Rainy Day Pennies | Debt Free Living and Personal Finance

It’s a strange thing. I started off with much better financial sense then most. I started working my first job at 16. I saved every dollar that I made (which at $5.25/hr part time wasn’t much!). By the time I started college, I had $6000 in savings. I didn’t spend a dime, and my parents paid my room, board, and tuition.

But life and poor decisions happened, and I ended up with a credit card debt totaling about $34,000. I moved to Seattle to start over, and ended up burning what little savings I had left to get settled. It’s been 3 years later, and my debt has been reduced to $13,000. I thought I would have it fully paid by now. I made some rather poor choices that delayed my debt payment. For the first couple of years, I was only keeping things about the same, not reducing or increasing by much.

This past year, I’ve decided – Enough is ENOUGH! I want this paid now. There’s no reason I can’t. I make enough money. I started my life with really solid skills. There’s no reason why a financially responsible person like myself shouldn’t be SAVING that money and investing in myself.

Despite having a large debt looming over me, I have amazing credit. It’s immaculate. I went and talked to a home mortgage lender who was surprised that I had such a good credit score acquired ONLY on credit debt. How was I able to accomplish this? I’ve never been late on a payment. Never. Not once in my 15 year credit history. Even during times when I was unemployed and financially strapped, I always budgeted enough money to pay for at least the minimum on my cards so I would not incur penalties. Taking advantage of my great credit, I switched balanced between credit card companies to keep my interest and payments low until I got on stable work terms.

I should have been able to pay off more in the past 3 years after getting stable work, however, I made some poor decisions by going out too much, getting unnecessary subscriptions and expenses. I was able to make some progress. Just not enough in my eyes. I also got hit a couple of times with unexpected expenses that caused me to use the card because I didn’t have enough savings.

Now I’ve taken charge. I have money automatically withdrawn from my check into a savings account. I’ve budgeted how much money I need to pay for bills and vacations for this year. If an unexpected expense occurs, I withdraw from my savings fund. Everything else gets funneled into the credit debt, which I transfered the balance to a 1.99% rate until January 2008. I plan on having this paid off by November 2007, while still going on vacation to Jamaica in July, visiting parents in Colorado in Thanksgiving, and Europe to meet the boyfriend’s parents in December.

I’m just trimming off expenses I don’t need, finding inexpensive entertainment and activities, and watching every penny.

-Cathy-

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Debt by Cathy