A few weeks ago, something very exciting happened for us financially. No, we didn’t win the lottery (although we are going to the horse races this weekend, so fingers crossed). We paid off all of our credit card debt.
Did you know that the average debt per household
with credit card debt is $15,956* ??
Pretty ridiculous, right?
Growing up, my dad always
lectured reminded me that most young people had credit card debt because they bought things they couldn’t afford to pay for. He always stressed that while credit cards are good to build your credit rating, you should pay off the balance each month so you don’t end up with debt and high interest fees.
I really did take my dad’s lessons to heart and am proud to say that with the help of scholarships, two part-time jobs and a frugal budget, I graduated college with absolutely zero debt. I got a credit card with a low limit and set it to pay off the balance automatically each month. I didn’t have any savings, but I also didn’t owe any money so as far as I was concerned I was in a good place financially.
And then I planned a wedding.
You guys see where this story is going, right? We were engaged for a year and a half and the budget was very strict in the beginning. We were setting aside about $900 a month at the time and that seemed like it would be enough combined with the money were getting from our parents. Everything was fine until about three months before the wedding. A few big unexpected non-wedding purchases came up and combined with many unplanned last minute non-budgeted wedding items, our bank account quickly dried up.
So, I made that wonderful and terrible phone call to the credit card company to raise the limit on both of my credit cards. I was relieved that we had some cushion with the ever increasing wedding purchases, but knew that I had also literally just written a check my ass couldn’t cash.
Having said that, we returned from our honeymoon in June with about $5,000 in credit card debt-all of it solely from our wedding. Our parents helped us some and we were very grateful, but we still ended up spending about $14,000 of our own money. Or the credit card company’s money, if you will. We vowed to pay it off in a few months. We paid off a few hundred dollars at a time until we knocked our debt down to about $3,000.
Then we decided to buy a house.
All the money that had been ear-marked for paying off credit cards went towards our down payment. We barely saved up enough to close on our home in December (seriously, we had about $200 in the bank the day after we closed) so Christmas gifts went, you guessed it, on the credit cards. For the entire next year, we would pay small amounts off the cards, but between new house expenses and repairs to our aging cars, we owed almost $9,000 at one point.
I didn’t understand how it had gotten so bad so quickly. I was anxious all the time and felt like we would never not be in debt. We were paying hundreds off dollars in interest fees alone each month.
I couldn’t believe I had become a statistic.
Slowly, over the last few months we were able to turn a corner. I sold a ton of paintings. I put my Christmas bonus towards the credit card. We were able to get a substantial tax return because of all the business expenses Jacob pays out of pocket.
One day a few weeks ago, I logged into all of my credit card accounts and saw a balance I hadn’t seen in two years.
Isn’t that a beautiful sight?
So, basically the moral of my story is don’t put anything on your credit cards that you couldn’t afford to pay for today. And don’t panic if you do find yourself in debt, just pay off as much as you can and don’t try to bargain with yourself. And listen to your dad.