Rainy Day Pennies | Debt Free Living and Personal Finance

The other night, I went through my filing cabinet looking for tax documents. I found an interesting item from my past instead: a credit card statement of my former spending habits. In glaring detail, it is evidence of a spending spree that would eventually lead me to the lowest point in my life.

The date: March 22, 2001. I spent the following in a single month:

It is incredibly embarrassing looking at this. The restaurant bill is startling. At the time, I honestly believed I wasn’t spending that much eating out.  I believed it was a better ‘value’ than eating in.

This bill was a little higher than the ‘average’ for the time. I didn’t spend $1000 every month on travel. I honestly can’t remember where we went.  Can’t have been worth what we paid if I don’t remember it.  I’m not sure why the pet costs were so high. I’m certain we spent $500 average on the restaurant meals, though. I estimate our total ‘average’ per month around $1500-$2000, not including rent and utilities.

Looking at the details, it’s clear why I ended up overweight and deeply in debt.

Subsequent statements show that I paid off the bill in full.  I didn’t accrue debt at this time. My boyfriend and I had the income to support this with our combined incomes, and I paid off the balance in full. Except we weren’t saving anything. When we both lost our jobs during the tech crash in 2002, I accumulated debt paying for our bills because we had nothing in savings.  I suspect we didn’t change our spending habits much. With no income to pay it off, it accrued at an astronomic rate.  We didn’t think we would be out of work for so long.  Stupidly, I followed advice from financial experts telling me to have a credit card for emergencies, not cash.

In March 22, 2001, I had a good income, was young, and never really thought anything bad could happen. I didn’t save for a rainy day. I paid a dear price for it.  In 2003, I was 40 pounds overweight, and $35,000 in debt. Debt I accrued in one year with a partner who left me to pay for it on my own.

There is a happy ending, though. It took me five years to recover from this, and I did it on an income of $40,000 per year.   I did it on my own, without defaulting, and never declared bankruptcy. It took being brutally honest, disciplined, committed, and willing to live less than the ‘good life’ to get it done. I already lived enough of the ‘good life’ of spending wrecklessly, and wanted no more to do with it.

I’ll contrast my current spending in a follow up post.

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Debt by Cathy