I was once, not terribly long ago,
young and stupid.
I resisted getting a credit card until about my junior year, when I
accidentally set fire to a girl's car and needed to buy her new seats without asking my parents for the $400 it was going to cost me, because they would've asked why. So I got a card, bought the seats, and paid it off within a couple months.
It was my first card, so I got a "great" interest rate of about 15% which didnt matter to me at the time because I wasnt going to use it. Then I "needed" a new computer. And some truck parts. And a new video card. And.....well you get the point. I soon had about $2000 on that card that I wasnt ever going to use, with minimum payments of $100. I was living on about $700/month so that kind of sucked.
So I got another card with a smaller interest rate and smaller minimum payment and transfered the balance, maxing out the "new" card. So I kept the old card. The new payments were about half the old one, so that was cool. I again kept the old card for "emergencies," like weekend trips to Atlanta, New Orleans, and Knoxville--in my truck with 12MPG. So eventually I had both cards maxed out and minimum payments that I really couldnt handle. So I got a third card, not for emergencies, but for necessities like food because I was paying too much for my cards.
So then I started getting student loans for way more than I owed the school. At this point (about 3 years into college) I only had about 6 grand in loans total. I would pay off the cards at the beginning of the semester and buy something nice for myself with anything leftover. I repeated this several times, including putting a new engine in my car and paying about $3800 to get my pilot's license.
So then I graduated. New apartment, moving expenses, new TV, all kinds of stuff. About $3,000 worth of "new job" expenses from July to October of last year. Ooooo....wait....no more student loans. That's okay, right, cause I gots a Masters in IT, which means I'm makin hella money right?
NOPE. If you take the money I made from my assistanship, loans, and credit cards, it equals exactly my current take home pay. Only now, I gotta pay back the cards and the loans. Cards weren't all that bad, if I only paid the minimums which would've taken, oh, 6 years to pay off that way, then I still would have enough money to buy a new 2005 Mustang GT....drool....
Yeah, so after adding up the ~$30k for loans and ~$7k for cards, I was gonna go buy me a $30,000 car that I didn't need, but I was gonna wait till june so I could afford the insurance. The last straw in my own mind was when I bought 2 36GB WD Raptors for about $225 that I absolutely didnt need.
I was watchin CSI a little while later, and Nick told some grifter that
"the best way to get out of a hole is to quit digging". DING DING DING DING!!!! We Have a Winner!!!! I realized I was not going to help my situation by still buying stuff
just because I could afford the payments.
By continuing down the path I was travelling, I was setting myself up for a major meltdown financially and emotionally. If something happened, even something minor like needing a root canal or new brakes, my house of cards would come crashing down in an instant. Living paycheck to paycheck is NOT COOL.
So, I shredded my cards, cancelled the ones with zero balance, and started paying hella amounts on the 2 remaining cards. In 4 months I had paid down about $3500 of credit card debt without a real plan.
For Christmas, my sister's boyfriend gave me some
Dave Ramsey tapes and 2 books because he had heard that I had had enough. I am now a "Dave Ramsey Cultist" as my boss likes to say. There are a lot of "Dave Says" comments coming from me lately, and everyone around me thinks I'm fricken crazy. I make $2000 a month, and I pay $1000 a month on debts. Can you imagine that? HALF?! WTF!
So, I got lots o crap that I bought because it was cool that is now--or shortly will be--for sale. I might even get a part time job delivering pizzas just so I can get my magic number down to ZERO. My goal is to have no debt by Jan 1 2007.
That's right, 2 years to pay off nearly $35,000 with a take home pay of only $24,000. I pay for everything with CASH now, because it hurts when you lay down a twenty. I have cut my spending by nearly 40% just by doing that.
Yeah, so um, any of you that read the whole thing, I commend you
Edit: Added graph 8/17/2005
The flat spot at the beginning is where I had to hold off because I was about to move 400 miles away. The one at the $15,000 mark is because my car exploded and I had to either pay $4000 to fix it or buy another $2500 car. Figures are not entirely "accurate" until May 2005 which is when I started posting the figures immediately after making a payment.
Edit #2: It seems that finally my alma mater has deactivated my webspace. No more pictures until I find a new host.