Communication with Natasha has pretty much been nonexistent for the last couple of weeks. I've emailed and called, but she often doesn't respond to messages, and we haven't spoken directly or seen each other since our first meeting more than a month ago. I am really concerned. It has gotten me thinking about emotional responses to severe financial stress, and how it's sometimes similar to how people respond to health concerns.
I remember having an issue with a tooth in college (a wisdom tooth, I think), and I have an almost irrational fear of going to the dentist. I would get a toothache every now and again. Nothing too painful, but I knew something was wrong, but there was no way I was going to the dentist. Gradually, the pain became more frequent and acute until one day I felt a crack, and the choice was finally made for me. The dentist had to pull the tooth and mentioned that if I had come in sooner, he might have been able to fill it – making the whole experience much less painful and costly.
It's only natural that we want to avoid things we fear, and Americans have had to deal with a lot of financial related stress over the last couple of years – job layoffs, shrinking retirement savings, ballooning debt. A sense of helplessness can set in, leading to inaction and avoidance. Bank and 401(k) statements remain unopened. Better not to see the damage than confront it. Worse still, maybe credit card statements are ignored. There's no money for the minimum payment, let alone the entire balance. Unfortunately the issues don't go away, they just get worse.
So, what's a person to do? At times like this, long-term goals and objectives seem utterly unattainable and meaningless. I mean, it's probably hard enough just getting out of bed let alone thinking about long-term asset allocation strategies or maybe taking 5 years to dig your way out of debt. We have to think much smaller – as in baby steps. Start with a simple move in the right direction – open that statement. Call that credit card company, maybe you can work out a reduced interest rate—or at least freeze the rate until you get it paid off. Then another small move forward, and another. In time you will hit a short-term target – maybe making a few timely payments, or paying off your smallest charge. There's a chance you start feeling a little better. Now the momentum is heading in the right direction, giving you a chance to dig your way out.
In Natasha's case, the obstacles are piling up. She has a substantial amount of credit card debt (more on that in a later post), her rent is months in arrears, and she is going through a tough breakup with her partner. The pressure and fear of having to deal with all this seems to have overwhelmed her. I'd like to speak with her and try to get the ball rolling. I really want to help. But until she makes some time for me, there's very little I can do.