Why We Debt : Part 1

Girl, Get Your Credit Straight!: A Sister's Guide to Ditching Your Debt, Mending Your Credit, and Building a Strong Financial Future
by Glinda Bridgforth

Is "retail therapy" your favorite pastime - even though you really can't afford it? Do you ignore the balance on your credit card statements, vowing to pay them off at some point down the line? Is your debt preventing you from living your dreams - like buying a home or starting a family? If so, girl, it's time to get your credit straight!

These days, with easy access to multiple credit cards and glossy advertisements that entice us to spend at every turn, it's all too easy to start racking up debt - and even little slip-ups can lead to real damage over time. In this highly practical follow-up to her bestsellers Girl, Get Your Money Straight! and Girl, Make Your Money Grow!, financial expert Glinda Bridgforth delivers a power-packed plan for paying down debt, repairing your credit score, and securing your financial freedom - along with a future that makes your heart sing.

Beginning with simple, engaging exercises to help you assess your spending habits and get clear about what you owe, Girl, Get Your Credit Straight! presents a detailed road map for eliminating debt, one step at a time. You will learn how to:

• Devise a system for tracking expenditures, anticipating end-of-month shortfalls, and paying bills on time, every time
• Find ways to supplement your income
• Consolidate loans to pay off debt faster, decrease stress, and save time and money
• Negotiate with your creditors to come up with a payment plan that works for you
• Discover the best loans to use for refinancing debt or making major new purchases
• Understand how credit bureaus work--and take steps to improve your score

Filled with Bridgforth's warmhearted wisdom and advice, and complete with worksheets, affirmations, and inspiring stories of African American women who've restored their credit and built new wealth, Girl, Get Your Credit Straight! is a fresh, empowering guide for any woman who wants to say goodbye to debt - for good.

Chapter 1

The Emotional and Cultural Factors at the Root of Your Debt Balance

It doesn't take a genius to understand that looks can sometimes be deceiving. A case in point is a sharp young sister named Deena. The classy, professional-looking twenty-five-year-old sat confidently in the office chair wearing a Donna Karan suit, Prada shoes, and carrying a $400 Zero Halliburton briefcase. She had just sailed through her first interview at a major Chicago-area bank. Mrs. Clark, the woman who would be her new boss, was clearly impressed with her. She indicated that there was every reason to believe she would soon be scheduling a second interview. For Deena, this news was a welcome relief.

"I'd done a lot of other jobs, like selling cosmetics and working as a waitress," Deena recalled, "but becoming a teller and working with money as a stepping-stone to an executive banking career just seems like the perfect fit for me." And it was coming right on time.

Years earlier, Deena had been through some rough times. As a nineteen-year-old college student, she became pregnant and gave birth to Tiffany. Although motherhood came as a surprise, she was determined to continue her education and expand her opportunities. Still, it was a struggle to care for herself and her bright-eyed daughter. Deena often found herself overwhelmed with the responsibilities of being a single mom and a part-time student. To make ends meet, she sometimes charged groceries and diapers - not to mention the occasional designer clothes and shoes. When she complained to her parents that her credit-card balance had risen to more than $2,000, her father suggested that she file for bankruptcy, as he had done years earlier.

"It's only $2,000," she told him, feeling silly about going to all that trouble for such a small amount of money. Yet between her father's confidence in the idea and an incessant TV commercial that advocated bankruptcy and promised "$99 sets you free!," Deena gave in. Filing for bankruptcy would get everybody off her back and get rid of the debt so she could focus on taking care of her child and continue to pursue her dream of obtaining a college degree.

Five years later, when she was twenty-four, everything in Deena's life seemed to be coming together. She was engaged to Clifton, a PhD candidate, and they were raising her daughter, Tiffany, as well as a new son, Marcus. But Deena's debts started to climb again. Her credit-card balance was up to $1,000 and she owed $500 on her cell phone. As a student, Clifton wasn't bringing in much money. And Deena, with a part-time job of her own, was just helping them get by. Their fights over money got heated, and after another year they decided to split up. Deena was left scrambling again.

