Grace, a 38 year old mother of two and teacher, bought a home in late 2006 during the housing boom. She was talked into a no money down, adjustable interest rate mortgage with interest only payments because that made the home affordable for her. She did not anything about loans or interest rates. She had some savings which was mostly earmarked for gifts for her children. She was blinded by the excitement of being a home owner, having a place for her children to grow up. She spent her time remodeling her new place. She racked up $25,000 in credit card debt. She called her mortgage broker and he suggested a refinance where she could take out equity to pay for the credit cards. She then had a new two year adjustable loan. The spending pattern on the credit cards continued. It had become a habit because it was so easy to use them.

Grace was not good about opening her mail or paying her credit card bills on time. She was so busy with her children and her job the mail was not a priority. Grace switched from teaching at a private school to a public school in 2007 because it was closer to her new home. The less time she spent commuting the more time she got with her children. In 2010, the value of her home dropped 30% from the purchase price. She was underwater on her loan because of the housing market and because she had taken out $25,000 of equity to pay off her debt. Then her mortgage had adjusted. Now she needed to pay more interest and she realized that her principle had not decreased at all. She called her mortgage broker, but her home value was less than the loan amount so she could not refinance.

Grace was in a financial mess. She had listened her mortgage broker and real estate agent. She thought she was doing everything right. She had a home it was supposed to be the American Dream. It felt like a dream - no, a nightmare. Grace was burdened with credit card debt, a mortgage she could not afford, a mortgage balance that was not decreasing, a spending habit that was more than she was making and then she heard from the news that layoffs might be happening in her local school district. She felt like the whole world was coming down on top of her. Grace felt depressed and scared. She was ashamed she had not paid closer enough attention to her money, to her spending or learning about finance. Grace entered my office she explained, "I'm a failure!" Does this story ring a bell?

I have heard this story from hundreds of clients as a financial advisor. Everyone was caught in the crux of the financial crisis on Main Street. Your friends and neighbors, relatives and coworkers, it was all over the news. After going through the healing process of accepting and forgiving yourself, it is time to step up to the plate and OWN those mistakes.

See my website for a FREE guide to help you start on your emotional healing so you can also heal financially. Visit our website for your FREE Seven Step Guide to Financial Recovery at www.hdpriceinc.com.