This story came to me from a reader and a good friend.
My journey into debt hell, and the long climb out of it
This story may hit close to home to some readers; others will read this, shake their heads and say “how can someone be so stupid!” but it is one worth writing about, and – I would guess – is a story that can be told thousands of times over by many people you see each day in your life.
Quick backstory of me: I have had a good job since finishing University, making “average” money. I really enjoyed buying things. EVERYTHING – cars, vacations, clothes, movies, video games, dinners – you name it, I probably had it. Only problem was – this all went on the credit card (outside of the car – that was financed). I had a budget imposed on me by my partner, but I would purposefully understate my income to them, to leave room for “fun” – when I wanted something, I would buy it. It was actually an addiction – there would be times where I would get an unstoppable urge to go purchase SOMETHING new – even if it was something that I would never touch again (I still have movies I haven’t watched, and video games that have at most 5 minutes of playing time on).
I had a savings account set up as well, which I would put nominal amounts into each month, but that was done more to appease my partner to show that I was committed to saving and was not done for the purpose of paying off my credit card debt (which had by then ballooned to ~$15,000). I knew having this debt was wrong, and “committed” to paying it off. I would continue to put some money into my savings (stupid) and would dedicate over $2000 each month to payments on the credit card… sounds good, right?? Sure, if I had only STOPPED USING THE CARD. I didn’t – my spending habits hadn’t changed, and each month I would see that not only did my debt not shrink, it was in fact still growing. It got to the point where I would not even open and look at my statements as I was terrified of seeing a higher amount owing, even after putting a $2,500 payment on it the month before.
I knew I was in serious trouble, but didn’t know where to turn. Those closest to me had no idea, and most assumed I was well off – nice car, plenty of travelling, new toys – things most people associate with success. I didn’t want to destroy this illusion. I didn’t want my partner to know as I knew they would leave if they found out – they abhorred credit card debt. I went to my financial institution to see about getting a consolidation loan to thus lower the interest rate I was paying on my debt, and hopefully pay the amount off faster without anyone knowing. Problem was, because of my extremely poor debt ratio and poor credit, the interest rate offered me for the loan was still double digits. I would also be required to cut up my card – I couldn’t do that – how could I explain to people why I no longer carried a credit card? So I continued to flounder, hopelessly lost, and getting buried deeper each and every day.
I had given up – outside of winning some sort of lottery where I could wipe out the debt in one fell swoop, I was resigned to the fact that I was f***ed. I would continue to throw larger amounts of money on it, but I never changed my habits, so my card was always close to being maxed out. The CC company, however, was oh so nice to provide me with unrequested credit increases to make sure I could keep up my spending habits.
Thinking back on this now, the most terrifying thought is where I would be now if one thing hadn’t changed – my partner figured out my lies, called me on it, and instead of throwing my ass to the curb (which they had every reason to) told me they were going to make me fix this problem once and for all. I had to pull up my credit card statements, and all-in, I owed approximately $20,000 by this time. Going through the statements, it ended up that I was also a victim of fraud… to the tune of $3,500 (really, really stupid). Because I hadn’t even looked at my statements, it was past the period to challenge it, so I have now paid $3,000 for someone to have a trip on Air Canada somewhere nice… I hope they enjoyed it; I sure didn’t.
Fortunately, because of the original forced savings, I had the money to pay it all off at once. 2.5 years of savings wiped out. At the time, my net worth was an amazing -$8,000. Because of this, I was then forced onto an extreme savings budget – if I strayed, my partner would leave, and I am willing do anything for them.
All eating out was cut. ZERO retail purchases for me. Travel? Sure, to work and back. I remember one night we were out as a group for wings and beer – I had water. I didn’t want to be there, feeling so helpless, feeling so CHEAP… but I made it through that. As I continued to save, a more reasonable budget was put into place – I had a set amount for eating out, a set amount to set aside for vacations, etc. Difference being that this time, there would be no hiding, no lies, and no binge spending sprees.
Fast forward 1.5 years to today. I own my car – no car payments, only regular maintenance fees (which I wish I could eliminate as well, and would, if I didn’t NEED a car). Net worth has changed from that negative $8,000 to a positive $40,000 – nowhere near where someone at my age should be, but an almost $50,000 swing in a year and a half is pretty decent in my books. I feel free now – there is no weight on me, and it is an absolutely fantastic feeling knowing that I owe no institution any money.
I recently had a conversation with someone who rarely sees me, and I was asked “so, what toy do you have your eyes on now?” My response: “Nothing.”
He was blown away; he told me that there was always some new toy that I wanted, but for me now, that is not important. I still get the occasional toy, but now it is done using gift cards received from work, birthdays, etc.
So what is the point of this long-winded commentary besides I am one incredibly lucky idiot? There is a light at the end of the tunnel. If you have credit card debt, get out of it now. It will require sacrifice; it may require a LOT of sacrifice – your current standard of living will likely change, and it will seem like it will change for the worse… but it is a necessary change. I was lucky that I was called out on it and held accountable by someone. If that didn’t happen, I would likely be sitting here, alone, with over $100,000 in retail debt. Hopefully you have someone in your life to hold you accountable – if you don’t, find someone. There are many friends and family out there who are willing to help you. I think almost everyone knows carrying debt on credit cards is bad, but the majority of people do… find that strength however you can, cut up those cards, and put everything you have to eliminate that financial cancer. The feeling of being debt-free is indescribable, and it will be worth every single meal, pair of pants, DVD, video game, concert, and trip that you gave up… honest.
I still have a long ways to go – I am not married yet, and the reason is because of my stupid spending. I do not have the cash to get married with, but I am working on rectifying that now as well – instead of worthless toys and numerous vacations, I am using my money for something far more important – a future for me, and the ones I love.
As more and more people are starting to face their own reality, their own truth about their financial situation, this story is more common than not. I would honestly like to thank my friend for sharing their story; it takes a lot of guts and bravery to share their story in hopes that it will help someone else in the similar situation. I know that people may feel embarrassed or ashamed to even admit to their loved ones what the financial reality is, but I believe that if you truly <3 them, honesty isn’t the best policy, it is the ONLY policy.