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October 13, 2010

Money Shrink Makeovers

We sent a pair of successful professionals with serious wallet woes to a money therapist for some tough love about their freewheeling financial ways.

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hand with jewelry and money

Photo Credit: Bill Diodato

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Think you have issues with money? NYC-based money therapist Lora Sasiela takes two financially wayward women and points them in the right direction.

I'm Six Figures in the Red!
Danielle Liss, 34, lawyer, Las Vegas
INCOME: $100,000 plus bonus
SAVINGS: $0
DEBT: $142,000

I'm a stress shopper, and I've always had a thing for shoes. When life got crazy, I'd hit DSW on the weekend and buy a few new pairs. Then two years ago, my grandmother, with whom I was very close, suffered a massive stroke. After getting the news, I found myself at Saks, where I spent $1,300 on a pair of Valentinos, Cole Haans, Kate Spades, and two Choos. Two days later, I bought another pair of Spades and some Stuart Weitzmans. Thanks to shopping trips like that, plus student loans, I'd racked up $167,000 in debt. Just think about that number—it's a monster. But I didn't think about it much because when I did, I'd start shaking and get a stomachache. Though I never missed a minimum payment—not once—I just couldn't admit to myself what I knew deep down: I was a shopping addict.

A few months later, after I visited my grandmother in the hospice, I went on another shopping binge. I went directly to DSW because I just had to have a pair of gold peep-toe slingbacks. It was urgent; they would complete my collection. I was deeply grieving, and all I could think to do was buy shoes. Walking out of the store with them, I felt relief.

But it wouldn't last. Soon after, Citibank sent me a notice: They were tripling my interest rate to 27 percent. I couldn't pay it, even though I was making $100K plus bonuses as an attorney. I created a budget spreadsheet, but looking at it made me sick. Then a friend challenged me to blog about the entire experience. I realized then that if I was ever going to get out of this mess, I had to be honest with myself. So I started "The Danielle Deficit." Blogging about my spending problem was therapeutic and a really great way to hold myself accountable. My friends tracked my progress and cheered me on. I got credit counseling and learned to cut out shopping, vacations, and other frivolous expenses. I replaced my shoe-buying high with the debt-killing high. Last year, I paid off $20,000.

I still treat myself now and then at Kohl's (with coupons!). I feel so much happier and more alive now than when I dulled all my feelings with shopping trips. But now I've grown so obsessed with killing my debt that I'm not saving anything. My husband and I had a leaky sink a few weeks ago, and I was panicked because, dear God, what if we needed a plumber?! We should be saving for an emergency fund and retirement—and, someday when this is all over, for a nice Mediterranean cruise together.

The Shrink Says: Danielle is a compulsive shopper. If she goes right from the hospice to a shoe store, that's a clear attempt to self-soothe, to distract from an emotionally intolerable place. We talked about how she's made a lot of strides, but because she's white-knuckling it, she's at a high risk for relapsing if she doesn't explore what's behind the behavior. It's like going on a strict diet—it's not long before your face is in a chocolate cake. Danielle needs to start putting away a small sum each month, as little as $25, to establish the habit. She should read about compulsive shopping, to reflect on how she got here. And she needs a support network she can call when she's tempted to hit the mall.

Danielle's Takeaway: I want big savings and big debt payoff—right now! But I know I can't have both, so I'm going to start small and save $100 each month. I've tried Debtors Anonymous, and it didn't resonate with me because it felt too remedial. But I will explore joining a local money club. I also bought a book Lora recommended, April Benson's I Shop, Therefore I Am, about compulsive shopping. I'm going to start on it right after I finish the latest Jennifer Weiner, which just arrived in the mail.


NEXT PAGE: I Haven't Paid Taxes in Six Years!


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