Getting Serious about my Debt, Part 1

Every little bit helps

Saving Pennies and Everything Else

I think that most people know and understand that it is much easier to pay off debt if you are married or in a relationship than when you are single.  When you are married, you have that second income to fall back on. At least, that’s the way it was for me until about three years ago. When I was married, we were able to pay off both of our cars much earlier than their loans would have had them paid off. I was able to save about 14% of my salary into my 403b account, which felt awesome. Today, I only save about 6% of my salary into that account. Thanks to a generous pension plan provided by my employer (shocking , isn’t it? Yes, some of us are still lucky to have them), I also have another 10% of my salary going into a pension and that 10% is all paid in by my employer, not me. So, there is 16% right there and luckily my salary is higher than it was 3 years ago. (I’m also completely vested in the pension plan yay!) 

 When I first went out on my own, I offered to pay half of our house’s mortgage (temporarily), along with my rent and student loan payments. It was crippling. $3000 would walk out the door before I even ate for the month. It didn’t help that back then, I thought some things were “necessary” like Internet, cable TV, etc., (god forbid I didn’t have my TV shows, right?) even the basic package was expensive thanks to my cable provider having a monopoly in this area. Basically, if anything major came up, like, say, a car repair, I was screwed and on it went to the credit card. (My car was a Honda Civic with at least 160k miles on it.) When married, we had paid off the credit card every month. Not so much when I was alone. 

Many of you know how things are after a breakup. You do a lot of emotional things. For some of us girls, it’s buying new “single girl” clothes so you can feel better about yourself. Yep, I did that. Dumb. Don’t have enough money for gas for the week to drive your car to work when you could take the bus? That’s ok, charge it. You get the picture. 

Before I realized it, I had run up a total of about $8000 (this is my estimation of the worst it got) between two cards. Ostensibly, I had opened up the second card to transfer the balance of the first one to 0%, with the intention if paying it off, QUICK. Yeah, clearly, that didn’t happen. 

Somewhere along the line though, I just got sick of it. Sick of paying out hundreds of dollars every month just to end up in what felt like the same place every month. Some of it may have been because of my relationship that began last year and just ended up last month. That person had no debt other than a mortgage on one house and on a large tract of property elsewhere. Not having gone to college, he didn’t have the loans I had. But, still, it showed me there is a different way to live. It was also possible to have some savings, meaning, more than $500.

So, I got serious. Serious about paying off bills as fast as I could. I stopped spending on clothes and other stupid stuff, cancelled catalogs and other crap that kept being mailed to me, and even went so far as to put my credit card in the freezer several times, encapsulated in a container of ice. (Believe me, that works.) I kept chipping away, month after month until one was paid off.  Along the way, I enlisted support from my friends, in person, and on Facebook. That also helped and kept me accountable. I had someone take my picture when I would cut up a credit card. I relished the shocked tone to the credit card company person’s tone of voice when I asked the, to drastically LOWER my credit limit on my remaining card, and just get rid of the cash advance option. (Seriously, go ahead and try it and try to not laugh out loud over the phone.)

Today, I have no personal credit cards, just my corporate one. I have some automated savings going into certain online bank accounts from each paycheck. I nickname the accounts such as “in case I lose my job” and “scooter” etc. that way, I really know where the money is ultimately going to go.  I also meet with my wonderful financial advisor about every two months so we can go over my simple little goals (I am sure whatever little funds I have saved are very small potatoes compared to other clients but she still treats me with a lot of respect.)

Having no credit cards can be difficult if something happens to your debit card (ie, a security breach with one company prompts your bank to cancel yours), but luckily I have a good friend that helped me with with lending me cash until I got the new card. That also helped me to conserve funds. With a credit card, it is just too easy to spend money you don’t have. There is always tomorrow pay it off. 

Well, not for me. If I don’t have the money, I don’t buy it. And I have found it is easier to pay off other bills when you aren’t spinning your wheels in place every month, just maintaining your credit card balances and praying nothing goes wrong. 

Stay tuned, I have a whole lot more to say on this!

 

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