Welcome to my blog about my journey to kick my debt to the curb. A few weeks ago I made a conscious decision to do something about my debt. I have tried budgeting in the past and have had zero changes to my debt. Actually, that’s not true; I have actually gone further in debt! I think my own delusions led me to believe that I was getting further ahead, but the reality was that I was not even close. It got to the point that I had stopped opening my bills, especially my credit card. I was receiving a letter from Student Loans almost every month to tell me that I missed a payment! The payment is only $107.99 for fox snakes! I couldn’t understand what I was doing wrong. At 28 years of age, I came to the harsh realization that I am almost $40,000 in debt! I have zero assets other than my education so this was horrifying to say the least.
I wasn’t always the debt monger that I am today. In the beginning I started out pretty good. I was always a great saver as a child. I opened my first savings account when I was 5 years old. I was so good at saving that I would occasionally be lending my money to my parents to buy essentials like milk, eggs, or whatever else I could to help the family out. They always paid me back eventually and I wasn’t using the money anyway so it really taught me how to save my cash. Growing up with little cash I was never raised to be a spendaholic and I knew all the tricks to shop on a dime, take advantage of sales, and live within my means. When I got out and working on my own, I was able to live on $5.85 an hour in a part-time job. I bet you’re thinking, with all my great saving skills, how the hell did he get nearly $40,000 in debt? Here’s how:
As much as I could “survive” on next to nothing, after 2 years of this kind of work, I decided to go back to school and take a course on web design. My choice to go to school came with a hefty price tag of $14,000 for a 1 year course. I took out a student loan with the federal and provincial governments and I was well on my way to becoming a poor student. I needed a computer so I asked my mom to use her line of credit for me to buy a new computer worth $3,000. It was a great investment since I bought it in 2002 and it’s still working 8 years later. I was quick to pay off my debt to my mom and in about 6 months I had paid her back entirely. Keep in mind that I did this working a minimum wage job, so that was almost half my salary every month. If there is one thing I can’t stand, it's being in debt to family members.
Out of school a year later, I worked my butt off and got my debt from school paid down from $14,000 to $8,500. I was really on track to becoming debt free. After working in a job where I knew I was smarter than my boss made me head back to school. This time however, I decided to go to school without any financial assistance. Thanks to my (former) amazing credit history, I had now been approved for 3 credit cards, an American Express, and Ikea Credit Card, and a Bank of Montreal Airmiles MasterCard. I was always paying off my balances in full for the Amex and the MC, but I forgot about the balance on my Ikea card and got taken to collections over $300! I was so mad since I had never received a bill from Ikea. I quickly cancelled my Amex after that and stuck to one card – my MasterCard. MC loved me the so much! When I first got the card, I started off with a limit of $1,500. Today, that limit is at $15,700!! Why oh why did I let them do that to me?? I never in a million years thought that I would let myself get to the point where I was reaching that limit. The interest rate on this card was 19.5%! And to top it off, I fell for their stupid “balance insurance” scheme which made my balance climb higher and higher! I had that idiot insurance for years. Combine that with last minute emergency flights home and using my credit card for crap and restaurants, my current owing on my MasterCard is a disgusting $14,581.45 in credit card debt!!
That accounts for $14.5K, so where does the rest of the $40K come from? Well, as with most students, I built up more debt when I went back to school. I was living in an apartment I couldn’t afford on my own; eating at restaurants like I had been debt free forever; and flying home at whenever I felt like it without any paid vacation and paid for nothing with my own money. I could see myself swirling down the toilet bowl that is debt and now I’m in the sewer with the rats and all my crap. Over the time as a student, I hit $4,991.57 (out of $5000) on my regular line of credit, took out another $9,174.74 (out of $10,000) on my student line of credit, and after paying down all the the interest on my previous student loan it remains at $8,445.36. Add it all up and we’re talking $37,193.12 of debt!
Wish me luck!!!