Financial Abuse Confession

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Have you (or anyone you know) been in an abusive relationship?  I have.

In light of all of the attention regarding Domestic Violence and abuse brought about by the NFL Player Ray Rice’s video, showing him physically abusing his then fiancée now wife; it reminded me of the abusive relationship I was in several years ago. This abusive relationship was not with my significant other. It was with my financial institution. I was in a financially abusive relationship with my bank and it was painful.

So now I am sharing my Financial Abuse Confession, why I stayed, but more importantly what I did to escape the financially abusive relationship. My hope is that my transparency with this experience will help someone escape their financially abusive relationship before it causes major financial damage.

I BELIEVED I WASN’T WORTHY

There was a period of time when my credit was “colorful” and less than 600. Because my credit score was so low and with everything I knew about credit, I believe that I was not worthy of a reasonable interest rate and IF I could get approved for a loan, the rate was in the double digits.  Because of what I believed, when I applied for a car loan and was offered 22%, I took it. Honestly, I was just happy that I was approved. The payment was over $600 per month for a loan less than $30,000 for a car worth less than that.

Why I stayed. I convinced myself that I would not be able to get a loan with a better rate anywhere else. Besides, I was making the payments on time and it wasn’t really a financial burden …yet; so refinancing wasn’t my priority.  I also stayed because I was scared of rejection. I didn’t want to go through the embarrassment of applying for a loan somewhere else and getting declined because of my crappy … I mean “color” credit.

What I did.  I got the hell out! It was when I looked at my loan statement and saw the amount of interest I paid, not to mention the fact that all of the payments I made barely put a dent in the principal balance. I was pissed! I got up enough nerve to go to a local credit union to share my situation and apply for a loan. That credit union understood my plight and gave me shelter as a new member (customer) by saving me from that high interest rate loan with a loan that was more than half the rate of what I was paying for almost two years.

I THOUGHT I WAS BEING PROTECTED

I relied heavily on Overdraft Protection. Every time I did a transaction with my debit card, it was approved, whether I had enough money in my account or not. I believed that overdraft protection was my Protector. It started out just covering my money mishaps every now and then to being my life line in between paychecks. Instead of using overdraft protection once or twice a month, it turned into three to four times a week. Did I mention that the overdraft fee was $30 per transaction? You do the math.

Why I stayed. It was my banking back up. I knew as long as my paycheck satisfied the negative balance, the overdraft protection would be available when I needed it during the next pay period. It also saved me from the embarrassment of being declined at the checkout line.

What I did. I checked myself. It was the day I got paid but I had $500 less deposited in my checking account because it was eaten up by my $150 negative balance and $350 in overdraft fees. I panicked. There was no way I could pay all of my bills with less money. After I finished crying, I contacted my bank to turn off the overdraft protection. I also cut out extracurricular expenses, like eating out every day, took my breakfast and lunch to work and cooked dinner. This alone saved me over $200 during that pay period.  I also contacted my lenders to request a payment deferment for one month due to a financial hardship. The two lenders that approved my payment deferment request were enough to make that pay period less financially painful. By creating and following a spending plan, I ended up having enough to pay my expenses and save.

I’m not saying that everything that I did will exactly work for you. But I am saying that there is HELP for those being financially abused and getting their assets kicked with high loan rates, low deposit rates, high fees and poor customer service.

If you are being financially abused, prepare yourself and plan your Exit Strategy as soon as possible.

I look forward to being a resource to help you through my pain, passion and purpose.