Journey to Debt - Part 3 - Leading to the Now

(You can catch up here -> Part 1 - Student Live, Part-2 - Post Graduation)

Finally, in late 2008, the fruit of my attempts began to show. I had paid off all my store cards, paid off my lasik surgery bill, paid off my smallest major CC balance, and was only $3,000 from paying off the next card so I could tackle the largest one. And then, as soon as I started to breath a sigh of relief, I got laid off.

The amazing thing is, since October, my credit card balance has remained steady, my car and student loan balances have gone down, and I have a (very small) emergency fund (thank you severance)! My (seemingly) worst financial crisis turned out to be the best thing that could have happened to my finances. The minute we got laid off it all snapped into place. All those worries about finances and priorities just aligned. I suddenly understood the difference between "need" and "want". I realized my 30 pairs of shoes and multitude of dresses and skirts did nothing for me beyond the fleeting moment of excitement of wearing them for the first time.

There were still hard moments leading to the here and now. Making it through the holidays without touching my credit cards was by far the most difficult part. I, like my mom, have always been a very generous gift giver. I value and adore my family and friends, and I want them to know it! This made buying Christmas gifts on a budget very emotionally trying for me. In the end, I probably spent more than necessary, but at least I didn't touch my cards or my severance. That was a huge step for me.

Since the Holidays I've limited shopping to needs only. I've made it a point to not touch my remaining severance EVEN for bills. I have been paying for bills and groceries with my unemployment insurance (BF pays for rent) and I have only purchased 2 "cute" items (an adorable purse that was only $13 and dress for $16 both on major clearance).

The best moment came last week. I had an interview at a pretty cool company. Given that I have dropped 2 complete dress sizes since my last job hunt, I needed a suite jacket. I had a pair of great pants but no blazer. So I popped into the mall on my way to the interview, picked up a jacket that perfectly matched my pants and a pair of shoes that didn't make me want to kill someone from blinding pain. The total cost came to $200.

Normally, that sudden but needed expense, would have sent me into a worry induced migraine. But it didn't. I left my local mall with only what I needed in hand and with no anxiety about overdrafts or interest rates. It was amazing. After just three weeks of NOT shopping and NOT submitting to my wants and NOT putting myself in tempting situations and paying my bills FIRST I had learned (sort of) to manage my money.

I get it now; finally, 3.5 years after entering the "real world" I get it. I'm glad I did not get a job sooner because I believe I would have just continued my selfish spending habits. I'm ready to find a job now, a job I like, not just need. And I am confident that within 12 months of getting said job, I will be free of credit card debt, almost free of student and car loan debts, have a less-tiny emergency fund, and will be helping BF save for our wedding (and maybe rent, he'd love that!).

I know the challenges are far from over, but I finally feel I am appropriately armed to take them on. I plan to add a Part 4 to this series in 2010 telling you I made it out!

*Note: This is the final "official" part, but I'm sure there will be more on this is the future of LFMM :-)

Journey to Debt - Part 2 - Post Graduation

(You can catch up here -> Part 1 - Student Live)

I graduated with a mere $1,000 of credit card debt and about $12,000 in student loans. All in all, I did pretty well. I had landed an internship my senior year that turned into a well paying full time position upon graduation. I moved in with BF and we split some bills but he took the brunt of them while I was "paying off my loans."

This takes us to right before things got COMPLETELY out of hand. I look back at the years above and just want to go back and scream at myself! Throughout those years I felt pinched for cash. I allowed myself every luxury (by college student standards) but when it came to bills, books, rent, gas - I was always at a loss. That should have sent off sirens, alarms, bells; I should have WOKEN UP. But, I didn't.

Three months after I graduated with a BS in Accounting (yes, I know, kinda ironic) BF received a career breaking job offer in California. It was a dream! So we moved and realized that dreams don't come easy.

I spent the first year in a pretty depressed state. In addition to the relationship pressures of my graduation and us moving in together, add to that moving clear across the country with absolutely NO network except on high school friend of BF. This was the rockiest time in our relationship and, to date, our lives.

When I finally snapped out of my depression, got a job at a fun young company, and made some friends, I was stunned. In my state of depression I had racked up a whopping $20,000 in credit card debt, purchased a new used car for another $17,000 after taxes and interest, and had BF fully furnish the apartment, with furniture we ended up hating, to fill the empty space. It was a rude awakening to say the least.

Since then I have struggled to pay down my debt. Between BFF's weddings, trips home, Christmases, birthdays, socializing, etc - it was hard. Every time I made headway, something came up and brought me back to my starting point.

I look back now and realize I wasn't really into the debt reduction. I was letting debt control me instead of taking control of it.

Journey to Debt - Part I - Student Life

As a child, money was never a topic of discussion in my household. When I was a teenager, my parents split and it was my mom, lil' sis, and me. My mom had a job that paid the bills and, seemingly, allowed for a fashionable and fun lifestyle. In reality she was up to her eyeballs in debt and was choosing to ignore it.

My mom would always say that we were low on money then turn around and blow $500+ in a weekend shopping for lil' sis and me. And this was a pretty regular occurrence. As I got older I started to understand a LITTLE bit more.

I started my first job at 16 and made roughly $100 per week. Since I had never really handled more than about $20 at a time, I was THRILLED. This meant I could go shopping and buy what I wanted when I wanted! So I did. At the time I didn't know much about high fashion and designers so the $100/week pretty much allowed me enough freedom to buy just about anything I wanted.

As I got close to college I learned a little bit more. I learned that I should never get into credit card debt, but having a credit card is important to "build credit" (didn't quite know what that meant yet). So, I went off to college with my credit card in hand. I barely used it, and when I, did I paid it almost in full each time, keeping just a small balance to "build credit". I worked a couple small jobs on campus, had a pretty decent financial aide package (including loans), and received financial support from my mom.

In my first year of college I accumulated close to $10,000 in student loan debt (that school actually cost $30,000/year, so I made out ok). I knew that wasn't good so I transfered schools. I ended up at a respected state university, a bit farther from home, with my tuition completely covered and a federal loan for other living costs. My mom bought me a used car, paid in full (by her home equity line of credit, ugh), and sent me on my way.

I used my biannual loan disbursments to buy books and go shopping. Sometimes the money went to my pay off my credit card, sometimes it went to rent and bills, but I never saved. I believed that as long as I kept my credit card balance under contol, I was golden. And with the financial support from my mom, I didn't really think twice. I knew she was in credit card debt and was proud of me for keeping my balance under control. That had to mean I was on the right track.