot bigger than it ever was. Other problems will then pile on top of the principal problem and not only will I have to sift through the layers of new problems, I will still have to get back down to the underlying concern. Trust me when I tell you that this takes a lot longer than dealing with it in the first place!
Next time something arises that makes you feel sad or uncomfortable or off kilter, don’t bury it. Find your boyfriend, your wife, you friend, your parent, your therapist, whoever, just someone you trust. Tell that person and allow the principal problem to be paid down by their compassion, love, understanding and companionship. Yes, vulnerability is scary and the worse we think the problem is the more inclined we are to bury it; but the people who care about us want our emotional banks to be healthy and the more you reach out, the more you will find that not only will you avoid paying interest, you’ll actually start saving!