2009 was an extremely challenging year for both Michelle and me. Among the many issues we faced that year, one of the most painful was the difficult financial situation we’d put ourselves into: We were $105,000 in debt and about $300,000 upside down on our house by the end of that year. There were a number of factors that contributed to this, some of which had to do with the economic downturn and the collapse of the housing market, but more had to do with our lack of awareness, understanding, and responsibility with our money.
Credit Image: Alan Levine on Flickr
I grew up without a lot of money. My parents split up when I was three; it was 1977 and my mom hadn’t worked much in the eight years since she had gotten pregnant with my sister, Lori. My dad made a decent living as a radio announcer, but with him gone, my mom was forced to take care of us, find work, and figure out how to navigate life as a single parent, which, as a Catholic girl from Rhode Island who didn’t have any family in California, wasn’t easy.
My dad, who had been pretty actively engaged in our lives the first five years after he and my mom split (we’d see him every other weekend), lost his job in late 1981 when his bipolar disorder got the best of him. We no longer saw him on a regular basis—he slipped into a very deep depression and stopped paying child support. My mom had recently started working for herself at that time as a wholesale sales rep for a few companies that made fashion accessories. She was trying to get her business off the ground so she could work for herself and have flexibility with her schedule. She was doing the best she could to raise us without much support from my dad—emotionally, practically, or financially.
One of the first and most poignant memories I have of realizing we didn’t have a lot of money is of one night during a major rainstorm in February of 1982, just after my eighth birthday. The rain had gotten so intense that the ceiling in our living room started to leak. I remember initially thinking it was fun as my mom had Lori and me run into the kitchen to get some pots and pans and put them down on the floor to catch the water. In the midst of my laughter and excitement, I looked at my mom. It didn’t seem like she was having much fun. All of a sudden, she fell to the floor and began to sob. Lori rushed over to her to comfort her, and I followed, confused by what was going on. She looked up at us through her tears and said, “I don’t know what we’re going to do.” She then told us we didn’t have the money to take care of the leaky roof on our house. My mom was scared and overwhelmed, and, in that moment, so was I.
Over the next few years, and throughout most of my childhood and adolescence, money (or lack thereof) became a major source of stress, worry, and disappointment in my family. I heard the words "we can’t afford it" so often as a child that by the time I became a teenager, I mostly stopped asking for things. While my mom’s business did grow a bit, we essentially lived hand-to-mouth, and it was hard. We had no savings, no college funds, and no financial plan of any kind. We didn’t go on vacation, and when things around the house broke, they often weren’t fixed or replaced. I was constantly aware of what many of my friends had and what they were able to do in comparison to me.
I got into Stanford and was able to go, thanks, in part, to my success in baseball and also to the enormous financial aid package I was offered. While I wasn’t super-focused on money, I definitely wanted to have a different and more abundant financial experience when I got older. I hoped one day I would be rich, and part of my motivation to make it to the major leagues was to dramatically change my financial reality. When I got drafted by the Kansas City Royals in 1995 after my junior year at Stanford, I received a $35,000 signing bonus. It was the first time in my life I actually had a little money of my own. I was elated, but also scared—not sure what to do with it. After buying a car and a few other things, paying my taxes, and trying to live on the very small amount of money I was paid in the minor leagues, most of that money was gone within a year. When my playing career ended just a few years later, without having made it to the big leagues or making much money, I was forced to figure out what to do with my life and how I would make money. I had no clue about either
In the summer of 2004, after Michelle and I had been living together in San Francisco for two years, we got engaged. We were excited about getting married, although scared at the same time. Even though I was starting to make a little bit of money and my speaking and coaching business was gaining some momentum, we didn’t have any money saved. In fact, we were both in debt and didn’t have a financial plan at all. Even with our lean financial situation, given the economic climate at the time, we were pre-qualified for a $650,000 home loan and were told we could “buy” a house without having to put down any money, which is what we did in early 2005.
Although I didn’t feel ready to buy a house and didn’t think we were in a healthy financial position to do so (which, in hindsight, we weren’t), my decision to go ahead with it was based almost completely on fear. I was scared that if we didn’t buy a house at that time we’d get priced out of the market given how much home prices were going up. I was scared to disappoint Michelle because she really wanted a house as we were getting ready to get married and hoping to start a family. I was scared to admit my fear and to acknowledge that I didn’t think I was ready for the responsibility of owning a home—both financially and energetically. I was scared to admit that I wasn’t really sure how to make money, save money, combine my finances with Michelle’s, and become the primary breadwinner for our family. My deepest fear was that I would continue my legacy of financial struggle and always live hand-to-mouth, since that was all I’d ever known.
