Compulsive shopper needs help before it gets too costly

DEAR BRUCE: My wife is 32, a terrific mother to our kids and a very loving woman. However, she has one flaw that is inching us ever closer to divorce court: She is a compulsive shopper. Every time she gets upset with me, the kids or life in general, she shops.

The problem is that she has very expensive tastes. We are now up to our eyeballs in hock for clothing, perfumes and other luxuries we simply can't afford. If she keeps this up, we will be forced to file for bankruptcy. What do you suggest? — Frustrated husband, via e-mail

DEAR FRUSTRATED: I suggest that your wife needs therapy in a hurry. This type of behavior is a sickness, no less than an alcohol or gambling addiction, or some other problem. It's just as real as pneumonia, but so much more difficult to understand because there are no physical symptoms.

There are organizations that deal with this type of thing. Please have the patience and the wisdom to get your wife the help she needs to overcome this compulsive behavior.

DEAR BRUCE: My stepdaughter was having a problem financing a car, and she asked me to co-sign a loan, which I agreed to do. To her credit, she has always sent in the payments on time and has never been late.

She has only a year to go before the car is paid for. I applied for a car loan in my own name, which I thought would be no problem, and was turned down. Not because of bad credit but because of the amount of money that "I still owe on her car."

This made me too debt-heavy when my credit cards and second mortgage were thrown into the mix. Now I am being denied a loan for reasons I have no control over. Help! — Reader, via e-mail

DEAR READER: I wish I could. You must understand that when a loan is co-signed, you are as responsible as the maker of the loan. From the lender's point of view, you can only take on so much debt.

Even though you are not actually making any payments on this debt, you are still responsible for it. If your debt ratio is too big, they turn off the spigot.

When you co-sign a loan, it's as if the money is being loaned to you. You have all the responsibilities but none of the rights.

DEAR BRUCE: We want to get a construction loan and build a house, acting as the general contractor. What are the pros and cons of this endeavor? — Reader, via e-mail

DEAR READER: The problem here is that, frequently, it is less cost-effective to be your own general contractor than to hire someone who has a good reputation in your area. The main reason for this: The general contractor may be able to buy a great many components for your house at a considerable savings that would be unavailable to you, because his company is a regular customer of the vendors. As a one-shot buyer, you are not going to get the same price advantage.

Building a home is not the easiest of tasks, and unless you devote a good deal of time to it, you will find it is simply not cost-effective to do it yourself. If you insist on proceeding, however, get on the Internet to find the available resources and necessary insights.

Most importantly, familiarize yourself with the selection of subcontractors in your immediate area. Reputations can sometimes be misleading, and one bad subcontractor can wipe out any possible savings that might otherwise be reaped.

Bruce Williams is a columnist for the Newspaper Enterprise Association. Send questions to Smart Money, P.O. Box 503, Elfers, FL 34680. E-mail to Questions of general interest will be answered in future columns. Personal replies cannot be provided.

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