for many, especially in the first few months of recovery, dealing with the debt that has accrued while also learning how to manage the usual bills associated with life and living is priority number one.
Tori Utley holds an MBA as well as an addictions counseling license in Minnesota. She is the founder and executive director of More Than an Addict, an organization that works to reduce stigma related to addiction by promoting employment, education, and entrepreneurship among people in recovery. She is also the founder and CEO of Tinua, a startup developing a digital platform and mobile application to allow unused gift cards to be donated towards charitable causes. Additionally, she is a contributing writer for Forbes and works with Mayo Clinic as a product manager, currently working with the Department of Psychiatry and Psychology on a mobile prototype for mood monitoring.
“Personal finance is a critical part of life that needs to be strategically and responsibly managed. Recovery gives the opportunity to bring newfound skills like organization and intention to personal finance, and thus ensures individuals are on the path to success in all parts of life.”
There are a number of moving parts in financial management, especially for someone who is working to keep an accounting of income, pay off debt, and pay incoming bills while managing to have some “fun money” as well.
“Individuals in recovery should aim to start small. Starting small still means starting somewhere.”
Simply acknowledging that finances require management is an excellent first step, and there are a number of next steps that can help you get the ball rolling in the right direction, including:
Says Utley: “Determine things that need to get paid off first, where your money is coming from, how you can save, etc., and then look at deadlines, goals, resources, etc. Having a written plan that is organized and well thought-out will bring perspective and sequence to the seemingly daunting task of financial management.”
It can help to physically write it out. List financial goals you would like to accomplish over time with the amounts to keep it straight in your head. For example:
The idea is that, over time, you have a snowball effect in which, as debts drop off, you have an increasingly higher amount to put toward the next debt, so even though it is larger sum to repay, it is just as quick to pay off as the smaller debts because you have more in hand each month to put toward repayment.
Says Utley: “It is important to remember not to be shortsighted with financial management and budgeting. Budget realistically – earmark a portion for everyday expenses, personal spending, paying off debts, and saving. Building up savings while simultaneously reducing debts will help build up wealth and financial stability in the long run.”
Stress is a common trigger in relapse, and there are a number of usual suspects that can contribute to ongoing stress levels as well as acute stress. Finances are certainly one of them, an ongoing and unavoidable issue that can often come with “surprises” in terms of unexpected bills and charges.
“When finances aren’t being actively managed properly or weren’t managed properly before recovery, stress can build up in a person’s life and lead to relapse. Knowing that financial issues are common triggers of relapse, individuals in recovery should stay motivated to be vigilant in managing finances and ensuring they are being responsible with the funds they have, the bills they need to pay, and saving for the future.”
For those who are concerned that having any amount of money available is in itself a trigger for relapse, there is always the option of looking to a sponsor, financial advisor, or trustworthy friend or family member to help manage the issue.
Utley suggests that these relationships be chosen carefully: “Whether this is a sponsor, mentor or family member, make sure the relationship is healthy and patterned with transparency where dialogue will be open and honest.”
Utley also suggests taking advantage of some of the apps, sites, and banking products that are designed specifically to help people manage their finances together with another person in support of their finances. “There is a company called True Link that has a product called the Next Step Card, allowing individuals in recovery to work together with loved ones through a secure debit card for financial management supportive of recovery. This will help with budgeting and spending.”
Though some end up enjoying working toward their financial goals and the freedom that comes with living with a budget to guide them, others find it tedious. They ask, “How long do I have to do this? When can I stop dedicating every penny to paying off debt and save?”
Says Utley: “Having a financial advisor, professional mentor, or sponsor supportive of recovery will help create a source of wisdom and guidance throughout the process of working to become financially secure. They can keep you accountable while still being available for questions and offering lessons learned that will keep you on track financially while still focusing on your recovery.”
Even if you shop in thrift stores, you may find that you are still spending more than you have to. Remember that every dollar you save not only lowers your debt but also lowers the amount of interest that accrues on that debt as you are in the process of paying it off. Essentially, by paying off your debt as fast as possible, your money is earning money for you by helping you avoid paying even more in interest.
Says Utley: “The recovery principle of one day at a time is fitting in personal finance – any accomplishment with personal finance takes time – becoming debt-free, paying off credit cards, building up credit – it all takes time. Patience and diligence are two principles from recovery that convey directly to financial management. The day-to-day wins of paying off debts or saving can lead to long-term successes of debt-free living or the buildup of savings and personal wealth.”