How to Recover from Financial Abuse - From Gigs to Partners
October is Domestic Violence Awareness month, something near & dear to my heart. Financial abuse is one indicator of an abusive relationship and this can be found anywhere there are people. Thus we become more aware of it, and we act in new & different ways to recover from it and prevent it in the future.
From the organization that doesn't pay on time to the low-balling of honorariums, you've surely seen it all. So have I. I've been paid late, had to request fees actually be paid, been offered insultingly low fees, and have had to chase payments down after work was completed.
In romantic relationships, or even platonic relationships, it's not always our personal money stories that trip us up, but sometimes other people who trip us up (financially) on purpose. It's the roommate who doesn't pay rent on time, the friend who never foots the bill when you take turns paying, the partner or spouse who unfairly distributes the bills, the soon-to-be-ex-spouse who drags out the divorce, resulting in high attorneys' fees. Been there, done that, still have an awesome credit score. Surviving a relationship like this is one thing, recovering from such a relationship is another.
It took me a very long time to drag myself out of one horrific relationship and it's taken me years to get beyond it financially. Luckily, the whole, ongoing process has lead me to some fantastic money habits and has created skills that have let me help other women learn more about money, too.
A quick note: some, but not all, of the links in this post are Affiliate links. That means if you buy a book after clicking the link, I receive a small portion of that purchase, for which I thank you. However if you need to, get the book at the library. Saves a ton. ;-)
And another quick note: I refer to a name with a bleeped-out swear word in it in this post. Just fyi.
1. RUN, do not walk, to a Credit Union.
Like many others, I bank-hopped for a few years. I always ended up at my old Big Bank until I tried to refinance my auto loan…with the same Big Bank. Interest rates had dropped so I asked them to refinance it. Really good credit score, steady payments, I was a good candidate, but they wouldn’t do it.
So I walked. Literally, I went down the street. And I saved over 4% interest on the remainder of my car loan.
That was pretty much how it went for me when I dumped the Big Bank. And this was how different it was when I found a new home for my funds, my local Credit Union (CU):
Me: “How much does it cost to transfer the balance on my credit card?”
CU Associate: “It’s free.”
Me: shaking my head in disbelief “You mean there’s no minimum fee? Of at least $400 or 4%?! WHY?!”
CU Associate: “Because we’re a non-profit. We work for our members.”
Me: *breaks open champagne*
Then when I learned that you can, with your routing/account/member number, actually bank from Service Center in the nation, I was sold. Find a Service Center here.
And you should be sold on this idea, too. Your money talks, so start talking about institutions that work for you, not against you.
Here's a quick summary of what I saved/started earning:
- over 4% on my car loan (I had about 24 months left on it and paid it off early anyway)
- about 3% on my credit card (because I had already renegotiated for the lowest rates possible with my other credit card provider
- approximately $10/month on account fees...because accounts at a CU are FREE.
- I started earning about .1% on my savings and now it's over .5%. That's not a lot, but relatively speaking, it's a ton.
N.B. If you haven’t watched “The Big Short” yet, it’s high time. (Affiliate link)
2. Learn to work in percentages.
When you're self-employed, part- or full-time, it's important to factor in costs, how much to save for taxes, and how much you're paying yourself every month. And it's most especially important when you're trying to figure out where to cut back and where to spend more. You need to know what your percentages are.
This is why I'm a HUGE, HUGE fan of the 50-30-20 budget, and I learned about it from Elizabeth Warren and Amelia Warren Tyagi in their book All Your Worth: The Ultimate Lifetime Money Plan. (Affiliate LInk)
When life is rough, your plan might be 80-5-15 or 90-0-10, and there are a lot of people who live in that dynamic all the time. It's incredibly powerful to know where you stand in terms of needs & savings & wants as it shows you where your life is out of balance. Once you know where, you can start trimming or building something new to get it into better balance.
3. Build a fierce Fund-Known-By-Many-Names.
This is the fund known by many names:
- The Future Fund
- Emergency Fund
- Rainy Day Fund
- F--- You Fund
- The Freedom Fund
- Mad Money
- Life Savings
- Nest Egg
- Reserve Fund
This is the fund which you build and continue to add to so that you may enable yourself. Because *this* my friends is the fund that enables you to say NO when that notoriously low-paying conductor comes calling. (Remember this guy?) This is what enables you to say:
I don't need your money. I have my own.
This is the fund that covers the rent when your roommate is late. Again.
This is what covers your assets when you have a tax bill higher than expected.
This is what literally saves you when your so-called partner turns out to be a bad egg and you need cash to get yourself out STAT.
4. Read and then keep on reading.
It's amazing the kind of financial information we now have readily available to us...and how many people fail to go looking for it. Don't be one of those people, be somebody who gets it figured out. Financial savvy is a way of life as much as it is a continual class in the school of life. And besides, wouldn't you like to know if someday you'll actually be able to retire?
