Hey there! My name is Ambus Hunter IV, and I am one of the Financial Counselors in the GamFin community. Each month, I will discuss a different aspect of my favorite subject: how to strengthen your relationship with money. Engage in the conversation, share your experiences, and let's grow together!
While a number of millennials find themselves in a financial hole as a result of the student loan crisis, I actually took a much different route: I gambled away my money.
Yep, back in 2011 at the age of 25, I stumbled into a problem gambling addiction.
The full story is one of Vegas glory, greed, and losing sight of who I was as a person, but I will give you time to cook your popcorn before diving into that story.
In short, over the course of about four months of playing roulette, I made a bunch of money, lost it, and then burned through the bulk of my savings while fighting a roulette addiction.
How much did I lose? I blew through $10,000 in less than a month. Other than the little bit I had in my Thrift Savings Plan (retirement savings and investment plan for Federal employees), I was broke.
In recognizing I had a problem, I (eventually) stopped gambling, took on two extra jobs, slashed most of my expenses, budgeted, and saved my way to recovering my finances. By the following year, I not only replenished the $10K I lost, but saved a total of $20K.
It was one of the most stressful moments of my life, but I am extremely grateful it happened. Why? Because through that nightmare, I learned a lot about myself, resilience, and why I needed a healthy relationship with money.
While my story had a "happily-ever-after" ending, it was not all sunshine and roses when I was in the thick of what truly felt like a financial crisis.
Aside from working to stop gambling, I knew I needed to repair the financial damage, and rebuild what I lost.
Below are a few of the steps that worked for me while I got back on solid footing. Certainly not an all-inclusive list that requires tweaking to fit individual needs, but it’s the path I chose.
For more tips on rebuilding after a crisis, check out this article by GOBankingRates that I and a few peer financial professionals contributed to.
Making sound decisions when in the middle of a personal financial crisis is easier said than done. But dealing with your situation proactively instead of reactively can keep a bad situation from getting worse. You don’t want to make any decisions from a place of temporary heightened stress that can result in long-term damage.
A good way to start is by limiting the damage and closing as many doors as possible to funds that might exacerbate the challenge. “This means not making any further withdrawals from savings or retirement accounts, and not using credit to make up for lost income,” said Michael Collins, CFA of Endicott College in Beverly, Massachusetts, and founder and CEO of WinCap Financial. One way to prevent yourself from spending is by freezing or “locking” your debit and/or credit card. In most cases, you can do this by going through your issuer’s website or mobile app.
I knew I was broke, but I needed to know exactly where I stood financially.
By pulling up online bank statements, I faced the reality of how much money I lost, and what was left across my accounts. Then, I wrote out all of my non-discretionary (needs), and discretionary (wants) expenses to see where my money was going. Other than the roulette table, that is.
While I didn't have any gambling, auto, or other personal debts at that time, you don’t want to skip over evaluating how much debt you owe, and to whom.
Microsoft Excel quickly became my friend in capturing bank balances across all accounts, current income, and expenses. This financial assessment, while a bit time-consuming, provided a clear picture of what I was working with. The visual also forced me to take accountability for my current challenge, which in a way, provided me peace that if I got myself into that mess, I could get myself out of it.
Once you know what you’re working with, you gain clarity on what’s needed to reach a goal. In my case, I wanted to replenish the $10,000 I lost through roulette. As fast as possible.
Based on my current income, I knew that getting there would take cutting my expenses, bringing in additional income, and saving aggressively!
On the expense side, I cut cable, internet, limited my driving to work, put myself on a strict grocery budget, and wore a hoodie while at home so I could lower the heat a bit. While in hindsight this may have been a tad extreme, my goal was to limit my spending to necessities.
Plus, I was 25 at the time so I could deal with it (lol). Don’t sacrifice your health to save a few pennies, but do be mindful.
For income, I picked up two extra part-time jobs. One as a mystery shopper, and the other as a brand ambassador for a marketing company. Again, my exact path isn't necessary to rebuild.
But, if you determine you need additional income, find a way. That could mean requesting a raise from your main employer, or part-time work.
Lastly, you must save all you can! Cutting expenses and earning additional income wont move the needle if you don’t aggressively save the difference. This is where having a clear vision, a plan, and discipline comes in.
Everyone’s path to financial recovery will look different, so the exact details of my recovery matter less than the main drivers that made the difference. Accountability, intentionality, and consistency is what makes any plan come to life.
By focusing on these elements, rebuilding after a crisis won’t be easy, but in time you will cross the finish line.
As a financial counselor, I help clients gain clarity on their vision, goals, and the healthy thoughts and behaviors needed to achieve their desired life. To talk more about how you can support your client’s financial recovery, join GamFin and book a counseling session with me.