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Where we have the problems and you give the advice
Q. Growing up, I saw my parents—immigrants from the Dominican Republic who barely spoke English—drown in a sea of debt. They didn’t know how to handle their finances. I am terrified of ending up that way. BUT: I love shopping, traveling and having a good time. How do I stop myself from going on these binges?
A.It sounds like we had similar upbringings. My mom raised me as a single parent, and worked hard for all we had. Unfortunately, the lack of financial support took its toll on her finances, and eventually my own. For more than a decade after I graduated high school, I also struggled with overspending and debt. But finally an idea clicked: I began converting expenditures to the number of hours I had to work to pay for them. Calculate your real hourly wage (including not just work hours, but time to commute, time to get ready for work, etc.). Each time you feel the urge to go on a "binge," ask yourself if a shopping spree is really worth 16 hours of work. Chances are, the very idea of working two days to offset new additions to your wardrobe will convince you to avoid the store. Having said that, it's a good idea to stop and smell the roses from time to time. Make room in your budget for small splurges, and save up cash for the big ones. Just whatever you do, don't turn to credit cards to finance your indulgences.
—Jason White, Founder and Editor, FrugalDad.com
I used to be the same way; I was always broke and anxious. Then I found a way to find out where each penny was going. If I couldn't afford something, I’d save up money so I could buy it later, instead of buying it with a credit card and paying the minimum. I went from a really low credit score to a high one 3 years later. It's difficult at the beginning, but it’s worth it in the end.
—Monica Arevalo, Huntington, Long Island
If your parents didn't serve as an example, let the economy do it for you: You need to have money put away for that "rainy day" because you never know . No reason you can't save money and still able to reward yourself. Look into a part-time job if your schedule allows it; take a money management class; don't live out of your means. And don’t be one of those who try to look like a million bucks even though they only have a buck to their name. These lessons start at home; hopefully it’s not to late for you to change your game plan.
—Ricardo Alexander Morales-Brigante, Queens, New York
Here's my dos centavos: Embrace the terror! The truth is that you should be scared--people who don't track their money and live within their means end up just like your parents and worse. It also sounds like you're using your spending to make yourself feel better--to raise your self-esteem. Ask yourself: What do I really value? What do I really want in life? Stability and security? If so, use that desire to stop the cycle of debt and rein in your spending. Sign up online to join a community that can help you stay on track, such as the one at DailyWorth.com. Sign up to receive text or email alerts when you spend too much or take out too much cash. Sign up for automated savings so you don't even see the money that you're socking away. With a money plan, you can live your life with ease, not fear!
—Carmen Wong Ulrich, finance expert and author of "The Real Cost of Living"
Next week’s problem:
In my circle of friends, I’m probably the most outgoing. Nevertheless, I have a lot going on right now and my career is first priority. A childhood friend is upset with me because I’m “too busy for her.” Frankly, I find it so disrespectful coming from someone who still lives with her parents and doesn’t have my responsibilities. How should I tackle this?