When You’re In Debt*

Posted By on July 27, 2011

Disclaimer: This post is not judging anyone, nor anyone’s situation, nor what anyone said. This is simply MY story. The dialogue on Twitter today made me think about my situation and my situation alone. Everyone has their own story. I just wanted to share mine. The end. Now everyone hug!

There was a discussion on Twitter today about how the average amount of credit card debt per person in America is $14,000. And there was a bit of shock over that because, yeah, it’s a lot of money. And the discussion then started about how people abuse credit and that there was sadly probably a lot of mink coats, yachts and big TVs to show for it.

Now, I am sure that is the case with a lot of the people. There are many, many people who abuse and do not understand credit. Look at all those people who bought houses they couldn’t afford and did interest-only loans. Credit is not FREE MONEY! But a lot of people don’t actually GET that.

I chimed in because that number makes me feel better. I will admit, I’m above the average when it comes to credit card debt. It is not something I’m proud of. And I will admit that there have probably been times when I wasn’t smart about it. I’m not embarrassed. It is my situation and I own it.

But for all that debt? I don’t have anything to show for it.

Well, that’s not true – I am alive because I was able to buy groceries. I still have a job because I was able to put gas in my car and get to and from work. I have a place to live because sometimes those utilities went on the credit card because the mortgage/rent couldn’t.

It’s not something I’m proud to admit. It also isn’t something new to me.

Back in college, my dad started drinking again. This led to him losing his business and going back on his promise to pay for my college education. THANKFULLY, I had a really awesome job, that I busted my ass in, that paid my tuition. But when loans weren’t enough to cover everything else, anything and everything went on the credit card. On the high-interest credit cards they give to us college students. Because we don’t know better.

(His drinking also led to him hanging up on me every time I called for money, which led to me decide to never talk to him again for the rest of his life, but that’s a whoooole different story for a whole different day.)

I got that all paid off in 2006. Ten years later. And that was through doing one of those debt management programs. Which absolutely killed my credit. It took me years after it was paid off, but I have finally built my credit score back up, enough to buy a condo. But I still have debt to deal with. My debt-to-income ratio is not favorable. Because since then, I’ve lost my job a few times and was forced to take lower paying jobs to pay the rent/mortgage. And when my checking account balance is negative, I avoid overdraft fees by putting living expenses on my credit card.

Smart? No. Responsible? Not really. Necessary? Hell yeah.

I’ve recently decided to become proactive and take my financial health seriously. I’m tired of paying minimum payments and not seeing my balance go down. Just last week, I decided to apply for a consolidation loan to help with my credit cards. I am hoping to get enough to pay it all down, but even if I can take a huge chunk of it away and replace it with a loan with a much more reasonable interest rate, I will be on my way. On my way to getting out of debt.

Yay for being an adult! It’s about damn time. I mean, really, I’m going to be 34 in less than 2 months.

*Sung to the tune of “When You’re A Jet” from West Side Story.

About the author

Kristabella, who also answers to “Hey! Drunk Girl!”, is a reformed band geek with an amazing ability to drink most people under the table. You can read her inane ramblings here, where she talks about her exciting life as a spinster with two cats and a fascination for Bacon.

Comments

19 Responses to “When You’re In Debt*”

  1. Thank you for the West Side Story Reference-loved it! But oh mah, debt…where do I start oye! I have found that my issues with debt are much worse when I don’t look at them head on. WHen I know exactly what’s what I feel a lot less, I dunno, scared. Yay for you and taking steps forward

  2. Keith B says:

    Good on you for chasing out those credit evils, work hard to keep them down. Print out this post and put it on your fridge or bathroom mirror so you are motivated to work off the credit.

  3. Maura says:

    Good for you! We all have to get by and we’ve been in tough economic times for, what, 10 years now? Since the tech bubble collapsed in ’01? It’s rough. I’m sure there are *some* people who rack up credit card debt with fun stuff, but I believe that many, many Americans have to use credit cards to get by. My parents did when they had 4 kids, a mortgage and hundreds and hundreds of dollars in grocery bills each month. We do what we have to do.

    Good for you for paying for your own college, paying down your debt and being nonjudgmental. I was a little put off by the twitter sanctimony, too.

  4. Jessica says:

    Good for you for owning it. That’s really the best thing we can do, I think; acknowledge it, figure out how to start fixing it and move on. Good luck with the loan!

  5. -R- says:

    Is it weird that I don’t really care whether other people are living beyond their means or not? I just figure it’s their problem, and they’ll have to face it sooner or later. We put our entire basement remodel on credit cards with 0% interest for one year. We’re going to be able to pay them off before the one year is over, so it’s not a big deal to me, but if other people looked at it, they would probably judge me for having too much credit card debt. Whatever that means.

    I am definitely judgmental about other things though.

  6. Christina says:

    This was very honey and I appreciate it! Debt is the for letter word that I hate but it is an evil necessary. I hate having it over my head but it has lead me have a car, a condo and an education. It is just a fact of life

  7. I can relate completely. Good for you for taking charge. I hope to do that very soon as well.

  8. Darcey says:

    I completely understand where you’re coming from, and don’t get the “better than thou” attitude on Twitter, either.

    My credit card debt is mostly due to being laid off a couple of times, too… and having more necessary expenses than cash flow. Yes, there are some things on there that I could do without, and I’m working on that.

    Now you’ve got me thinking about getting a low-interest loan to take out the chunk of them…

  9. scarlet says:

    I hear ya girl. I did not make enough to live in nova for a year and a half and used my cc way too much=/ life is expensive.

  10. Angella says:

    I had to use my credit card for food back when I was an articling student and living in Vancouver. I didn’t like doing it, but a girl needs to eat.

