ADHD Impulse Spending & Credit Card Debt

[ThatNickGuy]

I've mentioned a few times that I've been trying to work off some debt. Compared to others, I don't know if my debt is all that bad. I don't have any student loans left to pay, nor any other debts except for one credit card. I owe about $3,000 on it right now. I used it for all of my spending, especially since the company has a points system I can use towards buying groceries. I have it set up for several pre-authorized payments for my services like internet, mobile, etc.

For income, I get about $1,000 every two weeks from work. It's been a bit less than that lately because of cut hours. Rent is $1,000 a month. Every second paycheque is specifically for rent. Every other paycheque goes on the credit card. If I get a government bonus, like a GST cheque or the recent carbon tax rebate, it goes right on the credit card. I've never missed a payment and have paid at least the minimum amount. I have a very good credit score.

But it feels like I'm never catching up. I know I can be irresponsible with my spending. I'll buy comics when they come out. The odd game on Steam. (and only when it's very cheap). Sometimes buy or go see a movie. Every day at work, I'll hit the snack machine and spend about $6. I recently stopped going out for lunch and have been making my own meals. I cook more than order out, although sometimes I'll order something from Uber Eats.

But it just seems like I can never get that debt down. And I hate it because I feel irresponsible. With my ADHD, I often tap the card without really thinking about it.

I tried contacting my credit card company to see if they offer any kind of relief or debt forgiveness, but they didn't offer any solutions. The person I spoke with just kept asking "What are you asking us to do?" and I basically kept saying "I don't know! I've never called for something like this before, so I don't know what my options are!" and she never offered any options.

I have a second credit card that I honestly never use and have considered just cancelling.

 

[Shakey]

It might be better to talk to your bank about getting a personal loan to pay off the card. You’ll get a much better interest rate, and can set a term so you know you’ll have it paid off in 2 or 3 years, or whatever works for you.

 

[Dave]

Also, it might help to see if your landlord will allow you to do what i do. Instead of paying all of my rent from a single check, I pay 1/2 from the first check & 1/2 from the second. It allows me to have more money each check for things like food & whatnot.

 

[Ravenpoe]

I've mentioned a few times that I've been trying to work off some debt. Compared to others, I don't know if my debt is all that bad. I don't have any student loans left to pay, nor any other debts except for one credit card. I owe about $3,000 on it right now. I used it for all of my spending, especially since the company has a points system I can use towards buying groceries. I have it set up for several pre-authorized payments for my services like internet, mobile, etc.

For income, I get about $1,000 every two weeks from work. It's been a bit less than that lately because of cut hours. Rent is $1,000 a month. Every second paycheque is specifically for rent. Every other paycheque goes on the credit card. If I get a government bonus, like a GST cheque or the recent carbon tax rebate, it goes right on the credit card. I've never missed a payment and have paid at least the minimum amount. I have a very good credit score.

But it feels like I'm never catching up. I know I can be irresponsible with my spending. I'll buy comics when they come out. The odd game on Steam. (and only when it's very cheap). Sometimes buy or go see a movie. Every day at work, I'll hit the snack machine and spend about $6. I recently stopped going out for lunch and have been making my own meals. I cook more than order out, although sometimes I'll order something from Uber Eats.

But it just seems like I can never get that debt down. And I hate it because I feel irresponsible. With my ADHD, I often tap the card without really thinking about it.

I tried contacting my credit card company to see if they offer any kind of relief or debt forgiveness, but they didn't offer any solutions. The person I spoke with just kept asking "What are you asking us to do?" and I basically kept saying "I don't know! I've never called for something like this before, so I don't know what my options are!" and she never offered any options.

I have a second credit card that I honestly never use and have considered just cancelling.

If your ADHD brain works anything like mine, get yourself a budgeting app. Put everything you spend in it to track your spending, and let it display how much total you've spent every week. Once you've done this and can establish 1: how much you are spending, and then 2: how much you want to spend. It takes some time to get into the habit, so don't be discouraged if you don't immediately follow your own rules (for me, not quitting immediately is the hardest part) but if you can make it a habit, it can literally start to fix itself. Because the next time you go to the snack machine, you pull out your phone to input it in, see how much you've spent, and then decide do I really need it? Is there a cheaper alternative? Looking at your history you can see the things you've bought and ask, did I really need these? So I regret buying them?

