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There’s a lot of mental healthcare workers around here apparently who can determine someone’s problems from a few sentences about them shopping.
I hope that was said in jest.
NO, I speak from EXPERIENCE, sometimes the best teacher.
Also, being a patient of the mental health field, I also have lots of inside info.
And, just HOW do you think a mental health professional actually diagnoses a mental health issue? A few questions and history of the patient and experience! Basically your "few sentences about someone's life" statement.
Remember, many mental illnesses CANNOT be tested for like a heart attack, a stroke, or the flu. Only through "a few sentences about someone's life" can create a diagnosis.
I also said seek some professional help.
It is NOT "ordinary behavior" to excessive spending and buying stuff not needed and filling up closets and rooms with stuff.
Ex: for years I had been treated only for depression, as that was what I complained about. The experts diagnosed me as clinically depressed, because I certainly fit the profile of a depressed individual. After my 3rd suicide attempt, the hospital psychiatrist spent 4.5 hours grilling me about my whole life, how I responded to certain things, how I acted about others. Finally he sat back and said "you're not depressed you're bipolar". Once I began treatment for bipolar, I improved greatly and quickly.
Besides, you don't HAVE to be a mental health worker or patient of the system to clearly see the OP s wife has a serious problem.
And serious problems are driven by something in one's life.
My wife is a shopaholic. She admits it and is in fact rather proud of it. It is her hobby, she enjoys it and it drives me crazy but letting her do it keeps the household sane. She mostly buys sh – excuse me - stuff on sale but there is so much stuff we’re running out of places to store it – actually we make regular trips to the local thrift stores with boxes of the …. Stuff.
We receive a pretty good income every month through our pensions and my little bit of social security but we never seem to get anything saved and have been carrying a rather decent credit card balance. So I made an agreement – we take some money out of our retirement account, pay off the CCs and make a fresh start.
I need to know if I’m overthinking and would be interested in other’s observations.
I’ve looked at all our expenses and have put them into 7 separate ‘pookas’.
1 - Regular Checking Account – Receives funds from our pension and is used for our monthly bills. The stuff we mostly really have to pay to keep the lights on.
2 - Emergency Savings Account – I set up a separate savings account for this. Money is transferred in each month. I computed an ‘Annual Loss Expectancy’ and figured a set amount each month into this account would cover a major car repair, root canal or new refrigerator. Hopefully these are far enough in the future that the balance will build up enough before we need to tap into this account.
3 - Monthly Cash – this is for our groceries and small miscellaneous expenses and is withdrawn weekly. Wife feels and I agree, using cash for groceries is a good system - except when we go to SAMS.
These 3 pookas are our necessaries.
4 - Discretionary Expenses – This money is put in my wife’s debit account and used to cover clothes, ‘stuff’, restaurants, hair and nails, gasoline, minor medical etc. She has access to the account and can see the running balance. With minor exceptions, nothing in here is life or death (except hair and nails) and when it is gone, for the most part it is gone.
5 Entertainment Account – We are using our regular savings account for this – Transfer in a set amount every payday. Used for vacations, show tickets, gifts etc. I’d have dining out coming from this pooka but too difficult to xfer money around. This shouldn’t be tapped too often.
6 – Wife’s allowance – an amount is withdrawn in cash on the first of the month which she can spend however she wishes.
7 – My allowance –my SS goes into an account I have which I can access via debit or ATM. This is mine to spend as I want. Actually a bit more than wife’s allowance but since I don’t have her debit card I’ll be buying my own gas and no doubt other expenses.
Thoughts?
I don't think it's terrible, but you can do simpler. It scares me that you and her are not on the same page? My wife enjoys shopping too, but I don't think she would actually enjoyingly blow up our budget at the sacrifice of me and our kids.
Emergency savings account is a one time thing. Halt all savings/investing/shopping until you reach it. Once you reach it, it's done, it doesn't need to be a part of future discussions unless you need to tap it.
From there, you have your fixed expenses, and your variable ones. Fixed (mortgage, car payment, internet bill) are all the same every month.
But groceries, entertainment, and shopping are all variable. They can be one bucket to give yourself flexibility. Take this budgeted amount out in cash on a weekly basis, divide amongst you and your wife, and tell here that's all she has to spend for food/ent/shopping/clothes.
So example:
Post tax income per mo: 10K
Savings Target: 1K
Fixed expenses: 6K
Variable expenses: 3K (divided as $1,500 for you, $1,500 for her).
So take out $750/week and divide by 2. This way the cash in her pocket is a constant reminder of what she has left to work with. She can make tradeoffs (gotta eat rice tonight cuz we spent too much at TJ Maxx), and you can "gift" her money from your account.
This keeps it simple and flexible. It also empowers her to be a big girl and take accountability for her allotment. It also doesn't restrict her, but allows her to make tradeoffs. NOTE, THIS DOES MEAN THERE WILL BE TIMES WHERE SHE MUST SAY NO TO HERSELF. That's good, it means it's working
Here is an update on my situation which might be helpful for OP or others in the same boat.
