Friday marked a monumental moment in history for me.
Dear readers, for the first time in 10 years, I am 100% free of credit debt.
I honestly did not expect the delirious bout of happiness I received upon immediately clearing all my accounts. It stayed with me all day, all weekend, and every minute. I feel like one of my biggest life burdens has been lifted from my shoulders, because it HAS.
I’m going to give you an honest history of my debt and how it became so out of control.
I’ve always wondered why our high school education never included anything about handling financials and dealing with the particulars of living as an adult. Like many 18 year olds, I was handed freedom from the constraints of my hometown when I left for university…and at that same time, I was handed a hefty student loan.
Had I known that I would be paying off my education until well into my 30s, I would have done things very differently. I had regarded my loans as “free money,” something to worry about later. And damn, I did have fun with it. But no one ever sits you down to tell you, “Listen girl, you can do your English degree and pursue whatever you’re passionate in. But you should probably know you’re only going to make minimum wage for many years, and you’ll be trapped in a constant cycle of debt and self-doubt and scraping pennies.”
The student loan debt is actually the only remaining debt I have. I’m lucky, compared to most students, because I was awarded several scholarships, assistance for low-income families, AND I smartened up and worked through my fourth year of school. (Full-time, with a full-time course load, and I still made the honour roll. No excuses, people.)
BUT that debt was the beginning of a sort of “credit lifestyle.” The act of borrowing with the belief and hope that at some point I’d be able to pay it all back.
That, my friends, is 100% bullshit.
I then took out a $10k student line of credit to study in England. While it was well worth the experience, I did NOT need to spend $7k in less than two months. Heavens mercy, how is that EVEN POSSIBLE when you’re a student?
I wiped out that line of credit on Friday as well.
My other mistakes were much weightier. When I was working full-time as a tech writer, I desperately wanted Lasik eye surgery. I applied for their loan, which actually turned out to be a high-interest Visa. I went for it anyway, knowing that as a full-time worker, I could easily pay it off.
Guess what? I got laid off. That $75 monthly payment suddenly became a massive amount I couldn’t possibly afford to fork over.
BUT thank god for that ‘ol Mastercard with its $6000 limit. Yes, $6000. Do you remember that time I was newly laid-off and gallivanting around Nova Scotia and Newfoundland? Guess who paid for all that? Good ‘ol Mastercard.
Then I applied for an American Express card to collect a few thousand Airmiles. And then I applied for a Future Shop credit card so I could upgrade my camera gear.
The cycle I got stuck in was overwhelming and suffocating. By the time my credit card was nearly maxed out at $5400, I was paying upwards of $100/m in INTEREST. INTEREST! I’d take my freelance payments and dump most of it on my credit cards, thus leaving a very small amount in my bank account. And then I’d get overdrawn due to an automated payment I wasn’t expecting, and I’d get charged extra for the overdraft.
You’re probably thinking, “Why the feck didn’t you just track your expenses better?”
And oh man, I tried. But it’s easy to forget that credit is money, especially when you don’t really EARN it. And I watched my bank account be sucked dry every month just thinking hey, that’s life.
It isn’t. Financial stress has been my number one factor holding me back in my life. I am so proud to say that from now on, the money I’ll be making will be my OWN.
(Well, when you subtract living expenses, groceries, Internet bills, etc.)
How did I do it all? The story isn’t nearly as inspirational as you think. Does anyone remember last year when I was planning on buying some property as an investment and then renting out rooms to earn an income? Turns out nobody wants to hand over a mortgage to a 26-year-old freelancer, despite perfect credit history and a full savings account.
I held onto that nest egg for the past year, thinking I could make it work. Over $7k in savings while I dumped endless money on my credit cards.
DO YOU SEE WHY I THINK WE NEED FINANCIAL INSTRUCTION IN HIGH SCHOOL YET?
So unfortunately, while I now have no savings to fall back on (risky biz if you’re a freelancer), I can easily start saving again. And you know, even putting aside some for travel. Or a cute outfit every now and then.
AND of course there’s the possibility I’ll make all the same mistakes again. But nowadays I work so fecking hard for my money, watching it slip away is heartbreaking.
So here’s to spending more wisely and saving more carefully. Cheers to a debt-free life!