It won't happen overnight, and you'll likely fall off and stop using it from time to time, but if you make an effort to get back on, keep recording and budgeting, it almost becomes like a game score. And then your start feeling good about not spending money.

 

[ThatNickGuy]

If your ADHD brain works anything like mine, get yourself a budgeting app. Put everything you spend in it to track your spending, and let it display how much total you've spent every week. Once you've done this and can establish 1: how much you are spending, and then 2: how much you want to spend. It takes some time to get into the habit, so don't be discouraged if you don't immediately follow your own rules (for me, not quitting immediately is the hardest part) but if you can make it a habit, it can literally start to fix itself. Because the next time you go to the snack machine, you pull out your phone to input it in, see how much you've spent, and then decide do I really need it? Is there a cheaper alternative? Looking at your history you can see the things you've bought and ask, did I really need these? So I regret buying them?

It won't happen overnight, and you'll likely fall off and stop using it from time to time, but if you make an effort to get back on, keep recording and budgeting, it almost becomes like a game score. And then your start feeling good about not spending money.

Any recommendations? Preferably a free app because I just looked up budget trackers and most of them have a monthly fee. I found one called Spending Tracker that's pretty basic, but I think it might work.

 

[Tinwhistler]

I don't know if my debt is all that bad. I don't have any student loans left to pay, nor any other debts except for one credit card. I owe about $3,000 on it right now.

(less than helpful comment) Man, if you could only see how much I spend on credit card debt as a leftover from having a spend-happy wife...

(more helpful comment) That said, any amount hanging over you can feel like a stone around your neck if you never seem to make progress. One of the things I did was similar to another suggestion here: get software. I use quicken, but there are free/cheaper alternatives. I put in my monthly known expenditures as bill reminders--mortgage, utilities, etc. I put in my paychecks as well.

Then I push all the reminders to the ledger a month early. That lets me look ahead 4 weeks, see what all my outflows are going to be, see what my income is, and see what my lowest point for the month is. That's my 'spending capital' for the month. So, it doesn't matter if I have $500 today if 3 weeks from now I'll only have $75. It means I can spend 75 dollars this month (these are made up numbers for example purposes). Then I can mentally budget my monthly variable spending (groceries, gas, extra money on credit cards) and see if I have anything left over for fun stuff. If I don't, I don't buy it on a card, even though I have plenty of available credit for most any purchase I'd want.

I've made so much headway on the credit card debt that way in the last 24 months since getting divorced.

 

[Dei]

Also, I'm unsure if credit score works the same in Canada, but if it doesn't have fees, I wouldn't cancel the second card because it reduces your "available credit" and will lower your credit score.

 

[Ravenpoe]

Any recommendations? Preferably a free app because I just looked up budget trackers and most of them have a monthly fee. I found one called Spending Tracker that's pretty basic, but I think it might work.

I use one provided by by bank, so maybe see if your bank has one?

Otherwise even a simple one should work, anything to just put it into your mind what you're spending before you do it.

 

[PatrThom]

...it feels like I'm never catching up [...] like I can never get that debt down. And I hate it because I feel irresponsible. With my ADHD, I often tap the card without really thinking about it.

Hey there, Nick. I remember what living like that is like, and I didn't enjoy it one bit.
I can only tell you what worked for ME, so take this advice for what it is (advice), and hopefully it will help you to come out the other side only a little worse for wear. In my case, I didn't use any app or service because I felt finances were too tight even for that. I just used a couple of text documents on my computer.