"Clifton always cried broke because of his soaring educational expenses, so only Tiffany's father provided any kind of steady child support," Deena recalled. "I ended up having to move back home with my parents. It was cheaper to live there, but I still didn't have enough money and I was still determined to finish those last few credits for my degree."

Then threatening letters started to arrive in the mail and bill collectors began harassing her on the phone. In the midst of this chaos, Deena still spent money trying to keep up appearances, in large part because she was self-conscious about being a never-married mother of two. She continued to dress impeccably as her children donned Baby Phat, Sean Jean, and FUBU. Deena made sure her clothing and her image were a priority. Now, with her second interview at the bank pending, Deena could finally imagine a day - not far in the future - when she could put the struggles behind her.

A few days later, Deena sat in her car in front of her daughter's school, enjoying the sunshine and waiting for the final bell to ring. Her cell phone rang instead. It was Mrs. Clark, the woman at the bank who'd interviewed her. Deena broke into a smile.

"I'm afraid I have a bit of bad news," Mrs. Clark said. Deena braced herself. "It's your financial history. We always run a credit report, and there are a few things that, well ... I'm afraid we won't be able to move forward. I hope you understand."

Deena thought about her past bankruptcy and the new bills that had just gone into collection. "Of course, I understand," Deena assured her, trying to sound pleasant, even though she burned with embarrassment and disappointment.

When she hung up the phone, the typically cool-as-a-cucumber Deena fell apart. Then she looked up and saw her daughter skipping toward the car. Once again, she composed herself and accepted the fact that she was back at square one. "Here I'm supposed to be this role model for my daughter," she said to herself, "but the reality is, I'm an unemployed mother of two living at home with her parents." A week later, Deena came across my book Girl, Get Your Money Straight! By doing a little digging, she found my telephone number, called me, and said, "Glinda, I'm ready to clean up my credit. I need help."

Committed to Credit

For better or for worse, we Americans are married to our credit cards. It's simply the American way to make purchases. We do everything with them, and it doesn't take unanticipated medical bills or a job loss to entice us to abuse credit. Our list of charges may include picking up that slinky dress for the New Year's Eve party, getting our teeth cleaned, or paying for a round of drinks during happy hour at our favorite rendezvous spot. Overspending for luxury items, vacations, entertainment, eating out more, and buying unnecessary goods quickly racks up the bill.

Having credit, the ability to get something now and pay for it later, is a good thing. It makes life so much easier and more convenient. If we had to fork over all the money at once to buy a house or car, we might be living in tents and riding bicycles. If we had to carry around wads of cash to cover regular living expenses like groceries and gas for our cars, we'd all be targets for thieves. What if we flew to another city, checked into a hotel and rented a car, and had to drop several hundred dollars up front? How many of us would have the money to do it? How many of us would feel comfortable traveling with that kind of cash, even if we had it?

Yes, credit is a wonderful thing, but as with a box of Godiva chocolates, you can overdo it. As a former weekly guest financial expert on a popular call-in radio show in Detroit, I heard from countless people who had run up sky-high bills and then had trouble repaying them. Even the most polished and successful-looking women are often in debt up to the highlighted tips of their hair. And just like Deena, they eventually come to realize that in today's financial world, your credit is your credibility. People are constantly scrutinizing your credit history, assessing your character, and, at the same time, determining whether they want to deal with you or not.

So if we know logically that debt is bad, that we shouldn't spend beyond our means and run up credit-card bills, why on earth do we do it? The answer lies in a complicated web of societal and personal factors that conspire to get us to spend, spend, spend - without a plan for how we will ever pay it back.

Copyright © 2007 by Glinda Bridgforth

About the Author

is founder of Bridgforth Financial Management Group, a company that emphasizes holistic coaching. In 2006, Glinda appeared on Oprah in a five-part series called "America's Debt Diet." The author of the bestsellers Girl, Get Your Money Straight! and Girl, Make Your Money Grow!, she writes articles for Essence and is featured regularly on television and radio programs nationwide. She lives with her husband in Detroit.