Happy Friday, Frugal Farmer Friends! 🙂 Today I’m thrilled to publish a guest post from one of my favorite new bloggers, Shoeaholic No More. Like so many of us personal finance bloggers, SHNM, as I affectionately like to call her, has committed to working her way out of debt – a LOT of debt. She’s relatively new on her journey, but you’ll thoroughly enjoy her fun writing style and engaging personality. Welcome, SHNM!
Swipe, Swipe, Swipe!
This is an activity I had become very good at over a few years, swiping my cards and ignoring how much I was spending on things I didn’t need and some I didn’t even really like, until I hit my rock bottom. But first, a little background.
When I went off to college in August 2009 I had just over $5,000 saved up. This had come from birthday and Christmas money every year from my childhood and money from my part-time jobs in high school. I was also engaged at the time I started college.
Over the course of my freshman year of college, my then-fiancé and I basically lived off of my savings. When we went to get a new joint account right after our wedding in June 2010, I had to close the account to avoid service fees for being under the minimum balance. When I closed the account it has less than $1 in it. The worst part is we had nothing to show for spending this money. It was mostly spent on restaurants and going out.
When my marriage ended in the fall of 2010, (a whole ‘nother story) I was left to pay the rent on a one bedroom apartment, plus all my living expenses on the salary of a full-time student with a part-time job. Needless to say, the math did not work in my favor each month. Luckily, I have a very supportive family and they helped me make ends meet January-May 2011. During this time, I also applied and was approved for my first two credit cards.
I thought I was “smart enough” to use credit wisely and these cards would “help build good credit history”. At this time I was only using the cards for small purchases and would pay them in full every month. Their combined limits were under $500. Even though I was paying them off, I was still using them unwisely to buy things I wanted rather than things I would’ve had to pay for anyhow. These cards were being used to fill the loneliness I was feeling after my marriage fell apart.
When I graduated in May 2012, I had landed a good job in my hometown and I thought I would be rich as soon as the new job started. I had a serious case of lifestyle inflation during this time. I added a $120,000 mortgage, $4,000 of furniture finance and a couple thousand of credit card debt, in addition to $8,000 of student loans.
I was just getting by each month and money was getting tight, but I thought I was fine. After all, my account wasn’t negative! But, I’d go to get groceries and I couldn’t use my debit card, there wasn’t enough money in my account, so I’d put it on my credit card.
During this time I found myself doing almost anything I could to make some money. I was making deposits at the bank as fast as I could after selling my belongings at garage sales, etc just so I could keep my account in the green and sometimes I still couldn’t. I got charged so many overdraft fees, it was ridiculous!
Finally in September 2103, I was out to lunch with my BFF, D, who was traveling through my hometown on a business trip. We decided to eat at a local fast-casual style restaurant and I was at the cashier’s stand.
“$10.55” She said.
Like I always did, I handed her my credit card.
“I’m sorry it isn’t going through,” she said.
“Umm, can you try again?” I asked nervously.
“It’s still not working. Do you have another card you’d like me to try?” she asked.
I panicked internally, “I can’t hand her one of the other cards I have in my wallet, they are all at their max limit, unless the payment has gone through for this month…”
“It’s ok I’ve got it, my treat!” D came to my rescue.
“You better call your credit card company, I know you’ve had issues with it going through before,” D said.
“Umm, yeah I better.” I said, thankful to have an excuse. After all, it had been true once before. My card hadn’t worked when I was travelling once because the company suspected fraudulent activity. But I knew that wasn’t the case now, I had maxed out the card’s limit. “Thanks for lunch D.”
After lunch, I returned to the office where I work as a credit analyst. I don’t remember the rest of the afternoon, I couldn’t wait to go home and look into why my card didn’t work and what I had spent the rest of limit on since my last payment.
From that day on, I started tracking my spending in an excel sheet for every transaction, big or small, but I still didn’t fully admit my debt problem to myself until December 2013.
When I started my blog, Shoeaholicnomore, I added up my debt total and it was $137,669.05!
Ever since then, I’ve been living on a budget and trying to control my spending tendencies as best I can in order to pay off my debt. My goal for 2014 is to pay off $7,500 worth of debt (principle) and so far I am on track!
Shoeaholicnomore is a mid-20s single girl living in the Midwest. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at Shoeaholicnomore.