Here is a list of the books and websites that have helped me gain financial savvy and those in no particular order. I've put a short comment to some of them. Yes, every single one of them is an affiliate link:
Women Don't Ask by Linda Babcock and Sara Laschever - This is the first book I ever read on learning to negotiate. Just in the past few months I've negotiated about $250 of savings and a lot of peace of mine. It's worth it.
Ask for it by Linda Babcock and Sara Laschever - Their second book, this one shows you how to negotiate. It's all in knowing what you want and taking action for it.
Emotional Currency by Kate Levinson - This was most helpful for discovering undercurrents of feelings about money and earning money. As you journal as you read the book, it is very insightful!
Financial Recovery by Karen McCall - She's done everything with money. A MUST READ if your financial life has been destroyed by anyone--you or a partner or a bad money manager.
Overcoming Underearning by Barbara Stanny - A MUST READ for artists, creatives, and people who think their chosen path won't earn them much money.
<a href="https://www.amazon.com/Overcoming-Underearning-Five-Step-Plan-Richer/dp/006081862X/ref=as_li_ss_il?s=books&ie=UTF8&qid=1477353899&sr=1-1&keywords=Overcoming+Underearning&linkCode=li3&tag=nicolwarnemez-20&linkId=bb394fb79aa74bf4658f82d585ce4f89" target="_blank"><img border="0" src="//ws-na.amazon-adsystem.com/widgets/q?_encoding=UTF8&ASIN=006081862X&Format=_SL250_&ID=AsinImage&MarketPlace=US&ServiceVersion=20070822&WS=1&tag=nicolwarnemez-20" ></a><img src="https://ir-na.amazon-adsystem.com/e/ir?t=nicolwarnemez-20&l=li3&o=1&a=006081862X" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;" />
Secrets of Six-Figure Women by Barbara Stanny
The Money Book by Joseph D'Agnese and Denise Kiernan - An excellent book on dealing with money as a freelancer. HOWEVER, I recommend you use different bank accounts for business & personal and since you're using a credit union, you can have as many (free) accounts as you want. It works brilliantly as long as you work it.
All Your Worth - Elizabeth Warren & Amelia Warren Tyagi - A MUST READ.
The Millionaire Next Door by Thomas Stanley & William Danko - A MUST READ.
<a href="https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474/ref=as_li_ss_il?ie=UTF8&qid=1477353136&sr=8-1&keywords=millionaire+next+door&linkCode=li3&tag=nicolwarnemez-20&linkId=0a0f5ddee90c32cb8e2218512ec27278" target="_blank"><img border="0" src="//ws-na.amazon-adsystem.com/widgets/q?_encoding=UTF8&ASIN=1589795474&Format=_SL250_&ID=AsinImage&MarketPlace=US&ServiceVersion=20070822&WS=1&tag=nicolwarnemez-20" ></a><img src="https://ir-na.amazon-adsystem.com/e/ir?t=nicolwarnemez-20&l=li3&o=1&a=1589795474" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;" />
Rich Dad, Poor Dad by Sharon Lechter & Robert Kiyosaki. I recommend this one with a big grain of salt: Kiyosaki's opinion (and also that of his wife, as I learned from a podcast she was on) is that "everyone should invest in real estate." And that's not true. There are great insights from this book and it's fantastic for mentality, however like everything else: do what works for you.
The Rules of Money, the Lessons of Life by Suze Orman. As with any financial guru, it's important to consider what they say and then to explore it for yourself.
Women & Money by Suze Orman. Written by a woman for women. A smart read.
GetRichSlowly.org - This blog isn't as active as it used to be, however the #1 rule of Do what works for you still applies, and that's where I got it from.
- Dave Ramsey's Blog - It's fair to say I'm a partial fan of Dave Ramsey. I culled some fantastic ideas from his blog and other resources about him on the internet. Worth putting on your "to read" list.
5. The hard part comes later.
When you make some progress, your life will begin to shift. And it may not all be pleasant. Your friends might not like it that you say no to dinner out, your family might be miffed that your Christmas presents are more appropriately priced for your budget. Your spouse or partner might not like the change. And in the words of a great friend of mine, who heard this from a co-worker, be prepared for this:
When you get to a new level, you'll get the devil.
In other words, when you make progress and establish yourself in a new level of being (perhaps one of appropriate spending, no debt, or serious accomplishment), something really aggravating will happen. Or perhaps several somethings. Sometimes it's annoying, other times it might really shake you.
Don't let it. You're worth so much more than that.
The obligatory disclaimer: I'm not a financial expert, I'm simply passing on solid information that has worked very well for me. If you need advice, consult a professional. It's totally worth it.