    It sounds like you’re responsible with your credit, and good for you for consolidating. My sister did that and it made a world of difference. :)

  11. Chibi Jeebs says:

    Y’know, I’d hazard a guess and say that the majority of debt ISN’T big ticket items – every time our credit card has started to creep up into uncomfortable (for me) territory, it’s been $30 for dinner here and $60 for C’s video game there and $100 for new clothes for both us: it’s the LITTLE purchases that add up to BIG debts in our experience.

    And I have to say that I’m always astounded by the sheer spending power of a large percentage of the Americans I know. I’m not sure if you (general “you!”) guys make considerably more than I do, or if your cost of living is considerably lower than mine, or stuff is just that much cheaper down there, but it BOGGLES me how many people spend willy nilly on high-priced stuff – $300 boots, $500 purses, $1000 new wardrobes for blog conferences (never mind the price of the conference pass, air travel, hotel… ).

    Then again, as a good girl from Scottish heritage, I’m so cheap I squeak. ;)

  12. Raven says:

    We recently, as in this year, were completely out of credit card debt. 100% OUT. So of course the first thing we did was put the pergo floors on a 0% credit card offer, we have 1 year to pay that off. Which is fine, we’ve done pretty much every house project that way. Then unfortunately Sprog needed a crown and even after insurance that forced us to put $1300 on another credit card. We are paying it off as fast as we can but as much as I hate being in credit card debt, I hate living as a slave to BEING in credit card debt. I hate worrying about minimum payments or skrimping so that we make way above the minimums to pay it faster.

    As far as other people go, their debt is their problem unless they happen to be a Real Housewive of X City or one of my immediate family members where their debt affects us in some way.

  13. There are a lot of reasons why people have credit card debt. Some folks are truly stupid and just buy stuff without a thought about paying the bills. But many people, especially in the past few years, have really struggled to eat and pay rent/mortgage, so that credit card has been the lifeline that has ensured they don’t starve.

    I’m proud of you for facing this directly and deciding to take charge. Last year, I rented my old house to a couple with a REALLY good income AND their housing was paid for by his employer, yet she declared personal bankruptcy on her credit cards and will only pay off part of her debt.

  14. Lisa says:

    Once you get into debt its so hard to get out. My husband and I each went into law school debt free and came out with not only $90g in law school loans, but also $15g in cc debt apiece. Our minimum payment was over $500. (The minimum payment on our school loans was $300.)

    The only thing that allowed us to get out of debt was selling our house. The profit from selling our house was almost exactly the amount of money we owed on our credit cards, so we bought our next house at the height of the market with no money down and rolled our closing costs into the mortgage. We have managed to live debt free since then, but sold that house at a significant loss–funny enough, almost the amount of money that we had paid off our credit cards with.

    We had to take out a loan to sell our house. It seems like we keep having to come up with a lump sum of $30g. We paid it off in 18 months but it was alot of “no, can’t afford that” for a while.

    A consolidation loan is a good idea. Does your job have a credit union? That’s where we got our loan to sell the house; it had the best rate around.

  15. Jennifer R says:

    I am a loan officer (at a credit union) you would not believe the amount of cc debt I see. It’s sickening sometimes. 14k is low based on what I have seen.

    Good for you for dealing with it

  16. Andrea says:

    I think it is important for families to talk to their kids about money, credit cards, loan and, debt. I’m not saying the kids need to know specific numbers, but I work with college students who never have had to manage any kind of money and then are thrown into suddenly making decisions about financial aid, student loans, checking accounts and paying bills and they don’t get it. So they spend all of their financial aid refund on fun stuff, then don’t have money for books and bills. Then many turn to credit cards to make it all work. And then they find themselves in a bind after they graduate (and sometimes before) when they have a lot of credit card debt.
    I like the new rules that credit card companies have to tell you how long you’ll be paying if you pay the minimum payment. I think it really helps people put their debt into perspective, and see how paying even a tiny bit more can make years (and dollars) of difference.
    When I was in college, I bought a car on my credit card. Probably not the best decision ever, but the interest rate was lower than what I could have ever got financed for, and it was a cheap used car. I was able to pay it off before I got out of college, but still looking back it could have been a disaster.
    But anyway, to get back to your discussion topic, even if we could teach the whole world financial skills, most people need to experience things for themselves to take some kind of action. You’ll be much more proactive and responsible about your financial health now that you’ve got some not so pretty memories. And since you’ve paid things off in the past, you know it’s not impossible to do again! Thanks for sharing your story. :)

  17. Alice says:

    i just… don’t believe that most people’s debt is from flat screen tvs and extravagant shoes. i just don’t. i’ve been in debt, and nearly everyone i know has been in debt, and for us, it’s never been from pro athlete-type spending; it’s from living slightly outside of your means, over a few (or several) months. sometimes just because you don’t make enough, sometimes because you don’t realize you’re spending too much, sometimes because you don’t have a job and your income stream is nonexistent but like you said, a girl still has to eat. i’m sure there are plenty of people who are in debt via “irresponsible” means, but… i’m also sure plenty of us are and have been there via much more sensible living as well.

  18. jodifur says:

    For a long time I have been incredibly proud of the fact that my husband and I have 0 debt except for our mortgage and one car payment. No credit card debt, no student loans. Nothing.

    2 weeks ago, my husband was laid off. I have no idea when he is going to find a new job. Who knows how long that fact is going to last.

    Lesson: Life happens.

  19. Jessica says:

    Good for you for coming out of the credit closet. I’m one of those that dug myself once out of at least that much debt – with nothing except maybe one bicycle that still exists to show for it. Then it all happened again. I’m back in the hole, and look upwards to see if I can still see sunlight. Time to start climbing out of the hole – let’s take charge!