I was so scared when I finally sat down to look at all of my credit card debt in 2007. I knew I had a lot, and honestly, I had a good idea that it was bad.
I had started supporting myself at 16 and moved on to college knowing that I would put myself through. Once in college though, I met a bad influence who started bemoaning all their credit card debt, and as silly as it seems now, it looked to glamorous. To have “real” problems — to have moved on from the little woes of college, onto the adult thoughts of debt and minimum payments. And so, I started to dig myself into debt.
Out to dinner with friends? No worries, guys — I’ll get it, plus an extra generous tip. New bikini? Of course! With a bag, sunglasses and a towel to match. Nothing was too much, and I didn’t quite get the memo that I was living dangerously beyond my means. I remember one night, when I was rushing to an ATM, so I could withdraw cash on a credit card, to deposit in my bank account to pay a credit card that I thought maybe this was not the only way. I remember that night so clearly, and thinking that I was literally robbing Peter to pay Paul (though not my Paul, I wouldn’t meet him until a few years later).
My sister gave me a copy of Rich Dad, Poor Dad when I graduated college in May of 2005. I gobbled it up, but it wasn’t enough — I wasn’t ready. First I went through 2 difficult years working in politics and earning around 30K and living in one of the most expensive areas of the country. At that point, I wasn’t thinking of gorgeous dinners, only about how to pay for basic groceries and my gas bill while I drove an hour each way to and from work.
Then finally, a break through. It was the summer of 2007 and I decided I didn’t want to continue on this path of self destruction. I’m not sure what it was that pushed me over, but I had decided that I was done.
I sat down with my (then) lovely boyfriend and weeded through all the credit cards. I devised a plan to put the entire balance on 0% credit cards (lucky me, my credit was still good enough to do this) and pay them off, in order of when the 0% promotion would run out. I was putting more than half of my salary to accomplish this, but I was also beginning to sleep better. This process started in July of 2007. I will have everything paid off, along with comfy savings, as of July 4, 2008 — my own Independence Day. Promise, I did not plan for the 7/4 date, it just has worked out that way with the aggressive pay-down approach I have taken.
The 1st credit card was easy — I paid off $2,500 and felt proud. The next one, my Discover card, had $1,600 but I was getting my holiday bonus which made that one feel easy too. When I looked at my Chase card, the one with the largest balance, my reserve quaked. I had started off at $4,200 and just by paying the minimums each month while aggressively attacking the credit card whose 0% was going to run out next, I had reduced it to $3,600.
Still, I was terrified. It was at this point that I really thought I could not do it, could not pay it down and might as well go back to my old ways. But I hung tough and decided to just make the payments that I had planned for myself and would see how it went. On Friday, April 18, 2008 I will have paid off the Chase card. I have 3 more cards to go.
There have been slip-ups too. Days that I will wander into Target and buy things I don’t need; but those days have decreased rapidly. And I get a kick out of being able to go into a store, look, and not buy one thing. The days when I run over my budget, I write down how much I owe myself, and I take it out of extra bonuses or other unexpected money. When I first wrote this post in April of 2008, I owed myself $12.15.
If you fail to plan, you plan to fail.
I am working to put together my future, and it feels so good. My sweet boyfriend will be starting law school in the fall, and we are planning on buying our first piece of real estate so we can live close to the law school. My mom would always say, if you fail to plan you plan to fail. Growing up, that saying drove me crazy. But with a few more years under my belt and a bit more experience, I now believe that the only way you will succeed with anything is by planning goals. And the only way to accomplish your planned goals, is by taking the first step.
I have let the faith in myself guide me, it has been scary and hard at times, but it is well, well worth the reward.