Today's consumer-driven, designer-obsessed culture makes it difficult for many of us to live within our means, and the temptation of an expensive lifestyle can lead most women into living on credit and ever deeper into debt. What to do? Financial expert Glinda Bridgforth offers advice in her new book, “Girl, Get Your Credit Straight! A Sister's Guide to Ditching Your Debt, Mending Your Credit and Building a Strong Financial Future.” Here's an excerpt:
Let’s be honest. Peering into the lives of the rich and famous — by way of glossy magazines and glitzy celebrity-obsessed TV shows — makes us envious of their lifestyle, clothes, bling, and the mansions they live in. We feel pushed to buy into designer culture and to measure up. We want to feel like members of the exclusive club and not outsiders looking in. Granted, we aren’t famous and don’t have the outrageous financial resources that celebrities do. But on our own level, it means reaching for the restaurant bill even when a little voice inside says, “Oh well, just because of this I’m going to be short again this month.” Or, “I have to spend a lot on this gift so I don’t look cheap.” Or maybe you’re just a sister who spends $500 on clothes and $300 on shoes, while making only $7.85 an hour. This is all possible, of course, largely through the use of credit.
There are plenty of people today whose spending is out of control. In 2004, writer Yolanda Young had an article published in USA Today that immediately began circulating on the Internet to brothers and sisters. One year later, it was still being forwarded, because I received my fifth copy of it — this time coming from a friend in California. The article indicated that even in today’s hard economic times, we African-Americans haven’t curbed our spending. It went on to report that “in many poor neighborhoods, one is likely to notice satellite dishes and expensive new cars ... Blacks spend a significant amount of their income on depreciable products. In 2002, the year the economy nose-dived, we spent $22.9 billion on clothes, $3.2 billion on electronics and $11.6 billion on furniture to put into homes that, in many cases, were rented.”
Clearly, debt and credit have become major issues for just about everyone today, regardless of your race or background. And they play an enormous role in the shape our lives take — whether good or bad — as our lives go forward. So how can we begin to understand what credit means and begin to make it work for us? Let’s start by going back to the beginning; I’ll tell you how I cam to appreciate the power of credit, and how I committed myself to helping others to do the same.
My story
If you’ve read either of my previous books, then you’re already familiar with my story. I’m not someone who’s always had her stuff together and likes to preach what I’ve been practicing all my life. To the contrary, I’m someone who had to fall into an abyss before I could acknowledge my mistakes, let go of old, destructive beliefs and behaviors, and rebuild myself professionally, personally, and financially with a future in mind. I see versions of myself in many of my clients, and I can easily recall the emotional, spiritual, and financial debt that I faced during an extremely difficult period in my life nearly twenty years ago as though it were yesterday.
Back then, my debt was so bad that three financial professionals, including two attorneys, advised that I file for bankruptcy. I was also in debt emotionally, still struggling with the fallout from a failed marriage. I was professionally in debt, having said good-bye to the banking industry so I could pursue something greater yet sensing that I’d lost my identity because I was no longer a bank manager. And I was spiritually in debt, feeling so ashamed and embarrassed about the state of my life that I could barely keep in contact with friends and family. I simply wanted to crawl into a cave and be left alone. It was quite ironic that I had managed a $90 million unit in a major California bank with twenty-two employees under my supervision, yet I couldn’t account for my own financial well-being. I had ascended through the ranks of a thorny corporate ladder as a black woman but let my personal life descend down a slippery slope. The year 1988 will always be marked in my mind as the year I experienced the “Three B’s”: Breakdown, Breakout, and Breakthrough. It was a surprising outcome, given the expectations I’d set for myself long before then.
I grew up in a blue-collar family in Detroit, the fourth of six children. My parents worked extremely hard — Dad worked at least two jobs at a time and Mom toiled long hours as CEO of the family. Sometimes she did occasional domestic work in the homes of middle-class white folks, but maintaining our home and nurturing us was more than a full-time job. As a kid, however, I had no concept of real wealth and was well into adulthood before I realized that my family was not middle class. My parents’ strong work ethic kept our household up and running; even though they struggled to meet their obligations, we were always well cared for and they always maintained good credit. My dad knew that creating excessive debt was never an option for him. As he told me recently, “It was not hard to get credit, just hard to pay it back.” If only I, too, had learned and understood that message before reaching adulthood.
When I was eight years old, I made the decision to always be in control of my money and my life. I decided this as I watched my parents, and in particular, my mother, go through hard times and endure the stress of living in a world still rife with racial segregation and discrimination. I knew my mother felt trapped; with six children and one overworked breadwinner, my mom’s urge to leave home for a time-out or escape on a brief vacation could never be satisfied. I understood her dependence on my father, and I was determined not to place myself in a similar situation. I never wanted to be without my own resources or without a place to go for support. At least, that was my plan. Little did I know that even as a well-paid, independent, professional woman, I’d fall into other financial traps.
