The answer c9814708_san be, I believe, both.

For me, and many people like me, shopping certainly had many of the elements of addiction.

I would obsess about buying something. I would seek out opportunities to go shopping although I knew it was damaging my relationships and credit rating. I’d often have trouble stopping and would feel restless and irritable or even depressed, when I stopped or hadn’t been shopping in a while. I denied I had any problems with money and was never open about my purchases regarding price or quantity. I would also be out of control sometimes e.g. buying 2 pairs of shoes when I only needed one or none at all!! One of my clients told me of going into a shop to buy a white t-shirt and coming out a short time later with many t-shirts of assorted colors!

These are all common characteristics of addictive behaviors as described here http://www.indiana.edu/~engs/hints/addictiveb.html .

So, I now readily admit, I had a spending or shopping addiction for many years.

For me shopping was not the cure. It was merely a temporary patch or plaster over some wounds, namely my low self esteem.

Buying stuff made me feel better about myself and more worthy of others’ love and attention, in the moment.

It was temporary at best.

Many people who use shopping, or spending money, as a salve for their wounds report having feelings of remorse and even self loathing afterwards. They regret that they have again succumbed to the seduction of shopping. Their self esteem is hit again as, once more, they have broken the promise they made to themselves to stop using their credit card.

Just as alcoholics wake up the next day and regret last night and vow to, this time, never drink again, so does the shopaholic regret the shopping and vow to never do it again. They promise that they will pay off their credit cards and never use them again.

I would, secretly, make statements like that all the time and then further knock my self esteem by not keeping my promise to myself. I couldn’t be relied on, even by me.

Now what about the other part of the equation…that retail therapy is a cure?

For many people an afternoon of shopping is a very enjoyable way to spend time, either with friends, or alone. The buzz and visual stimulus of the shops and malls make them feel uplifted and brighter. It elevates their mood.

One of the questions I ask people when they start working with me is about their attitudes to shopping. If they describe shopping as a hobby it does raise a red flag for me.

Does it mean they are addicted? Not always.

However, it is worth remembering that shops and shopping malls are in business to sell stuff and make a profit. If you are spending lots of time there, the chances are you are going to spend more money than you intend and often, than you can afford.

So if, for you, the occasional outing to the shops lifts your mood and makes you happy then by all means go for it, at least occasionally. We are meant to be happy.

If, on the other hand you find yourself spending more time or money than you intended when you go shopping maybe it is time to evaluate these trips and find other less expensive hobbies or ways of making you feel better or relieve the boredom.

If you found yourself being a bit alarmed or all too agreeable, when you read the first part of this article contact me and set up a clarity/strategy call with me and we can talk about. You can schedule it here :-http://www.financialclarity.co.nz/schedule-session.html

I have just written a post on my Facebook page about one of the most common questions I am asked:-

“Should I consolidate my debt?”

20111702_sBefore I give an answer, I always ask if they are still using credit cards and if they are, are they paying them off in full every month. If they are then debt consolidation can be useful. It makes payment easier, just a single payment for all of the different debts you have eg. credit card(s), store cards, personal loans etc and it is often a much lower interest rate than credit and store cards.

If however, they tell me that they are still using credit cards I strongly advise that they don’t go for debt consolidation.

Why? It is all too tempting. Suddenly, all your credit cards are paid off and all that wonderful credit is available to you again and you are still in the habit of using it. The first time you tell yourself “I need a new dress, pair of shoes (fill in the blank………) you’ll be reaching for the credit card! In an earlier post of mine http://bit.ly/1IuNvVj I discussed the difference between needs and wants and the impact, not knowing the difference, can have.

I wish I’d had that advice a long time ago. I had a very friendly bank manager and I was always consolidating my debt, only to go back in a month or two to do it again!! The only people who benefitted by this apart from the bank, was the guy who was always coming to put a value on my home so that I could borrow against it. By the time I sold it  and paid off all my debt ( the ultimate debt consolidation) there wasn’t much equity in my property.

So if you are thinking of consolidating your debt, make sure you are not increasing it before you do. This means for most people, stopping using your credit cards first.

If you want to get out of a hole, first you have to stop digging! So it is with debt. If you want to get out of debt, first you have to stop incurring it.

There was an interesting article in the NZ Herald on Sunday.

This is my take on the subject!http://https://vimeo.com/124811703

I’d love your comments on this. Do you use credit cards so that you can get air points or other rewards?

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Do you procrastinate? I know I do! I could do it for the Olympics!!

I have been meaning to write this on here for the past week or so, but always found something more important that needed doing, actually probably more urgent if I was truthful, because I’d procrastinated about that too!!