Since late august:
We have snowballed nearly all of our remaining small debt except Sears which will be paid off in January and a small car loan which is about $950 left. We still have a loan on my truck, but that is at 5%, so I am not overly concerned about that.
I closed most of our bank accounts. We kept getting charged fees for stuff even though the accounts were supposed to be free. Each pay period i give my wife a handful of envelopes. $25 for her spending money for two weeks. $100 for gas for two weeks. $170 for groceries for two weeks (i try to go the the grocery store with her). $50 to put towards having her friend do some cleaning once in a while. This works much better than transferring money into a bank account and having her use the ATM card. Downside is I cannot see where the money is being spent. Upside is she can clearly see when she is running out of money for something. I write on the envelopes things that are coming up like our son coming to visit in a few weeks so she can try to save some of the spending money or gas money for when he is here. I do the same for myself just to be fair. However I usually put the money form my envelopes in my wallet or into a bank account. This has worked well and we have stayed in our budget.
I found ways to cut costs.
We discontinued insurance on my son;s car (he is at college) and a spare car that is broken and just sits in the driveway until I feel like fixing it. Saved $250 a month.
We cut about $100 a month out of our power/gas bill and about 450 out of our water/trash bill. One thing that helped is we renamed the "rent" our daughter was paying us. We showed her it is really just a portion of her share of utilities. Is has helped make both her and my wife more conscientious about turning off lights, turning down heat, closing doors, shutting off dripping faucets, etc.
I am changing our homeowners insurance carrier. This will save about $195 a month and also result in a much lower deductible ($250 instead of $1000).
One son is just starting to get on his feet financially. Another is in college. We promised college son $100 a month to help with expenses. We are paying one of the other son's student loan payments (my wife co-signed that loan). We were paying $250/month on his student loan. We reduced it to the minimum amount ($192). We also made a deal with the older son that we would continue paying his student loan through the end of the year if he sends his brother $100 a month so we do not have to. In January, we will switch. That saved us $150 now and another $92 starting in January.
We had a big yard sale. We put about 1/3 toward paying off debt and 2/3 in savings.
My credit score jumped from 630ish to 798 according to Credit Karma. that is not an accurate score, but it tells me it jumped way way up.
We have some money saved for car repairs, medical costs, and general savings. Not a lot, but much better than zero.
In budgeting, i forgot that my social security payments max out in November, so now we have some extra money. About $1200 between November and December. We will divide it between paying remaining debt, increasing savings and taking a road trip to see her parents in Texas at Christmas.
I have budgeted every paycheck out through December of next year. I check our bank account twice a day and update our budget as necessary.
We still get occasional surprises. Almost every card we paid off gave us the current pay off rate not incouding accrued interest. I had to find about $2000 to pay off all the renaming accrued interest bits. One credit card we did not close in order to keep our credit rating high had a fee I did not know about ($89/year). I checked all of our other credit cards and closed any that have fees. then a former HELOC that converted to a PLC when we sold our prior house hit us with a $25 fee. I thought that account just went away when I paid it off. I cancelled our VOIP phone at home since we never really use it, but they kept charging us (about $3 a month, but everything counts). Apparently we need to send them back a modem that i did not know we had. Another surprise was my health insurance cost going up in January.
We had to draw on savings a little bit to pay an insurance charge from our lender because our insurance lapsed for four days due to the mess my wife made. Our lender now insists on an escrow for insurance which we cannot afford. I told them if they do not waive it I will refinance. I can probably refinance at the same or a lower rate and a lower payment (but the term of the loan will get bumped out a few years). I can always pay extra later to pay it down faster. the big ouch is the fees and costs, but we may have no choice if they will not waive the escrow.
Every year things will improve considerably.
By the end of March we will have paid off our property taxes and our 2018 income tax balance. By the end of 2020, we should have paid off my truck ($323), but I will keep making payments into a savings account for buying a replacement eventually. By mid/end 2021 we will have paid off my 401K loan from her last run up of debt. That will free up $800 a month. More of our kids will be dropping off our health insurance and eventually off of our cell phone account that will save a bit more. Then we can put extra payments towards the business loan I took out to pay off her current debt ($70,000) and towards fixing up the house so we can sell it.
Oh another surprise. She took out $90,000 student loan for her master's degree. the plus side of that is some government program will pay the balance of it off if we make payments for ten years and she stays in public service jobs (education).
I signed up for Credit Karma in my wife's name (with her permission), I check it every week to make certain no new accounts pop up. That is the best I can do to watch for her going back to old ways.
No matter how bad it looks there is usually a way out.
I got another nice surprise today. Some retirement investment account sent me a notice that I have a balance of $7000. I have no idea where it came from. It must be 401K money from a prior employer, but I do not know who. I have never heard of the investment company. In the scope of retirement funds it is not very significant (works out to $67 a month before taxes when I retire). However it is pretty neat to get a surprise "we owe you $7000" (in about 12 years) rather than you owe me surprise.
That reminds me. I have $80 in a school pension program from 1985ish. I wonder if that grows over time. I might get another $3 from that to round my surprise out to $70 a month.