By the time I met my first husband, whom I’ll call Jeffrey, I was a bank officer with a good income and good credit, my own apartment and a car, but I was still living paycheck to paycheck. Jeffrey had had prior careers in professional sports and sales, and by the time we married, he’d become an entrepreneur. Like many couples, we didn’t discuss money, financial history, or spending patterns before making a commitment. Nevertheless, I was looking forward to greater financial stability and having a partner in the journey to wealth.
From the beginning, Jeffrey and I always had clear goals — to be financially successful and enjoy a lavish lifestyle. Long story short: These dreams were squelched by a series of poor decisions and a constant, risky pattern of banking on future income. Jeffrey had little to no credit, and as an entrepreneur, his income was inconsistent. I wasn’t an ideal saver either, and together we lived in what I call “virtual prosperity” to maintain an image of wealth and success that was far different from reality. We lived on credit, avoided price tags, and got caught up in a vicious cycle — the more we made, the more we wanted and the more we spent. To make matters worse, our emotional connection to each other grew as empty as our bank accounts.
Eventually, our lavish lifestyle caught up to us to the tune of $50,000 in unsecured debt (i.e., money we owed to people and companies with no collateral attached) through credit cards, lines of credit, and personal loans. It sunk my credit rating straight down. The debt began to haunt me so much that it affected my job and ability to think clearly with my own clients at the bank. But trying to take charge of the problem merely opened the proverbial Pandora’s box: As I attempted to regain our financial footing and pay off the debt, I became so stressed and fearful that I found I was struggling to do my job to the point where I needed to take a break. But how could I? I was dependent on that income, living paycheck to paycheck! Unwilling to leave my job, I continued to let the anxiety gather negative energy and strength. I tended to everyone else — my husband’s happiness, my employees and job responsibilities at the bank, our creditors’ demands, requests from in-laws, and even our dog’s needs. Meanwhile, I was eroding on the inside. Anger, shame, and resentment morphed into depression. Something had to change.
As it happened, a lot needed to change before my life could be right again. And a lot has continued to change since then. I resigned from the bank, got divorced, put forth a plan to pay off the $50,000 debt that I was left with, started a business, wrote two books, and returned to my roots in Detroit after having lived in the Bay Area for twenty-four years. A few years ago, I reconnected with a childhood sweetheart — my first boyfriend and the first boy I ever kissed. Three months after that we were engaged, and three months after that we were married. Our whirlwind romance and marriage is possibly a book for the future, but suffice it to say that during our courtship there were many, many, many hours of conversation about our finances. A major difference between this marriage and the first one was not just Ed’s willingness to discuss money, but the fact that he initiated it! Before we got married we talked about our incomes, debts, spending patterns, savings habits, and we reviewed each other’s credit report. Mine was good, and thankfully his was even better!
But meeting Ed and finding my “happily ever after” doesn’t mean I can sugarcoat the journey I took. My road back to financial prowess didn’t happen overnight, and I didn’t do it alone. It was long, soul-searching, and arduous at times. I sought the guidance of many professionals, including financial counselors and psychologists who helped me reformulate my perspective on my failures, learn from my mistakes, and reprogram my behavior when it came to money. In other words, it was a team effort. I had a lot of work to do. I had to relinquish a toxic ego and establish a new one. I had to shift my self-righteous mind-set over to a modest, self-effacing one that didn’t care so much about job titles, materialism, and what other people thought about me. I’ll be pointing out many times in this book that you’re not alone in your journey and that together we can begin to pull you up from whatever bottom you currently stand on. It doesn’t matter how far you think you’ve fallen. The same rope that helped me can help you so long as you hold on and have faith in yourself.
In this book, I’ll continue to use my story as well as other sisters’ stories to share examples of how we can sabotage our own financial stability in various ways. Through therapy I’ve learned a lot about subconscious beliefs and unconscious decisions that translate to repeated disappointments and failures in real life, which can persist in all our actions like a lingering cough. You can’t be emotionally happy while financially bankrupts. And it’s equally rare to be financially happy while emotionally bankrupts. The two often go hand in hand, which is why I firmly believe that a holistic approach to cash flow and debt management that integrates emotional and spiritual elements with practical techniques is the best financial healing — and only lasting form of treatment.
When I founded Bridgforth Financial Management Group in 1990, I knew that unlike most other financial coaches, I could offer something special to my clients on account of my own personal experience. I could finally take all that I had learned not only as a bank manager, where I got my foundation for the financial-management methods I teach now, but also as a victim myself of money’s cruel lessons when it’s poorly managed. If you’ve never examined the emotional and cultural issues at the root of your spending patterns, this may be the real reason why you can’t seem to heal your bank account. I’m going to help you do just that in this book.
I feel blessed to have the opportunity to teach other sisters the how-tos of financial healing, as well as inspire them to keep thinking positively. Remember, if I can do it, so can you.
Excerpted from “Girl, Get Your Credit Straight!,” by Glinda Bridgforth. Copyright 2007, Glinda Bridgforth. All rights reserved. Published by . No part of this excerpt can be used without permission of the publisher.