The first is a budget/list I made of ALL the expenses I would have over the course of a year--insurance, rent, utilities, vehicle registration, whatever--everything that I expected I would have to pay at least once per year. For things like utilities that I knew would go up and down over the course of the year, I added up a entire year's worth and then divided by 12 to get the monthly average. I then grouped the monthly expenses together first, followed by the annual expenses, and sorted them by due date. So "rent," for example, would be due on the 1st of each month, so it got moved to the top of the list, all the way through to "natural gas" bill, which was always due on the last day of the month, so I put it due as "28" since that's the last day that every month has. Then the ones after that would be the annual expenses, so they would get due dates of things like "Jan/Apr/Jul/Oct" for the water bill (which was due once per quarter)...hopefully you get the idea here. For payments that had an interest rate OR stated late fee, I would also put that after the due date, just so I knew at a glance which ones would be the most painful to miss, if/when I was forced to choose to miss any. For things like groceries, I would figure out an average after a month or two and then add that as a "monthly" payment.

The second list is a running ledger of money, past and future. Start with your current bank balance, and then list under that (in a running ledger style) any currently pending (but not yet shown by your bank) charges under it. Treat that money as "spent" (because it is!) even though it might still technically be included in your bank balance. Then list any of the payments you will need to make before your next payday AND PAY THEM (and add them to the pending payments). Since any bills that are due before your next payday can't be paid with money you don't have yet, they have to be paid with the money you have NOW. The total you're left with is the total money you have available until your next payday. Draw a line with a date (On my computer, I just type a line of =====date-here=====) to signify the arrival of that next payday.

From here you just follow the system. You enter the upcoming known payments you will have to make between each payday line for at least three paydays in advance (so you will always have at least 3-4 sections separated by payday lines), and Then You Just Pay Them. You don't get to spend any "discretionary" money until all your known payments are done, and your extra money goes towards paying off your highest interest-bearing debt (usually your credit card(s)). If you get an unexpected expense that you can't actually pay, then it gets buffered by the credit card under the assumption that you'll make up for doing so on the next payday. If your credit card has a rewards program, then good for you. Use it for everything to max those rewards (assuming you don't generate extra fees for using that card) BUT know that you will have to pay off the month's accumulation in addition to your normal minimum card payment once the card bill comes due.

I apologize if the above is not clear. I was interrupted countless times during the few hours it took to complete. I'm more than willing to give actual examples or explain what I mean for each step if you need. I realize it's not an "express" kind of thing, but a lot of that has to do with the amount of money you have to work with. More is better, obviously, but there's only so much you can cut, so many expenses you can trim before you hit a kind of hard minimum on how much it merely costs to exist. Here's hoping that your country's healthcare system can help you succeed where I needed an actual windfall in order to get ahead.

--Patrick

 

[PatrThom]

Oh, and something I forgot to mention. Every month or two, do a rebalance/survey of things. Did your Internet bill go up? Did your interest rates or due dates change? Check everything over and make sure.

--Patrick

 

[Tinwhistler]

Hey there, Nick. I remember what living like that is like, and I didn't enjoy it one bit.
I can only tell you what worked for ME, so take this advice for what it is (advice), and hopefully it will help you to come out the other side only a little worse for wear. In my case, I didn't use any app or service because I felt finances were too tight even for that. I just used a couple of text documents on my computer.

The first is a budget/list I made of ALL the expenses I would have over the course of a year--insurance, rent, utilities, vehicle registration, whatever--everything that I expected I would have to pay at least once per year. For things like utilities that I knew would go up and down over the course of the year, I added up a entire year's worth and then divided by 12 to get the monthly average. I then grouped the monthly expenses together first, followed by the annual expenses, and sorted them by due date. So "rent," for example, would be due on the 1st of each month, so it got moved to the top of the list, all the way through to "natural gas" bill, which was always due on the last day of the month, so I put it due as "28" since that's the last day that every month has. Then the ones after that would be the annual expenses, so they would get due dates of things like "Jan/Apr/Jul/Oct" for the water bill (which was due once per quarter)...hopefully you get the idea here. For payments that had an interest rate OR stated late fee, I would also put that after the due date, just so I knew at a glance which ones would be the most painful to miss, if/when I was forced to choose to miss any. For things like groceries, I would figure out an average after a month or two and then add that as a "monthly" payment.

