Saturday, June 23, 2007

Behind the Blogger, Part Five: The Debt Thing


WARNING: Long-winded personal revelations ahead. Catharsis time.

I am quickly approaching the one-year anniversary of the day I paid off my credit card debt. It was an anti-climactic day of sorts, surprisingly enough. I'd been in debt for nearly 10 years by that time, and you'd think (to quote Mama Cass) "It would come with rockets, bells and poetry!" But alas, no.

If you've ever been $30,000 in debt, you know what a crushing weight it can be. There were three simultaneous crushing feelings going on for me: 1) "How did I get here?" 2) "What can I possibly do about it?" and 3) "I'm just not going to think about it today." It is quite shocking how quickly a short-term financial crisis can spiral into a life-crushing massive debt.

I was always a good little consumer, never carrying more than a couple of hundred dollars on credit. Then one day, I decided to move 2,000 miles away from home. I got a great job, making more money than I'd ever made before. While setting up my new life, I did use the credit cards. The banks out here didn't have debit cards at the time, I never carried a checkbook, and I thought, "What the hell, I make enough money, it's no big deal." I now routinely carried about $3,000 in credit card debt, but I had good rates, and was not particularly panicked about it.

I should also point out that 2,000 miles away put me in Las Vegas! Since I'd moved out with a group of friends, we really only had each other for entertainment in the early days. And can you think of what the primary source of entertainment is in Las Vegas? I knew that you could. Anyway, I wouldn't say I had a gambling problem, but the entertainment of choice did put constraints on actually saving very much money. I was still heady with the rush of having a well-paying job, and there didn't seem to be anything to worry about, and besides, I had a few thousand dollars in the bank. . .

An unfortunate one-two blow of a bad (read: money-grubbing) romantic entanglement, coupled with the unexpected loss of a job (after working five weeks without getting paid) left me with my already accumulated debt, no savings, and no income. Add to that an additional six weeks of job hunting (with no sustenance outside of Unemployment Insurance; which is nearly nothing, and a small loan from my parents), and you have the makings of a debt-hole that is far larger than it looks at the start.

What many people don't realize when the debt-hole is freshly dug, is how much deeper the hole will get before you get the chance to start filling it in. The new job I got paid 60% of what my previous job paid. The desperation of paying bills with little income of course leads to paying one card with another, and balance transfers. Then I took in a sibling down on his luck, and he had little income to add, but required food and stuff (the bastard!). So, even the rent was paid once or twice with those convenient little (evil) checks the credit card companies give you.

Once the spiral takes you to $10,000 or more, and something comes up (new transmission, brakes, it always seemed car related for me), you really get a laissez-faire attitude about it: "what difference does it make now?" Only an ultimatum from the (good) romantic entanglement (hi, honey!) got me off my butt, my head out of the sand, and to a light at the end of the tunnel. I found a debt consolidation program, set up a painful monthly debit from my account, and started paying things off. This also required cancelling all of my credit cards, and living within my means, even if that meant stretching a dollar to the breaking point.

I went six years without ever using a credit card. I went six years paying a huge amount of money every month, sometimes paying large amounts extra. I figure I paid upwards of $50,000 on a $30,000 debt, just in those six years (discounting what I'd paid up til then). But pay it off I did. And then, nothing! No parade, no balloons and streamers. Sure, I have more disposable income now, so we can pay off the secured debt we have, but I expected elation! I think what happens is, as you approach that last payment, the debt has shrunken so much, the crushing weight has already gone away. That said, I wouldn't trade places with my former self for anything.

Here are a couple of links related to debt, and how to avoid digging your own debt hole.


Top 5ive Fast Loans to Avoid -- Intro - AOL Money & Finance

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