It should have been my financial rock bottom, that spring day in 2007.
I was at a gas station, buying a pack of cigarettes. I had just put $20 of gas in my tank, which wasn’t even close to filling it. But I knew I was getting really close to my credit limit and I needed, needed a pack of cigarettes to get through the tense meeting I was headed to. So I asked for a pack of Camel menthol lights (this was my classy phase, right?) and swiped my MasterCard.
And got declined.
I was embarrassed. I stammered. I fumbled with putting the card back in my wallet. But instead of doing what any financially responsible smoker would do -– hurrying back to my car and bumming a few cigarettes from a friend when I got to campus -– I pulled out my debit card. I swiped it. And while I was able to leave with my dignity -- see cigarette choice above -- I also left with a maxed-out credit card and a $35 overdraft fee.
That should have been it. That should have been the moment, the moment that I vowed to get my debt cleaned up and my finances on track. But it wasn’t. It took another year and a half of maxing out my card, overdrafts, tears, opening more lines of credit to cover my ass, some more tears, and a few anxiety attacks to convince me that I needed to do something –- something big –- about the dire state of my finances.
At the height of my indebtedness, the fall of 2008, I owed about $40,000. This figure was a cocktail of credit cards, student loans, a car loan and a few personal debts. Forty thousand dollars is a pretty scary number for anyone, but I was particularly on edge about it because of my profession: I’m a teacher. Not only do I make a pretty lousy salary, but prospects for growth are very, very limited. There are no bonuses, no performance-based raises, no promotions.
As I started to feel more and more suffocated by my debt, I realized I was faced with two options: leave the job that I love and find deep personal meaning in (yes, I’m one of those teachers) to find higher paying work, or make some very serious changes to my spending and saving habits. I chose the latter.
So, in the fall of 2008, as the world’s economy crumbled, my personal finances underwent a major, major overhaul. I started by taking some very typical steps toward reducing my debts. First, I totaled up what I owed. It was ugly and disgusting and terrifying, but at least I knew what I was facing. Then, I filled a large, plastic cup with water, dropped my credit card in it, and stuffed it in the back of my freezer. I didn’t cut it up because I wanted to keep the card available in case I faced a truly serious emergency, but I was going to make it really, really hard to get to. I didn’t end up thawing it out for almost a year.
Then I got pretty drastic, at least by my spoiled, upper-middle-class standards. I got rid of cable. I put myself on a cash allowance of $100 per week, which was for groceries, household items, cat food, and, oh, yeah, fun. I stopped buying new clothes, prepared food, and bottled water. Every purchase, no matter how small or necessary, underwent fierce mental scrutiny. Shit got really real when I enlisted a friend to cut my hair.
But anyone who’s ever paid off serious debt knows that reducing spending is only half of the equation. To make real progress, you have to earn more, too. So I took on extra work. A lot of extra work. I started tutoring after school in two different programs. I taught summer school. I wrote curriculum. I attended paid trainings. All this was, of course, on top of my regular teaching duties. I was busy, but the great thing about being busy with extra work is that you don’t have time to spend money. Seriously, that was how I started to look at my life.
I started to see progress almost immediately, but got my first real rush of success when I paid off my highest balance credit card with a tax refund that April. As someone who has never played competitive sports, I now knew what it felt like to crush an opponent. I was addicted to the feeling. Over the next three years, I paid off almost every other debt I had, and at the same time worked on building up a small emergency fund, using most of the methods I originally adopted to pay off that first debt. Although I will admit that I did get my cable back eventually. What can I say? I’m weak.
If I’m really being honest, this period of my life fucking sucked. I didn’t take vacations, I didn’t have free time, and I felt guilty and stressed about every little thing I bought. I think this is the fear that a lot of people have about tackling their debt, the shit-tastic period during which you really have to hunker down and make a lot of painful, unpleasant changes to your lifestyle. And I suppose they’re right to be afraid. It does fucking suck.
But. In my opinion, the alternative sucks a lot fucking more. The past (almost) four years of my life haven’t been exactly fun, but the thought of still having that $40,000 of debt, of being so financially desperate that I have to pay an overdraft fee for a pack of cigarettes, is much, much worse than anything I went through to pay it off. It’s hard to explain -– in a good way -– but I feel like I can breathe now. If something unexpected comes up –- a car repair, a vet bill, an unexpected trip -– I have the monthly cash flow to handle it and savings to fall back on if that cash flow isn’t enough. I can take a trip to Iceland or buy a new couch or invest in the stock market if I want to.
"If I want to." I suppose that phrase pretty much sums up everything I’ve been fighting for since I waged war on my debt a few years ago, a war that is slowly winding down and from which I plan to emerge victorious. And that, my friends, is worth not being able to keep up with the "Real Housewives" for a year and a half.