The second list is a running ledger of money, past and future. Start with your current bank balance, and then list under that (in a running ledger style) any currently pending (but not yet shown by your bank) charges under it. Treat that money as "spent" (because it is!) even though it might still technically be included in your bank balance. Then list any of the payments you will need to make before your next payday AND PAY THEM (and add them to the pending payments). Since any bills that are due before your next payday can't be paid with money you don't have yet, they have to be paid with the money you have NOW. The total you're left with is the total money you have available until your next payday. Draw a line with a date (On my computer, I just type a line of =====date-here=====) to signify the arrival of that next payday.

From here you just follow the system. You enter the upcoming known payments you will have to make between each payday line for at least three paydays in advance (so you will always have at least 3-4 sections separated by payday lines), and Then You Just Pay Them. You don't get to spend any "discretionary" money until all your known payments are done, and your extra money goes towards paying off your highest interest-bearing debt (usually your credit card(s)). If you get an unexpected expense that you can't actually pay, then it gets buffered by the credit card under the assumption that you'll make up for doing so on the next payday. If your credit card has a rewards program, then good for you. Use it for everything to max those rewards (assuming you don't generate extra fees for using that card) BUT know that you will have to pay off the month's accumulation in addition to your normal minimum card payment once the card bill comes due.

I apologize if the above is not clear. I was interrupted countless times during the few hours it took to complete. I'm more than willing to give actual examples or explain what I mean for each step if you need. I realize it's not an "express" kind of thing, but a lot of that has to do with the amount of money you have to work with. More is better, obviously, but there's only so much you can cut, so many expenses you can trim before you hit a kind of hard minimum on how much it merely costs to exist. Here's hoping that your country's healthcare system can help you succeed where I needed an actual windfall in order to get ahead.

--Patrick

This is pretty much what I do with quicken..just using a software ledger to make some things a little easier.

 

[PatrThom]

I allow the second text file to run for a full year before I start deleting the things at the start, too. Just so I know what I was doing or when that payment went out or whatever. Also it gives me the ability to recalculate rolling averages.

--Patrick

 

[ncts_dodge_man]

Even something as simple as a spreadsheet - Excel/Google Sheets/what have you would work.

I went through the same thing that Patrick did - make a list of everything and average things out for the year, then I have a tab for each of my paychecks (adding my wife's disability in monthly) and put in everything that fits under each paycheck and have a running total for it.

Biggest thing was to get in the habit of doing daily balancing against my spending/bank online, but now that I've been doing it for years, it's become second nature to me. Getting into the habit was the hardest part.

This also gives me a running balance for what is left out of each paycheck to be able to put money into savings and/or try to control my wife's impulse spending as much as I can with how much we actually have available.

 

[PatrThom]

I found this ... relatively accurate. Even more accurate for my wife than me, in fact.



--Patrick

 

[Frank]

I found this ... relatively accurate. Even more accurate for my wife than me, in fact.



--Patrick

LoL it me. Like exactly. Wow. I can't believe how much of it mirrors my experiences with life. I literally told my partner the other day about how much I wanted to harness five year old Frank's determination in doing something. That kid took his older cousin's bike and crashed it into the grass and gravel driveway at my grandparent's house 40 times teaching himself how to ride a bike, how come adult me can't make a single phone call or fill out a form without hours of war with myself.

The passionate fixations especially. Right now for me, even medicated which has lessened it somewhat, I still only care about counting calories, exercising and weighing myself obsessively several times a day. I can pry myself away from fixations now at least, it was basically impossible before. I didn't even realize it until recently when I was being tested for it how bad it was. Like I could obsess over Warhammer for months and then drop the entire hobby for years without as much as a thought. No wonder my Warhammer friends were always so frustrated with me. The guy who built the full sized fold out table and has terrain sets for multiple biome types hand made just walks away for a couple of years and then waltzes back into the club and acts like no time has passed. Bothers me that I'm at my happiest when engrossed in something like this.

I just got a new credit card after bankruptcy that I intend only to use for groceries and then immediately pay afterwards or for emergencies. No more bad debt.

Also back on ADHD because now I want to keep writing about it because that part she said was entirely too true, I'm starting to think (because of the genetic factors behind it) if my dad doesn't have the same shit going on and doesn't realize it. A lot of what made him an absolutely shit father is probably because his dad (who was always incredible to my brothers and I, but didn't really have much patience for me either) had zero interest in trying to understand him at all and was abusive in that way only someone from before WW2 could be and he had no interest or patience being a dad either. He gave up immediately when things got hard. He can't pay attention to a single word said to him by someone else. His temper is so sudden and out of nowhere. His brain is probably just as fucked up as mine is.