Sometimes procrastinating can be really expensive; both financially and/or just personally. If you don’t stop doing something that is harmful to you, eg smoking it ticks both of those boxes. As soon as you stop, you save money and also start to improve your health. But what I am focussing on here is money.

I have had several conversations recently, with people who intend to deal with their money shit, “in the New Year”!

Great idea you might think and in principle, it is! However, as the graphic says, time is money! The longer you delay taking at least the first step, the more it costs you. At this time of the year especially.

If you are spending without having any real plan or budget, and no really clear idea of where it has been, or is all going, you could be in trouble! This is particularly if you are doing all this spending on credit cards! The New Year will bring some nasty surprises when those credit card bills come in! Trust me I know these things!!

So here are three tips to stop the flood and, depending where you are with the Christmas shopping, lessen the shock of those New Year bills.

  1. Make a plan now! I mean, as soon as you have read this, or at the very least today! The sooner you start the less it will cost you. Detail your income from now until the end of December. If, you have already been paid, then use the balance in your account now. Then put down all of your planned spending until the end of the the month. This should include gift buying, food shopping, meals out, alcohol, parties etc! It is an expensive time of year! If at the end of that you estimate that you will still have money in the bank or your wallet, well done you!! If not, go over it again and you have two choices – either reduce your planned spending or increase your income!! To help with this you can go to my website, Financial Clarity and download a copy of the Holiday Planner developed by Karen McCall.
  2. Stop using your credit cards. I mean NOW! Using credit cards allows you to be completely oblivious to your spending or have your head in the clouds or, deep in the “money fog’ as I like to call it! If you won’t be able to eat unless you use your credit cards, then that’s OK but make a plan for when you are going to use them and for how much. eg I will spend $100 at the supermarket or grocery store. Then just use it for that and NOTHING more!
  3. Shop with a list or even better do all your shopping online! This means that you are in control of your spending. You buy just what you need and spend just what you have planned. You are not tempted by the slick marketing of the retailers or by your own desires!!

…and most of all have a wonderful Christmas, happy holidays and a healthy and abundant 2015

If you think you need more help than this don’t hesitate to contact me jill@financialclarity.co.nz or +64 21 211 5327

Often, when talking to people about the work I do, I tell them that I help people clear their credit card debt once and for all and never have to use a credit card again. For many that sounds like the definition of impossible! They have cleared their debt before, often many times, and know that it just goes back up again.
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Then, when I tell them about the process I use and explain that, if possible, I will get them to commit to not using their credit card at all until I see them next time, I see the horrified looks and panic setting in!

The reason for this is that, like so many people, their credit card is their security blanket! It’s what stands between them and financial disaster if the car breaks down, the child needs orthodontic work, the dog needs surgery, Christmas arrives, someone has a birthday, friends ask them out for dinner, they need a holiday etc etc! It is where they go for “money” when all else fails. I know this, I have done this, more times than I care to remember, but I also knows that it doesn’t work and only makes the situation worse.

I am not going to go into all the other reasons people use credit cards, like air points etc and the reasons why it is better and cheaper to use debit cards or better still cash! Today I am just talking about using them as your back up plan! I have been a bit facetious above with the “emergencies” people use their credit cards for, but I have either given them myself or heard them, and more, many times when people have told me that they only use them for emergencies.

Now, if you are reading this and thinking “but I do only use them for emergencies and then immediately pay them off in full” then fine. Whilst I do think that there is a better way, this message is not primarily for you, but read on because you might be interested in how you could do it differently.

I then go on to explain how I help them save their way out of debt, once and for all!  Doesn’t that sound good? Too good to be true? Not at all. If you follow the method which I teach you, which was developed by Karen McCall of the Financial Recovery Institute, that is exactly what you can do. I never ask people to cut up their credit cards, nor put them in a container of water in the freezer, I just ask them to trust the process, which has worked for thousands and thousands of people, and not use their credit cards until they see me again. As Karen says, “ if you want to get out of a hole, first you must stop digging”!

The other key steps are to pay the minimum on your credit card each month whilst building up a savings account, which we call a Periodic Savings account. Now I can hear all of you with financial backgrounds or those who pay off your credit cards in full every month, exclaiming that this will cost extra because of the interest. Yes, you are right but if you are someone who constantly uses your credit card and can never manage to always pay if off in full every month, then, trust me, this is a much cheaper way in the long run. Remember I teach you how to pay if off, in full, once and for all and to never have credit card debt ever again.

