Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I second someone's post about taking a credit line on your home to pay the cc debt instead of depleting altogether your savings. Much lower interest rate than what you are paying on the cc.
Except that if they have a big emergency, like a significant health problem, and they can't work then there is the possibility of a foreclosure in a worst case scenario.
I would not borrow any money that is secured by your paid-off home OP. You never know what the future will hold.
It sounds like you have an impulsive, self-control issue - not really a debt or spending problem. While you can set-up artificial barriers (keep CC's inaccessible, spending barriers, etc), you must ultimately change the root problem. That will likely require professional counseling to help you better understand your self-destructive behavior.
Has this only been a problem since retirement ... or something you have battled over the years? If the former, getting to the root will likely be easier. In either case, nobody can make you stop, as long as you remain unwilling to do so.
In most cases, compulsive, self-destructive behaviors reveal an underlying spiritual problem, which needs to be spiritually addressed - A number of relatively successful programs are available in local churches of many communities (ie; 'Celebrate Recovery').
Otherwise, trying to 'fix yourself' through your own non-existent will-power, is like trying to force your right arm into submission by the power of your left arm.
So this is embarrassing but I am posting here for advice, not judgement as I already have done more than enough of that on myself.
I retired April, 2017 with a paid off mortgage and over $30k in cash savings, no debt other than a car payment and a 401K account. Apparently and much to my surprise, I have no impulse control Although I have an adequate pension, I am over $15k in credit card debt I still have my 401K, my home is still paid off but I HAVE about $15K in CC debt.
This has been spent on trips, buying new furniture, and other stuff that were WANTS not needs. So the $30k cash I had is now down to $10K because I kept trying to pay off the things I was buying, not wanting to have too much debt. But, I AM STILL IN DEBT.
Currently, I am planning on going back to work part time, per diem in my field and have had some very promising interviews so I am not concerned about obtaining work, if needed I could go back to work full time but at this point I prefer to try to work PT and try to pay down the debt.
I would like feedback from fellow members of the CD forum if they have ever done such a stupid thing and if so, how they managed to get back on track?
I am SO very disappointed in myself as I had been so proud that at retirement we had no debt whatsoever and a paid off home and now not only are we $15K in debt but have spent down about $20K in savings paying off debt we accrued !
Thanks in advance for any advice.
OP, people get back on track exactly the way you're doing it; by going back to work, if they can, or finding alternative sources of income (turning part of their house into a rental, for ex.), and paying down the debt. You mention cash savings; I assume you also have investments that generate income? You'll need money for your home maintenance: new roof every 15 yrs., new exterior paint job, to name the big-ticket items, property tax (if your state has it).
Not sure why you went bonkers buying stuff/spending, upon retiring. Unless you're very well set, which it doesn't sound like you are, the concept of retirement isn't about travel, new stuff, dining out a lot, etc. For many people, retirement means battening down the economic hatches, and being judicious in one's spending. Setting up a budget, to figure out how much travel, and what level of travel, you can afford, how many occasional weekend getaways, or whatever. You may have been tuning into the wrong channel, if you thought retirement was about partying (figuratively speaking). It's not Lifestyles Of The Rich And Famous.
Live and learn. Get your debt paid off, then try again, with your newly-gained wisdom. You'll probably do fine.
P.S. One thing people do, is pay off their car before retirement, OR trade it in for a reliable used model they can pay cash for, and stick to used cars in the future. Don't do anything that causes you to throw money down the drain of interest on loans. I just bought a nifty used Honda that will last me at least 15 years, for a little over $3000. It's doable. My mechanic checked it out & everything. Gotta love those used Hondas & Toyotas! They'll go to 240K miles, at least, without needing any major repairs/new parts.
We all mess up one way or the other, so please forgive yourself. It's a real waste of time beating yourself up.
So, now you know what you are facing, you've come to grips with what caused it and you are thinking of ways to correct the problem.
I've had an over $20,000 debt. Mine was caused by losing a job, being out of work for a long time, working at $7/ hour jobs (sometimes less), and trying to pay rent, car payment, buy food. Also some surgeries my insurance didn't cover entirely. I saw the debt growing and kept thinking I could "pay it off." I went like that for about 20+ years.
One day I woke up to my reality. I would never be able to pay it off. For a few years friends would say go bankrupt but I just couldn't do it, felt too guilty. The debt was mine. But I wasn't able to pay it off.
I went bankrupt a year ago. What a relief. I no longer have a credit card and don't want one. Anything I need or want waits till I can cover it with my income.
I sleep a lot better these days.
I admire your attitude towards bankruptcy and respect that it was a last resort type of decision. I know a couple who overspent for years knowing they would eventually claim bankruptcy. Towards the end their lawyer ‘advised’ them to just charge as much as they could since the debt would be wiped out. They followed his advise. Not the most ethical people I have known.
Are you bored? Boredom can wreak havoc with finances.
That's what I'm thinking.
Do you think you were shopping to fulfill the need for human interaction you used to fulfill with work? I get the impression you have been shopping a lot more than you did previously.
I second someone's post about taking a credit line on your home to pay the cc debt instead of depleting altogether your savings. Much lower interest rate than what you are paying on the cc.
No offense, but borrowing money to turn unsecured debt (credit card) into secured debt is about the stupidest thing that someone could do. Especially when the asset used to secure the debt would be the person's house.
Quote:
Originally Posted by Rowan123
Except that if they have a big emergency, like a significant health problem, and they can't work then there is the possibility of a foreclosure in a worst case scenario.
I would not borrow any money that is secured by your paid-off home OP. You never know what the future will hold.
No offense, but borrowing money to turn unsecured debt (credit card) into secured debt is about the stupidest thing that someone could do. Especially when the asset used to secure the debt would be the person's house.
I second someone's post about taking a credit line on your home to pay the cc debt instead of depleting altogether your savings. Much lower interest rate than what you are paying on the cc.
I'd get a no-interest credit card and transfer the balance. Or take out a low-interest personal loan and pay it off early, whatever comes with the lowest costs. The interest just kills you with credit cards.
OP, maybe you should check in with a therapist of some kind? I say this because I'm not of retirement age but can be a compulsive spender. I know when my spending spikes there are things I need to work on.
In general, when I'm out and about, I ask myself "Do I really NEED this? Will it meaningfully improve my life?"
I spent $1200 on a sofa set recently and don't regret it - it has meaningfully improved my life. I use it ALL THE TIME. But I researched the heck out of my purchase.
I've made a list of ways to cut down on my spending too. A journal could help you also if you're keeping track.
These days, I go to the library first when I want a new book. I shop according to a list and planned meals and keep a lid on my spontaneous restaurant spending.
A bullet journal may be helpful for keeping a lid on things. Just don't go crazy spending on art supplies.
But DO NOT beat yourself up. You had a major life change and that can really throw people off. Just be glad you recognized it and got yourself back on track.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Although I have an adequate pension, I am over $15k in credit card debt
I still have my 401K, my home is still paid off but I HAVE about $15K in CC debt.
