We’d like to provide a frame of reference when it comes to writing about our financial troubles, so I’m going to start with how I got into a large financial hole. She will follow up soon.
When I was in high school, I got my first job when I was 15, a cashier at the local neighborhood McDonald’s. I met a lot cool people there, and learned how to have a strong work ethic. A eventually quit that job, and worked at a Turtle Wax car wash center. That was a great job because I got paid mostly in tips. The harder I worked, the more money I received. Don’t you wish that’s how all jobs were?
I didn’t have a problem with money in high school. I got good grades, worked, and never asked for money from my parents. I was a pretty cocky teenager, but I didn’t have any debt. Then came the college years.
Freshman year went by with me swatting away all of the credit card offers that came with free T-shirts, frisbees, etc. I had a debt card from my parents, and I was to withdraw between $20-$40 every week. During those years, I was frequently reprimanded for taking money out of an ATM that wasn’t from our bank, thus incurring a fee. My parents didn’t like (and still don’t) giving away money to banks. Hey, it isn’t my fault, by bank’s ATM was in the student Union, not near any of the cool restaurants or bars.
I got my first credit card when I was 19. I still have it – a University MBNA card, with a $2,000 balance! My room in my fraternity house was empty, I didn’t have many cool clothes, so I bought stuff. A lot of stuff. I maxed out that credit card pretty quickly. That started the waterfall of credit cards; not just Visa’s, MasterCard’s, but store cards. I needed to look good. After all, that’s how I met my fiancée. Structure (now Express Men) was my weakness. Items that I put on the credit cards included many hung-over meals, beer, a home entertainment center, beer, clothes that I couldn’t afford on my store cards, beer, and many gag gifts for holiday presents. By the time I graduated with my bachelor’s, I racked up about $5,000 in credit card debt.
Luckily for me, they don’t check your FICO score when you apply for grad school, so I got in. At the time, I think it was a dismal under-600. Since I was in grad school, most of my friends in undergrad had moved on, so the incessant partying and trying to fit in stopped. I wanted to mature, intellectually, emotionally, and financially. My program provided me with a $19,500 stipend per year – payable monthly. I had to learn how to budget very quickly.
At that time I had six credit cards that I was only making the minimum monthly payments on. Figuring out how to balance those payments, rent, food, and other necessities on a once a month paycheck was to be a challenge. The interest on my credit cards ranged from 12%-21%, so I decided to go down to my credit union to see if they could offer me a personal loan for the amount of my credit card balances for a lower average interest rate. To my surprise, that is exactly what they did. So I paid off the credit cards, and had a low monthly payment that was automatically deducted from my pay so I wouldn’t even notice it was gone.
Until I charged up the cards again. On what? A $200 remote control? Yep. Food? Yep. More beer? Sometimes. An interview suit? Yes.
By the time I got my Master’s I had paid off the loan, but was back at square one, with about $5K in credit card debt. I ended up getting a pretty good job in Chicago, and I was determined to pay off all of my credit card debt once and for all! I still needed to make better decisions, and that meant that I was to stop using my credit cards for good.
A year has passed since I finished up my Master’s, and since then I have used a credit card once – in an emergency when my car broke down. While they still aren’t all paid off, I have managed to drastically reduce the amount I owe. I even bought her engagement ring with cash.
Not only do I have to deal with my financial demons from the past, but now so does she. Hopefully, we can overcome all of this and one day look back, and laugh. At least a little.