I agree, you have done a bang-up job. I'm inspired by your example.
Maybe it's time now to find out what triggered your wife to rack up a huge amount of debt not just once, but twice. Whatever it is, it's more than an error of judgment. Could be a disease process or mental illness.
I'm just concerned she'll find a way to do it a third time using means less traceable than credit cards. Please don't be offended but I would lock up anything valuable that could be easily pawned or sold.
My wife is a shopaholic. She admits it and is in fact rather proud of it. It is her hobby, she enjoys it and it drives me crazy but letting her do it keeps the household sane. She mostly buys sh – excuse me - stuff on sale but there is so much stuff we’re running out of places to store it – actually we make regular trips to the local thrift stores with boxes of the …. Stuff.
We receive a pretty good income every month through our pensions and my little bit of social security but we never seem to get anything saved and have been carrying a rather decent credit card balance. So I made an agreement – we take some money out of our retirement account, pay off the CCs and make a fresh start.
I need to know if I’m overthinking...
Probably nothing is gonna change WRT your wife's hobby/addiction until she goes toes up, and it sounds like you two have reached some semblance of an agreement regarding this behavior. So, that leaves the finances of it all.
The only thing I would say to do different is get rid of the CC debt, and make a pact that that she (and you, the two of you together) must not spend a single dime more than you can afford to pay off, in full, at the end of each month. But *do not* take money out of your retirement account to do that now. That's liable to start a new habit. Instead, it's time to cut back now until the CC debt is gone...that'll be good practice for going forward. Adjust one or both of your allowances, cut back on additions to savings for now, eat out less (or cheaper), whatever. Basically, live within your means. That doesn't mean any specific behavior has to stop completely; it just means things *overall* need to be brought back to a sustainable level.
NO, I speak from EXPERIENCE, sometimes the best teacher.
Also, being a patient of the mental health field, I also have lots of inside info.
And, just HOW do you think a mental health professional actually diagnoses a mental health issue? A few questions and history of the patient and experience! Basically your "few sentences about someone's life" statement.
Remember, many mental illnesses CANNOT be tested for like a heart attack, a stroke, or the flu. Only through "a few sentences about someone's life" can create a diagnosis.
I also said seek some professional help.
It is NOT "ordinary behavior" to excessive spending and buying stuff not needed and filling up closets and rooms with stuff.
Ex: for years I had been treated only for depression, as that was what I complained about. The experts diagnosed me as clinically depressed, because I certainly fit the profile of a depressed individual. After my 3rd suicide attempt, the hospital psychiatrist spent 4.5 hours grilling me about my whole life, how I responded to certain things, how I acted about others. Finally he sat back and said "you're not depressed you're bipolar". Once I began treatment for bipolar, I improved greatly and quickly.
Besides, you don't HAVE to be a mental health worker or patient of the system to clearly see the OP s wife has a serious problem.
And serious problems are driven by something in one's life.
Best of luck to you OP, and your wife.
Actually, they meet the patient and do not rely on someone else’s second-hand description of a problem to make a diagnosis. It sounds like she shops a lot, but it does not mean it is a mental illness.
Besides, you don't HAVE to be a mental health worker or patient of the system to clearly see the OP s wife has a serious problem.
Maybe...but the two clues that it's not that serious (to the point of mental illness) are (1) she's willing to donate some of her purchases, and (2) it has not yet gone so far that their finances are being dramatically hurt.
Some people are more "collectors" or "savers" than others (I am not, but I recognize that others are). Some people have other habits or hobbies or past-times that others would find equally annoying as over-shopping, and those can be expensive (even detrimental to one's health, like smoking) but they aren't actual mental illnesses.
[Speaking of which, I *hate* smoking with a passion...my husband teases me that I can smell cigarette smoke from 100 yards away inside our house with all the doors and windows closed. I don't ever hear anyone claiming cigarette smokers are mentally ill, but in my opinion, you gotta be half "crazed" to even want to smoke, and people still do. -- sorry to go off-topic there --]
I agree, you have done a bang-up job. I'm inspired by your example.
Maybe it's time now to find out what triggered your wife to rack up a huge amount of debt not just once, but twice. Whatever it is, it's more than an error of judgment. Could be a disease process or mental illness.
I'm just concerned she'll find a way to do it a third time using means less traceable than credit cards. Please don't be offended but I would lock up anything valuable that could be easily pawned or sold.
Not offended. We do not have a lot of highly valuable things that could be pawned or sold. She has some jewelry I bought her back int he good old days, but used jewelry has no significant value. We have a very expensive antique dining room set but it needs to be refinished. Plus I would definitely notice if it went missing.
I think she has some sort of addiction. She has an addiction vulnerable personality. There is not a lot i can do but watch her credit report and watch purchases. Christmas is a dangerous time, that is when she ent nuts with gifts for people. Now our family draws names. the kids are adults, and they know the situation so they will tell me if she tries to give them some expensive thing.
There is not perfect security. But given the house is in my name only and mortgaged and my truck also has a loan and is probably upside down, there just rent any single items of significant value. She might sell the boat, but i would be happy to get it out of the driveway.
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