Drop the Baggage and Move On

Emotional baggage seems to come with the territory of relationships. Many people define their newest life and love by their past, and this can often reach into the financial realm of budding romance. This was the case recently for one of my friends.

My Friend's Baggage

Recently, my friend invited my husband and me to dinner. We all sat around the table sharing laughs and generally having a blast. Then her boyfriend left the room, and things turned instantly sober.

“Guys, I just don’t know what to!” Cupping her head in her hands, my friend bowed her head. Of course, I was extremely concerned about her, but I was also completely baffled. Where did this come from?

“Everything has been going great,” she explained, only confusing matters further. “We’ve been spending more time together, and he’s even talking about buying us a house.” At this point, my husband laid his head on his forearms (other people's big financial decisions seem to elicit this reaction from him).

“How do I know he won’t leave, just like Matt did?” We finally got to the point.

Connecting the Dots

I reassured her that her boyfriend was nothing like Matt, but I also went a step further to explain that we, as people, need to look at the future without viewing it through the past. If we want to keep our current relationships healthy, we can't throw arsenic-tainted memories into the pot of new love.

Living with debt is just like this as well. It constantly hangs over our heads, shadowing all of our financial thinking with gloom. But only if we allow it to. Just like our romantic pasts, we need to learn to break free of the past debt so that we can move on and make good decisions in the future. The only way to do this is to commit to paying off debt step-by-step, remembering that it’s okay to laugh at our past decisions along the way.

Steps to a Healthy Relationship with Finance

To forge ahead through debt with a healthy new monetary relationship, we first need to learn to distinguish the good from the bad. Just like a bad boyfriend, bad credit decisions can hang on by tooth and nail. So we need to identify these bad decisions and nip them in the bud, in the following order:

  • Break Up with Small-Balance Credit Cards – First, we should pay off small balance credit cards (often defined as cards with less than a $500 balance). If you have multiples, begin with the highest interest rate card.
  • Drop the Connections to High Interest Debt – Next, we should identify all of our debt by the interest rate and pay more toward our highest interest debt each month. One of the best ways to accomplish this is to pay double or triple the minimum balance on the high interest debt until it is paid off.
  • Say Adios to Your Credit Cards – Finally, we need to kick our cards to the curb. Keep one card with less than a $2,000 credit limit for emergencies only. Freeze it in a block of ice or store it in a safety deposit box; just keep it out of everyday reach. Cancel or call to freeze your account on all other cards; this depends on if your credit score can take a hit (which occurs when you cancel a bunch of cards at once).

Whether your emotional baggage is keeping you from joining finances or you treat money like the ex-boyfriend that won't go away, you could benefit from dropping the baggage, clearing the clutter, and moving on toward financial freedom.

What about you? Has baggage ever held you back from taking control of your finances or joint financial decisions?

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Anonymous's picture

Niki wrote:

Fri, 06/10/2011 - 13:06 Comment #: 1

Nice post! It's so true.

Sometimes past mistakes do haunt us, but it is healthy to move on, emotionally and financially.

Anonymous's picture

jeff @ Sustainable life blog wrote:

Fri, 06/10/2011 - 15:24 Comment #: 2

I think this is a great post, jessica - there's no reason to think that past performance is an indicator of the future. It has bearing, yes, but things will be different, and people will change. If you've been in debt in the past, that doesnt mean you cant get out of it, it just means you have to figure out how you got there and change it.

Anonymous's picture

MoneyCone wrote:

Fri, 06/10/2011 - 21:21 Comment #: 3

Absolutely! I have a friend who's the reverse - he claims he can turn of memories like turning off a switch. (And sometimes I think he isn't bluffing!)

Needless to say, I always find him cheerful!

Anonymous's picture

Lindy Mint wrote:

Fri, 06/10/2011 - 22:02 Comment #: 4

Oh yeah, I've seen credit card baggage come back to haunt me. Paid the credit card down to zero, then watched as it slowly crept back up to $4000. It wasn't until I cognitively realized that there is no good reason to use a credit card (if I'm not planning on paying it off at the end of the month) that my credit life started to change.

Jessica Schmeidler's picture

Jessica Schmeidler wrote:

Sat, 06/11/2011 - 04:20 Comment #: 5

It's amazing how much baggage we carry with us through our day to day lives. It's easy to feel like we're the only ones sometimes, and yet it's something we can all relate to. Thank you for taking the time to share your thoughts! :)

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