Oh yeah. The one and only time I used a credit card at an ATM, it was like magic. The machine gave me money! I was stunned, and then scared. This was way too easy.
The next week I was at the credit union filling out the papers for the home equity loan and cancelling the cards.
Like everyone else, we get credit card offers in the mail every day. I’m just glad we stopped while our credit rating/score was still good, and we hadn’t missed any payments.
You can cut down on the mail offers here. Unfortunately it doesn’t work for companies that go outside credit reporting agencies to compile mailing lists. I would say that signing up for it reduced my credit card junk mail by 75%.
I took out student loans to go to graduate school before I turned 70 and didn’t have the energy for it anymore.
OTOH, my debt is considerably lower compared to some of my classmates. Mainly because (admittedly under duress) my parents forced me to go to a cheap public university for undergrad that gave me an academic scholarship. I went to a public school for grad as well, but I was out-of-state so it was the same as paying for a private school, since I was subsidising my classmates.
I don’t expect anyone to feel bad or sympathetic towards me because I have an exorbitant sum hanging over my head. I think I’ve pretty much decided to stick with my current employers and they’re going to write off some of it for me (though not as much as they used to before the Iraq war). And taking out those loans gave me a very stable career.
No credit card debt-my parents are very self-made and my mom works in finance, as do I. I shudder to think what they would say if I ever carried a balance. But I was just discussing this with Dinsdale-because I make less money compared to some of my classmates I don’t get to have my 401K, cash savings AND a BMW. And sometimes it does suck because I have gotten more than 1 comment about how I still drive a Civic from friends who work at places like Latham or Jones Day. Or about how I don’t have the designer furniture condos like them. THAT’s the only reason I don’t carry a balance. I lived in a studio apartment in the hood for 2 years until my parents finally forced me to spend some money to move into a nice neighbourhood.
shrug I guess it’s a trade-off. Still don’t regret the debt though. I only have 8 years of payments left. The minute that’s paid off all the money I was spending for the loans can get rolled back into savings-but I wouldn’t have the income potential I do now without having taken it out to begin with.
Virtually all the debt I have is from student loans. I have 11k in loans but I’m still in school so I haven’t started paying those yet. My credit card balances are relatively low and my limits are pretty low so I can’t really go that crazy with those. I have a friend whose dad just paid his credit card debt for him. He settled it for around 17k but he actually owed more, so he’ll be paying his dad back for a long time. To top that off he owes about 14k in student loans. This guy is 27 and still lives at home and has an unbelievable amount of debt. And I still don’t think hes really learned anything, he told me the other day he wanted to buy an iphone and I asked him why he needed one since he has a perfectly fine cell phone already. Another time we were in the mall and he wanted to spend 12 bucks on a massage the day after he finally settled with the credit card companies.
The ex-husband’s way of balancing a budget.
Add up utilities and fixed expenses.
Add in a “reasonable amount” for food
Add in the minimum payment for all the cards
If there’s $10 left, that means that “we” can go shopping and spend $100, because that will result in a $10 raise in next month’s minimum charge.
Hitting McDonald’s with the kids wasn’t reasonable, because that would wipe out a $100 shopping trip. The man enjoyed shopping. Thought I was a killjoy because I didn’t. Thought I was being unreasonable for being nervous because those calculations included overtime, which could be reduced any month without notice.
And if a bill was late it was my fault, both because I had overdone it at the grocery store and because I was the one who was supposed to write the checks.
I so wish I could say that I dumped him.
It looks like the big one I forgot was student loans. I managed to not rack up any because I took an extra year and did a co-op program thus paying my way through undergrad and research assistantships paid for grad school. Since my sister has a sizable student loan that’s taking a while to pay off since she’s a primary school teacher, I shouldn’t have missed this.
It seems another one I missed was unexpected occurences such as losing a job or substatntial car repairs before managing to save up a few months buffer of expenses. I suppose this could count as mismanagement if the person had the ability to lower expenses and save up but didn’t. Personally I think the 3-month guideline is too low and it’s better to save at least a year’s worth of expenses if you can.
I didn’t realize how high the number of medical instances causing financial hardships. A good argument for nationalized health care in my opinion.
Maybe the reason most of my personal experiences seem to be meeting people mismanaging their finances by living above their means is either confimation bias or possibly this group has a higher percentage of those who like to flaunt their spending habits. Maybe if you get into financial trouble by other means you’re not as likely to go around announcing it.
