12-Step groups help debtors understand money

When someone from Debtors Anonymous first asked Tom what his problem was, he promptly responded that his problem was his wife. He said that she was buying too many things. However, the more Tom learned, the more he realized that the fault was his own and that he could no longer blame his wife for his problems.

Members of Debtors Anonymous say it is important that the public is aware of them so that people who need help with their financial addictions know where to turn. Debtors Anonymous (DA) is a national non-profit organization based on the Twelve-Step principles first developed for Alcoholics Anonymous. It helps people to understand money and use it successfully.

Tom heard about DA from another Twelve-Step group that he was attending. The things he heard about DA made him realize that the issues they were discussing might apply to him personally. He had an informational meeting with a DA member at a coffee shop and decided that he had a problem that he needed help to overcome.

“I would build up huge bills on my credit card over the last 33 years and then I would pay it off by taking a second mortgage on the house or begging my family for money. I would swear that I would never build up that kind of credit card debt again, but then I would start building it up again,” Tom said. “I couldn’t live within my means even though I had a good paying middle class job.”

DA has a list of questions Tom and a friend from the other Twelve-Step group started going through every day together as a form of accountability. They would also tell each other how much they spent each day and what they planned to spend the next day. This helped them both with their spending habits.

Other members of their DA group were so impressed with what Tom and his friend were accomplishing, that some of them starting modeling the idea of calling someone on a daily basis for accountability and support.

So far, Tom is successfully overcoming his addiction. He has not acquired any unsecured debt since January 1, 2004. Unsecured debt does not require any form of collateral. The only debt he has now is secured by collateral such as a car loan or a home mortgage.

Tom said his success has gone beyond overcoming debt. The changes have also improved his marriage and his career. Tom and his wife no longer fight over money or stress out about being so deep in debt. Tom was also able to utilize some of the concepts from DA to apply to his job. He realized that he was not being as disciplined at work as he felt he should be. While he spoke daily with his friend about his spending, Tom decided to give a daily account for how he was using his time at work. He was able to regain discipline and win awards at work for his efforts.

The first steps

Sarah, another member of DA, was so deep in debt that she owed half of her gross annual income and was teetering close to bankruptcy. She embraced what she learned from DA. The DA philosophy is that in order to improve your finances, you have to first take care of yourself. She explained that “you start by paying the minimum balance while you save up enough money to have an emergency fund and make sure that you are taking care of the immediate needs of yourself and your family.”

After members are able to save for their emergency fund and provide for the needs of their family, they are then able to save up for fun things like vacations and home improvements. They generally choose to pay for things with cash, prepaid credit cards or debit cards so they’re not tempted to go back to their old habits.

Sarah has been a DA member for 20 years. She thinks that “a lot of people have money problems, but they don’t know about DA which is a place they can get help. It’s completely free. It’s completely anonymous.”

Signs of Compulsive Debting

Found on http://www.debtorsanonymous.org/help/signs.htm

  1. Being unclear about your financial situation. Not knowing account balances, monthly expenses, loan interest rates, fees, fines, or contractual obligations.
  2. Frequently “borrowing” items such as books, pens, or small amounts of money from friends and others, and failing to return them.
  3. Poor saving habits. Not planning for taxes, retirement or other not-recurring but predictable items, and then feeling surprised when they come due; a “live for today, don’t worry about tomorrow” attitude.
  4. Compulsive shopping: Being unable to pass up a “good deal”; making impulsive purchases; leaving price tags on clothes so they can be returned; not using items you’ve purchased.
  5. Difficulty in meeting basic financial or personal obligations, and/or an inordinate sense of accomplishment when such obligations are met.
  6. A different feeling when buying things on credit than when paying cash, a feeling of being in the club, of being accepted, of being grown up.
  7. Living in chaos and drama around money: Using one credit card to pay another; bouncing checks; always having a financial crisis to contend with.
  8. A tendency to live on the edge: Living paycheck to paycheck; taking risks with health and car insurance coverage; writing checks hoping money will appear to cover them.
  9. Unwarranted inhibition and embarrassment in what should be a normal discussion of money.
  10. Overworking or underearning: Working extra hours to earn money to pay creditors; using time inefficiently; taking jobs below your skill and education level.
  11. An unwillingness to care for and value yourself: Living in self-imposed deprivation; denying your basic needs in order to pay your creditors.
  12. A feeling or hope that someone will take care of you if necessary, so that you won’t really get into serious financial trouble, that there will always be someone you can turn to.

Recognizing the signs

Mark is a veteran who accrued $128,000 in debt in three years. He found out about DA when he was in Gamblers Anonymous. He decided to switch to DA so that he could get a handle on his finances as a whole. He joined DA in 2010 where he learned what unsecured debt was. He thought that any time you bought something, the credit card company could just take it back and the debt would be cleared. As he put it, he discovered that “credit card debt is the worst kind of unsecured debt, because it is readily available and easily attained.”

Mark was extremely nervous about going to his first meeting. Someone read aloud the Signs of a Compulsive Debtor and he realized that each one was true for him. He continued going to meetings and said that the most beneficial thing about the group is “the support. The fellowship of DA is a must and is really great. Every meeting is a boost of confidence from hearing other people tell similar stories. This showed me that I’m not alone and that other people have the same problems.”

Laurie also heard about DA from another Twelve-Step program, but she waited for about a year and a half after hearing about it to finally attend a meeting. She explained that she felt “guilt and shame and remorse. I should be able to handle this because I’m an adult. I knew I wanted to jump in and start the program, because I was ready to make a change.”

Having heard great things about the program, Laurie felt very hopeful that the program would help her to get rid of the $20,000 in debt she accumulated. She said she didn’t understand “what the word ‘afford’ meant. I could set a budget, but I couldn't stick to it.” So she called someone after the first meeting and asked if that person could sponsor her.

A sponsor serves as an accountability and support system. Members often speak with their sponsor every day or once each week. They can have just one sponsor or several sponsors.

Laurie has now been a part of the program for two years and still calls someone each day. She has three to five people who she checks in with on a weekly basis. She is also paying it forward for the newcomers to the group as she calls to check in with them to see how they’re doing. She asks them if they have any questions or if they need any support with what they’re going through.

Finding a group

There are five different groups that meet throughout the Twin Cities. The meetings are at different times and locations to accommodate various schedules. Each meeting has information about what is going on in DA and a member of the group normally speaks about their experience and how they are overcoming their struggles. Meeting times and locations can be found on www.debtorsanonymous.org under the tab that says “Find a Meeting” or local details can be found on www.daminnesota.org.

They have also formed an Intergroup, involving members from all the groups from the area who put on workshops for group members wanting tips about strengthening their meetings. They have special events on weekends at various venues. Events are announced at meetings and on the local website.

DA has a book called A Currency of Hope that is also available as a resource, describing the DA program and including 38 success stories from members.

“Debt can really ruin lives,” explained Laurie. “Not only can you improve your financial situation going to DA, but you can also get to the root cause of why you were doing what you’re doing.”

(Northeaster Editor’s Note: The names of the people interviewed for this story have been changed to protect the privacy of the DA members and to be consistent with the organization’s privacy policy, which requires members to remain anonymous when speaking with the media.)

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