After graduating from college in 2001, Andrea Blackwell diligently paid off her credit cards in full every month . . . for a while.
Pretty soon, though, it became easier to pay just the minimum. Then it became easier not to even open her statements.
"I knew approximately what I had to pay (to cover the minimum payment), so I would send that in," recalls Blackwell, who lives in Portland, Ore. "I just didn't want to know how much I owed."
Those unopened bills or bank statements are a powerful warning sign, a not-so-subtle hint that you're headed for trouble, even if you're not officially there yet.
Here's the thing, though: Financial problems almost never get better if you ignore them. They tend to fester and multiply in the dark, even if the news is bad when you turn on the lights.
The cost of refusing to look
Blackwell later began skipping payments, at one point leaving her account 90 days overdue.Blackwell's refusal to confront her debt cost her dearly. Her credit was trashed. Late payment fees, credit insurance and continuing purchases swelled her balance until it was over the limit and the credit card issuer shut down the account.
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She worked out a payment plan, got a secured credit card and eventually started blogging about her journey from frivolousness to frugality at Modern Tightwad.
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When she recently came across some of the unopened bills from that period, she started to cry. Every $40 late and over-limit fee felt like an indictment.
"It's almost as if I didn't care enough about myself" to deal with the situation, Blackwell said. "Once I started feeling responsible for someone other than myself, then I did something about it."
6 signs of trouble
Few of us want to pore over the details of our finances 24/7. And not opening your retirement statements after a bad quarter may be simple self-preservation.But if you find yourself constantly avoiding money details, you could be setting yourself up for financial ruin.
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Here are six warning signs that you're headed for trouble:
- You don't open bills shortly after they arrive.
- You ignore e-mail or text alerts from your bank or credit card companies.
- You have no idea how much money you owe.
- You're often surprised -- and not pleasantly -- by the balance in your checking account.
- You've paid more than one late or bounced-check fee in the past year.
- You've skipped a payment because you "forgot" about the bill.
Actor and comedian David Beach of Pasadena, Calif., said his financial denial is situational. When the money is flowing in, as it was this summer, he pays attention to his bills and bank balances.
"But I'm back to hand-to-mouth living soon," Beach said. "I go through phases of 'scared to look.'"
You may feel that tending to your money is pointless because you can't improve your financial situation right now. But you can usually keep it from getting worse.
Continued: Do yourself a favor and start now
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