That’s because the Periodic Savings account becomes your security blanket; it’s where you go to get the money to pay the dentist, the vet, the restaurant, the holiday and Christmas! Using a formula I teach you, you can plan for all these and more, and know that you will always have the money available to cover all these events, without having to bring out the credit card. Once this is functioning well we also start another account which we call a “Safety Net” account and here you provide for coverage of all your expenses if you were to have an interruption in income.

So, if you would like to learn how to save your way out of debt, once and for all, use one of the methods below to contact me and we can have a coffee and discuss it further, to see if I can help you.

I’d love your comments about all of this and feel free to share it with your friends either by email or socially below.

Have a great week everyone and give it a try… Can you manage to not use your credit card for the next week?

Are you still using?

March 20, 2014

I hope Cyclone Lusi didn’t do too much damage where you are (if you’re in NZ or the Pacific Islands). I had a wonderful weekend with 3 of my greatest friends staying for the weekend! Such wonderful fun, with lots of good food and wine thrown in for good measure! 1912198_519433521498949_479782641_n

As you know I am a great advocate of using debit cards, not credit cards and it was great to see that NZ is listening!  Statistics for card use in February in NZ showed that 54.1% of it was on debit cards with the remainder on credit cards. That was on 108 million transactions worth an average of $53!! I still find those numbers mind boggling, don’t you?

“The value of electronic card spending on retail rose 0.9% to a seasonally adjusted $.58 billion in February, according to Statistics New Zealand.” (NZ Herald, March 11, 2014)

Are you still using a credit card or debit card?  Go to my Facebook page ( see the link below) and answer the poll. Get your friends and and family to participate too.

Have a great week  and as always I value your feedback.

As most of you know I counsel and mentor people, who are wanting to change their behaviours around money. I therefore talk to a lot of people about money, not just clients but also people who I am talking to about what I do. Almost everyone is interested in that, but there is a group who cannot get their heads around how I could make an income doing what I do. Sometimes it isn’t easy to make an income but I am very confident of the premise around my business model. There are people who are willing to pay to eliminate or at least reduce, the pain they are suffering from their money mess!

The people who cannot understand this are almost always very good at managing their finances, especially their spending. They seldom have credit card debt, in fact apart from their mortgage or some student debt, they rarely have debt at all. Their credit cards are paid off in full every month without fail. They consider all purchases they make very carefully, often conducting extensive  research before deciding to purchase. Impulsive decisions are rare, if not non existent. So their behaviour is very different from the majority of my clients, who often have significant debt and don’t always manage to pay their credit cards in full every month. They know the buzz they get from impulsive purchases.

So their behaviours around money are vastly different and the first group of people are the ones who are most likely to doubt anyones ability to create a business around helping the second group.They believe that all you need to do is teach people to do what they do. Simple and straightforward.

If only it was that easy. The majority of my clients know what they should do, but actually doing it is a very different beast!

Why is that? Well for one thing they don’t see money and spending as so black and white. Just as some people eat food as simple nutrition, others of us relish the emotions and feelings eating delicious food can evoke. The reason why just knowing what you SHOULD eat, is seldom enough to make dieting successful!

They also invest money and food with more powers than a simple commodity or the way to provide your body with the fuel it needs to perform it’s functions. We can use food or money to make us feel better emotionally, to celebrate with and to give us simple pleasure.
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The reasons for these differences in behaviour are so often emotional or even psychological that changing them can be a very complex issue and require the kind of commitment by them and me , as those trying to lose weight and those trying to help them!

So why the differences? Well, people have all had different life experiences and these affect the way they behave and respond to life’s stimuli. Is that all there is behind it? Not at all!!

Whilst the emotional experiences have significant impact on our reactions, of equal or greater influence I believe, are our inherent personalities. These determine our responses to life in general and our subsequent behaviour. From an early age we can detect differences in personalities and how children react to situations and people, differently.

Sorted, is a New Zealand website which gives vast amounts of excellent information about money behaviour and how to manage your money better. They have an amazing array of calculators which you can use to determine how much you would save over x amount of years if you saved y over time. They can really help improve your decision making ability. I encourage you to explore this site.

The one I am interested in today is the Money Personality assessment tool. Designed by a psychologist, it asks 25 questions and then places you into 1 of 16 money personalities. It is light hearted and fun but also gives good information for you on how your personality may influence the decisions you make around money. I recommend you try it. For  your interest I was hedonistic! I struggle with this type of assessment because I am never sure if I should answer how I have learned to behave or my natural inclination. I usually combine both and come out with pretty interesting but unhelpful results.

Let me know what your personality is and how accurate you think it is.