For me, it was because I wasn’t paying attention and I didn’t want to wait for anything. I’m out of debt now and working very hard at paying attention and making good choices.
I’m a little cynical on this subject because of my husband’s experiences. He sells cars, and the amount of people that come in wanting a new shiny car while they still owe $12,000 on a car worth $6000 makes him want to weep. So I’m probably getting a skewed sample of those in debt because of bad decisions vs. genuine crises. But don’t kid yourself … those people are out there, in droves.
Well, hey… let me be the one then to step up and say that I’m in massive debt because I’m an idiot.
18 years of marriage, 10 of that in the Air Force. The whole time we’re spending beyond our means. I was an idiot for letting it happen. We’d fight about it constantly, but nothing ever changed.
Separated in February, and since then I’ve taken control of my finances and am slowly digging my way out. It’s going to take a few years though.
I had loans from attending an expensive, private college. Then, right out of college, I got a $28k/year job doing administration. I took it because it was my first/only offer. Living in NYC, this is hard to get by on. Then, after almost a year, things didn’t work out with the place and I was let go. While I temped, I used credit to get by. By the time I found a permanent job, I was a few thousand in the hole. I’ve been trying to pay massively every month to get rid of it, but I just had another debacle and lost my job. Now I’m on unemployment AGAIN, living on my severance package, and I feel like I’m just going to accumulate more debt while I try to find another job. Sometimes it feels like it will never end.
Ice Machine, I don’t think it’s necessarily a prejudice to think many people run into debt because of money mismanagement. It’s a blessing that you seemed to intuitively understand how to manage money, but a lot of people have to learn things the hard way. Most of us pick up cues from how our parents managed things, and we live in a world full of contradictory messages about what we should do with our money. I don’t understand what sympathy has to do with it though–people inadvertently do all sorts of stupid shit to hurt themselves, why would mismanaging money be any different? I tend not to judge people for their ignorance until it becomes willful.
I really think some sort of financial management education should be mandatory in high school, and possibly even sooner. Would have saved me a lot of grief. My mother tried to teach me how to save, but she refused to discuss anything pertaining her financial situation of her approach to spending/saving with me, because it was ‘‘none of my business.’’ I think parents should take an active approach in teaching their kids about money. But many of them won’t, much like sex ed… so it should be taught IMHO.
I just wanted to encourage and congratulate all of you who cut the denial and bit the bullet so you could struggle your way out of debt. You’re brave, smart, wise, and inspirational. As you’ve learned, it isn’t so much a matter of knowing something as it is of becoming something. Your character speaks well of you. […tip o’ the hat…]
Technically, student loans, but in reality the major financial impact was the occupation cost of the time taken to go to school. Since I turned my back on a well paying job to go to school, the savings that were not made for a decade early on would have grown to a significant amount, plus, with that job I would now be retired on an 80% pension. Just the price of happiness – well worth the financial hit.
Another one for student debt.
College is $32k a year, I’ll be leaving with around $30k in debt if my estimations are correct.
I can’t even comprehend that amount of money. My dad would say that “Oh, that’s just the price for a new car, it’s not that bad!” but he seems to forget that he’s trying to tell this to a student who has had a maximum of $7k in her bank account at once (and that was just a stipend for my study abroad from the college, so I was still in debt at the time!).
If anything, it makes me want to save my money to cause as little damage as possible. I hoard like a hamster. If I had the hamster cheeks, I’d probably store money in them.
My debt is scary. I think I’m currently around, oh…120k.
Ha. Beat that.
Just do what everybody neglects to do: Add in your mortgage.
$300k home loan, $16k car loan, $10k car loan, $3k credit card and dental-work debt.
But we have 8 months savings and are living on a single income temporarily. The monthly net flow is -1100 a month. -100 a month if we dropped daycare.
It’s comforting to know you can go more than half a year without having to sell your stuff to take care of it.
I’ll tell you guys the honest damned truth - I know better but I spend it anyway. I lie to my boyfriend about how much money I spend, because he’s so good! He just now broke down and got a credit card because of his business, and he never carries a balance. He would in an emergency, but he hasn’t yet. And here I am “making room” on the card for some stupid-ass thing! My refrigerator died for a second time, so I got a new one. I got the one I wanted, not the one I could afford. So there’s another bill, and I better pay it off before the interest catches up. It’s stupid, seriously, and I have got to stop. When I got my house, I got serious about it and paid it all down, but I’m back up to 6 grand again. I’m planning on sending all my tax refund money that way and trying to buckle down again, but it’s a cycle with me and it makes me furious and ashamed.
