If you’ve been following Finance Fox since it started, you would have known that I am in debt. In fact, Finance Fox was born as an outlet for me to talk to my debt and my journey from red to black. When I started blogging, roughly 9 months ago, I was in $9,000 debt. This debt was spread across one credit card, student loan and line of credit. This debt was incurred over several years (7 years to be exact) and directly due to living beyond my means. The long and short of it; I was young, dumb and irresponsible with money. In those years, all I cared about was living life, partying, shopping and traveling. I lived pay check to pay check, while blowing my money on unnecessary purchases. The only positive side to my debt, was that I was responsible enough to pay my bills on time. Sometimes I would pay the minimum payment, while other times I would pay more. There were even bright spots, when I would reduce my line of credit or credit card debt down by 30-40 percent. Sadly, that did not last long, as I would fall back into the same old spending habits and max out the credit available.
Buy Now, Pay Later
That was my motto for my spending. There was nothing I couldn’t afford and it all seemed like great deals. In fact, all the deals seemed too good to be true. How can I forgo these beautiful jeans; ‘Wow, they are like 30% off. Typically $175, now for only $122.50′. Than I would SWIPE. Starbucks latte while shopping? SWIPE. And everything was being purchased through a combination of swiping plastic and one signature. Virtually I was unstoppable and felt this high, while the craving grew larger and larger for more stuff. Everything was a great deal and how I could I pass up a great deal. This is why I purchased now, with the best intentions to pay later. Whether that would be on my next pay check two days later or two weeks later, whatever the case was, I had to have it now. Two weeks would pass by, my pay check would get deposited and I’ve long forgotten about the purchase I made two weeks previously. Yeah I racked up my credit card by another $300, so what? I’ll pay it back on the next check. Sadly, the next check would come and go, with only the minimum balance being paid. Eventually time took its toll and I was maxed out on my credit card.
Living la vida loca
That was my life, from the end of my teen years to my mid twenties. I enjoyed life to the fullest. Parties, shopping, travel, weekend getaways, toys for the car and anything else in between. I partied 3 to 4 times a week. Seemed like there was always something happening every night. The nights I didn’t go out, either I had to get up super early for school and/or work or my parents made me feel guilty for going out too many times this week. During this time, I got offered by a financial institution a low interest (or so I thought) line of credit. I took it wholeheartedly. How could I not? More cash to blow and another backup source to when I max my credit card out. Sadly, it caught up to me, much like the credit card. With one credit card maxed out and a line of credit maxed, it all came to a slow halt. Eventually, a good chunk of my money was going towards paying minimum required for line of credit and credit card.
Time to grow up
After months of paying only the minimums, I was not going nowhere. Credit was still virtually maxed out. I started applying more frequent payments and slightly larger payments than the minimum required. Still, I was unhappy with how much I repaid. During this time, I also purchased my first home and it was harder to find money to pay down this debt. Finally, it dawned on me one night. Even though I was responsible to paying my creditors on time, I knew I didn’t want to owe and keep paying interest forever. A change needed to be put in place. And it happened, really fast too. My first ever budget was born. I tracked my spending. I knew how much I was bringing in and how much my fixed expenses were costing me, leaving me with “X” amount of money left over for life and variable expenses. For the first time I actually knew this. Finally, after much number crunching, thinking and a lot of frustration, I committed to my self. Committed to eliminating my debt and becoming debt free, for good and at any cost. Even the cost of totally eliminating my social life. Pulling my self out of the social scene, while not shopping pointlessly for unnecessary items. After months of virtually having no social life, it finally started to pay off. Debt was slowly reducing and I started to see the light at the end of the tunnel. Now I’m totally committed to my goal of living debt free, through living below my means, while the light in the tunnel keeps getting brighter everyday.