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.
Swipe!
“I’m sorry it isn’t going through,” she said.
“Umm, can you try again?” I asked nervously.
Swipe!
“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.
Great job meeting your debt payoff goal! I’m sure that the total amount you owe is stressful so it’s a great idea that you’re breaking it up into smaller goals!
Thanks Holly! It’s a work in progress for sure. Breaking it up really helps me feel motivated as when I hit my goals I find some little way to “treat” myself (free or frugally of course :))
Best of luck on your journey! I’ve been there. It gets easier as you go. Congrats on sticking to your goals!
It is sure a challenge somedays. Changing my shopping midset and tendencies is hard work, but it will get easier over time, hopefully. 🙂
Congrats on being on track with your payoff goal thus far. Having been there myself that is where the momentum starts to pick up. Best of luck as you kill that debt!
Thanks John! I’m trying to take it one month at a time rather than looking at the big, overwhelming picture.
You are doing an awesome job! School definitely is a money sucking hole that too many people are trying to climb out of!
Thanks Amanda. Unfortunately for me, school debt is less than my consumer debt 🙁
Thanks for sharing your story, and best of luck on your journey! Many of us can relate to your story in one way or another!
I’m glad you think my story is relatable, when I first started facing my debts I thought I was all alone until I found the world of PF bloggers. Everyone is so supportive and willing to entertain my many, many questions. 🙂
Good job on staying on track! I loved the story, well-written and just a good story in general. Thanks for sharing it. You’re doing great things! Keep it up!
Kalen, I’m glad you enjoyed my story. I really like to write so I’m happy to know it shows through. 🙂
Sometimes a wake up call is needed, like you don’t even realize that you are spending that much money.
Keep paying it off.
I sure needed a wake-up call. I thought since I was making more $$ after college that I could automatically just spend all of it. WRONG! I know now that savings for emergencies, etc is a good thing, especially with home ownership. If something breaks on my house I’m responsible for fixing it, not like when you are renting… This was a huge mental adjustment for me.
Good luck with the debt payoff…glad you started budgeting and got on to the road to debt freedom.
I have a long road ahead and I’m sure it will have it’s setbacks. I still have a lot to learn, but I’m learning more and more everyday. 🙂
Good luck on your debt payments, I know you can achieve your goals. I think you’re on the right track now, just keep it up!
Thanks Clarisse! You have so much optimism for just reading one post, lol. I appreciate it.
Glad to hear you paying debt and changing the way you spend. The road is hard but so worth it. Don’t give up and keep motivated. With support you will be able to achieve. You are doing great! Keep it up!
Brit, thanks for the encouragement. You are so right! It is a long, hard road to change the way you think from spend, spend, spend to save, save, save (and pay off debt).
I’ve never missed a payment, but every time my card gets swiped I have a little moment of anxiety hoping it goes through.
I’ve never missed a payment either, I just was spending more than I was paying each month, not a good situation. I have used my debit card a few times and my credit card more times than I want to admit since I started this journey in January. I too have a moment of anxiety each time, even though I know how much $ is in my account or left on my limit, I check them everyday!
I’m sure you’ll have no trouble meeting your goal this year! There will always be bumps in the road, but I think blogging about it helps.
Thanks EM! Yes, blogging is helping. Before I make a non-necessary puchase I think, “what will my readers think about this?” That alone is good motivation to make the right choice rather than giving in to temptations, most of the time 🙂
Good for you for taking charge of your financial life! The hardest step is always the first one, which is often recognizing that you have a problem in the first place. Best of luck on your financial journey.
It is a hard step and it was scary adding up all my debt. The total still freaks me out, though it has come down a little since then and I hope it will continue to fall.
So proud of you Shoe! Glad to see you here! 🙂 Good for you for taking control of your finances. I used to hate wondering how much was in my account and if purchases would go through. Not a fun feeling!
Not at all a fun feeling, its like a massive anxiety attack. 🙁
That’s about the same amount of debt that we started with. Ours was all student loans.
Good job making the turn-around and sticking with your goal!
It’s good to hear from others that they started around the same amount, especially when you’ve made so much progress. 🙂
Paying off debt can get overwhelming at times, just keep the positive attitude and you’ll do great! Glad to see you’re on track!
Joshua, you are so right, it is overwhelming at times. Breaking it into smaller goals makes it more manageable for me. Positive attitude is key, but it can be hard to keep up the positivity all the time. I am certainly a work-in-progress on that 🙂
Hey SHNM and thanks for sharing your amazing story with us!
That’s a lot of debt, but it looks like you are no longer intimidated by the numbers as you slowly chip away at it.
As you know, it’s not easy to switch off the consumer mindset so kudos to you for doing so 🙂
Take care and best of luck with everything!
Lyle
I am sure trying to turn off my “comsumer mindset” but it can sure be HARD sometimes. I still make mistakes, in April I bought almost $150 of stuff I didn’t need and I charged it… Dumb move but at least I know it and am trying to change and get it paid off ASAP so it doesn’t start accruing interest.
Thanks for sharing your story with us. It’s great that you’re taking control of your finances and facing your debt head on. Getting out of debt isn’t fun but it’s absolutely doable and I know you can do it! Congratulations on being on track to meet your debt repayment goal and well on your way to your financial freedom. 🙂
Thanks Shannon! I can’t wait to give an update at the end of year saying I met my goals for the year 🙂 It can only get better now that I’m not in the dark about my spending and debt.
Good job committing to a different future for yourself and staying on track thus far! Rock bottom feels like the worst place in the world when we are there, but it really is a blessing if we learn from it and use it as motivation to move forward into a better place. Keep up the great work!
Staying on track for the most part anyhow. My little slip is one that I don’t plan on making again and I’m trying to get it paid off ASAP so it doesn’t add to my interest accruing debt. Using it for learning is exactly what I plan to do 🙂 Thanks Shannon!
You got your wake up call early, and you started to take measures. That’s how you do it and it’s always good to start early – it’s difficult, but you’re on the right track. Keep up the good job!
Yes, luckily I got the wake-up call before I was past the point of no return and also at a young age. 🙂
Rock meet bottom. I know them both. Finally facing them is anxiety provoking at first but then becomes cathartic when you see the progress. I just wish my debt freedom day could come quicker.
Are you using the debt snowball or avalanche tracker in excel that I sent you? Would love to see a post on that some day.
Also was wondering if you have access to a HELOC? Would it make sense if you could get a better interest rate to consolidate your c/c’s and just have one payment?
Keep it up, Shoe! You’re on the right track and I’m loving your posts. xo
I have been using the tracker and I am hoping to do a post on my projected debt-free date soon. 🙂 Any other post ideas? Shoot me an email if so!
As far as a HELOC, I don’t think I can get one, my credit score is low and I am working to improve that too. Don’t you have to have equity in your home to get a HELOC? I don’t have hardly any equity in my home yet. I just bought it in Oct 2012.
Awesome! Look forward to it. Let me know if you need any help with the snowball / avalanche tracker, but it’s pretty straight forward.
Good point about the HELOC, I would expect you would need more than 25% equity. It’s not always a good idea because then it spreads your debt over 25 years, unless you can afford to make prepayments to have that part gone faster.
That is the worst feeling in the world when your card won’t go through, especially if you know it’s because it’s maxed out. Best of luck on your journey.
Yes it is the worst Kim! I tried to just play it off as the card must be messed up, but inside I was dying of embarassement…