 

[drawn_inward]

For a free app, Every dollar has a free option that you have to manually load you spending habits. I have used it before. It is tied to Dave Ramsey so there is his Baby Step lingo associated with it. YMMV.

As for that video, that also sounds a lot like me. I really struggled in college to stay motivated and engaged in lectures. My daughter is also exhibiting this trait.

Thanks for sharing!

 

[ThatNickGuy]

Sorry to necro this thread, but I was recently pre-approved for a personal line of credit through one of my credit card providers. I was thinking of using it to clear my credit card debt since the interest rate would be much lower (21.99% vs 8.15%). But I don't know how much it would help me. I still have...a lot of debt.

 

[PatrThom]

Reducing the interest rate on the existing debt is always a good thing...IF you remember not to accumulate additional debt.

--Patrick

 

[drawn_inward]

Yeah, I used the card-surfing trick to ride 0% intro on new cards and switch balances to new cards when intro APR went away. It helped me for sure. But the biggest help was to not ever activate the cards. I pretended like they didn't exist. It worked pretty well for me.

 

[GasBandit]

A lower interest rate is definitely worth pursuing, and 8.15% is a VERY good rate for a personal loan. The first thing I did when I racked up $14k in vet bills last month was get a personal loan from my bank so that I could cover it at 10% instead of 23%. If it's something you anticipate taking years to pay off, you absolutely want to do all you can to jockey down that APR.

Just, as Pat said... remember not to accrue more debt while you do. Stop using the credit card entirely the moment you can't pay your entire balance each month.

 

[Bubble181]

The difference between those interest rates is ENORMOUS, especially if you can't afford to make substantial payments.
Now, for my ease of mind I've assumed they calculate interests yearly and you pay yearly - obviously, most likely both would be monthly but it's a bitch to properly factor that (well, there's probably an Excel formula to do just that, but I'm not an expert).

Let's draw it out for a $10K debt.
On the left - no payments at all. After 14 years, at the high interest, you owe them $160K! At the lower interest, $30K. Both are terrible, but there's still a huge difference.
On the rightmost - $2400 payment per year (aka $200/month you're setting aside per 10K debt). Here the difference is pretty big - but you're still getting there. You'll have paid off either $12.6K (over 5 years) or $30K (over 12 years) but the debt is gone.
In the middle is the stinker though - and the problem a lot of people with "bad" debt (typically student loans they couldn't make down payments on in the first couple of years) face. You're paying off $100 for every $10K you're in debt. Seems reasonable. After 14 years, you're finished paying off on the 8.15% - having paid roughly 17K. On the 21.9%, though -you've paid off $16800 on your $10K debt and you're still deeper in debt than you started off.

Now, again - this is just a quick whip-up and doesn't account for a host of other factors (tax credits/breaks for debt, monthly instead of yearly payments and interest calculations, "management costs", fees,....) so don't take this is anything more. I just wanted to say that getting your interest down - and, hopefully, consolidating your debt as much as possible - are great moves. I know I live in what is a near-communist country according to your southern neighbors, I don't know what the situation is like in Canada, but there are (here, for free - YMMV) government entities and services that can help you with working things out - not necessarily debt forgiveness, but a payment plan that's actually achievable and will get you out of the hole without paupering you.
Debt - even big debt - doesn't have to be crippling. It's an enormous stressor (well, to me, at least) and can most assuredly push you deep into Depressionville, but it doesn't have to be. Depending on how much assistance may be available to you, and how bad your debt is, you really can try to make a clear plan that will lead you upward and onward and get you out of it in a number of years (or at least, ease the burden a lot).

 

[Shakey]

I consolidated my CC debt into a personal loan, and what helped me more was being able to see the end. Having a loan with a term showed me that if I can stick to my payments, and not rack up more debt, in X number of years I will have it all paid off. It was a huge relief, and seeing the amount actually go down over time feels so much better.