I will be debt free, barring any emergencies, in three years.
Unlike most here, I do not have student debt. I went to undergrad and grad school basically free. I was poor in grad school, but my credit card debt was basically nill. I think the most I had on it during that time was $1000, which I paid off soon enough.
And then I spent three months unemployed after graduation. Stupid me, I continued to live as if I was receiving a stipend, mostly because I was depressed about being unemployed and also because I felt like I would eventually get a job and be able to pay off the debts. I finally did get a job but it was a thousand miles away. I didn’t have a lot of stuff to move, but I had enough to warrant a moving van. Then I lived in a hotel for ten days while I looked for housing down there, and I ended up choosing an expensive place in a pricey neighborhood because I wanted to live the life of a Ph.D, not the life of a broke graduate student. Meanwhile, I was pouring money in my old jalopey that kept breaking down and buying brand new furnishings for my “nice” apartment because I was tired of embarrassing hand-me-downs. Before I knew it, I was dealing with thousands of dollars of debt. Because I was unaccostomed to it, I didn’t know that I had to pay more than the minimum payment to make a dent in it. I also didn’t know that the credit card company was taking advantage of me with an exorbitant interest rate. It didn’t help that my salary was barely keeping me above water.
Still, I was doing a good job at chipping away with it until my most recent move to VA. Because I had more stuff–stuff I didn’t want to give away this time–I got a moving company to transport my stuff. And I had to pay a big penalty for breaking my lease. Little things have also contributed–like repairs on my car and splurges with furnishings for my new pad, and a cruise I’m planning to take with my family. So my debt is worse now, even though my cost of living and salary have improved considerably.
Which is unfortunate and stupid, especially since I don’t have any toys (no cell phone, no Ipod, no nice clothes, no nice car) to show for it. I’m wasting so much money, money that should be going into savings for a house. But what savings? I have an emergency fund, something to tide me over for a month just in case I lost my job, but take that away and I have nothing. I hate that out of all the statistics that can apply to me, it’s this one.
Two rules that keep me from making purchases I can’t afford:
My credit cards live in a filing cabinet at home. I do not carry them with me unless I am going on a trip and might need them in an emergency. They are for emergencies only. Everything I buy is with my Visa check card. If it comes straight out of my bank account, it is much harder to overspend.
Any purchase over $50 for a non-necessity item, I have to think about for at least 3 days.
Back when I did have money, I was a bit of a recreational spender. These two rules nipped it in the bud.
It’s all student loans. By the time I graduate in a year and a half I will have spent 9 years in higher education. That adds up to a lot of debt. But I’m regarding it as an investment. I have no credit card debt. The company must hate me. I’m sure they’ve spent more administering my account and mailing statements than I’ve paid in interest and fees.
The most short-term debt I ever carried was $8000 in credit card transactions. That ceiling included payments on a car. I ran it up while working my way through school and it was to maintain a lifestyle. It was a deliberate and conscious move on my part. I structured my finances by always keeping a low overhead of debt.
My formula was as follows: instead of renting I bought a used mobile home and a new car. I didn’t want maintenance problems while going to school. After 4 years I sold the mobile home and used the money as a down payment for a house. Since the payments were so low I doubled them to pay the house off in 5 years. I paid the house off early because I didn’t think the company I worked for at the time would last (it didn’t). During this time I ran up the card debt. At no time was I without the assets to liquidate this debt if it became necessary. I could have cashed in stock or other liquidable assets. When my house was paid off I took a line of credit against it and the interest on that card was prime+1 which took off about $1,800 in interest charges. It took over a year to pay it off. I now opperate on a cash basis but might consider taking a partial loan on a car to keep emergency funds in the bank.
I fall in the category of not understanding why people don’t budget their money. Every time gas goes up to 3 dollars I have to listen to people bitch about how unfair it is and then watch them buy lottery tickets.
My parents lived during the Great Depression. They didn’t have cell phones, or ipods or computers or dishwashers, or VCR’s/DVD’s, or stereos, or air conditioning, or microwaves, or a thousand other do-dads that we “can’t” live without. When I was a kid they had TV trays for end tables. They only bought 1 set of furniture during their entire lives. ONE. They knew how to make a budget (without a calculator) and we were always the better for it.
IMO, what is lacking today is the basic skill of budgeting that should be taught by parents.