Over the next few years, I did the best I could to pay the mortgage and all of our bills, expand my business, and provide for our family. Life was intense and exciting—two babies, two books, lots of travel, and an enormous amount of activity. Although things were going well and I was making a lot more money, we kept spending more to keep up with our expanding life and my expanding business. I felt a great deal of pressure and things felt out of control, financially and otherwise. We didn’t have a plan and I still didn’t feel like I knew what I was doing, but there didn’t seem to be time to slow down to think about it, talk about it, or do anything about it. I figured if I just kept making more money, it would all work out.
Then 2009 happened. Not only did I lose a great deal of work to the economic meltdown (many of my corporate clients canceled their events and cut their training budgets), I also invested a lot of money into my business and the launch of my second book. The timing was terrible for us, and by the end of that year we found ourselves in a real mess. And while it didn’t happen overnight, we were humbled by how quickly it seemed like we had put ourselves in such a hole, baffled by how we got there, and totally confused about how to get ourselves out. It felt eerily similar to that moment when I was eight, on the floor with my mom and sister surrounded by pots and pans.
Somewhat miraculously, less than two years later, we were completely debt-free, out from under the weight of our house situation, and on track in a positive direction with our finances. How we were able to do this was based on a variety of things. And while there were a lot of practical things we did and there was a lot of hard work involved on our part, the two most important things we did were on a personal and internal level: We learned to get real and to have compassion for ourselves.
Getting real wasn’t fun or easy, especially at first, and it was quite humbling. We had to look at the reality of where we were, get specific about the numbers themselves, and investigate how we’d gotten there in the first place. Basically, we’d consistently spent more money than we’d made for many years. We also had not done a very good job planning or tracking our finances, which seemed increasingly complicated for us now that we had a family of four, a house, and lots of new expenses, as well as a business that generated significantly inconsistent amounts of income and required large chunks of money to be spent at certain times.
We started talking about our situation, in detail, to each other and to a few important people close to us. We told them about our debt, our house, and our specific challenges. We did this with people we felt we could trust and who might be able to help. It felt scary, embarrassing, and vulnerable, but at the same time, also liberating and empowering. Getting real like this forced us to “sober up,” start taking a deeper level of responsibility, and begin the process of turning things around financially.
We also did our best to have compassion for ourselves and to look for the gifts in the situation. More difficult even than the specifics of what we were facing financially was the emotional impact. Both of us were dealing with an enormous amount of shame, embarrassment, guilt, and more. Michelle felt guilty that she had been so adamant about us buying our house when we did, which in hindsight we realized was one of the key factors that caused the mess we were in. She also felt a certain degree of helplessness due to the fact that she was at home taking care of the girls and couldn’t directly impact our income. I, on the other hand, felt like a loser and blamed myself for our being in this bad of a spot. I clearly wasn’t making enough money and since that was one of my primary responsibilities in our family, I felt embarrassed and like I was letting down Michelle and the girls big-time.
We both realized that the harsh judgments we had about ourselves, which we would sometimes project onto each other, were not only harmful but also were making a difficult situation even worse. We each dug deep in search of self-compassion, did our best to forgive ourselves and each other, and made a commitment to continually look for the “gifts” from what we were going through. We both did a lot of inner forgiveness work, in addition to outward practical work (with coaches, mentors, and others), that helped lead not only to our financial turnaround, but to our personal healing, as well.
Money is one of the most emotionally charged issues we contend with, especially these days. Many of us have some real baggage about money that we bring with us into our relationships, our work, and most aspects of our lives. And, because of our feelings of shame, guilt, confusion, judgment, fear, arrogance, and embarrassment about money, we often don’t talk about it in a real way. Our lack of comfort with authentic discussions about money is one of the biggest reasons it continues to be such a source of stress and confusion for so many of us. We also tend to be very secretive about money. As the saying goes, “We’re only as sick as our secrets.”
This is an excerpt from the new book, Nothing Changes Until You Do, with permission. The book is published by Hay House and is available now online or in bookstores.
Leave a comment here on my blog about how this relates to your life and/or any questions you have about it.
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