Blog Challenge #3 - the "grown-up" moment

Blog Challenge #3 (somehow I missed #2, & even this one is late):

What is a specific moment/event that made you realize you were truly "a grown-up"?

I was standing in line at a bakery my family had gone to for generations. I eyed the chocolate cakes and cherry pies and vanilla eclairs with my still child-like enthusiasm for sweets, waiting my turn. My number was called and I handed over my credit card to buy a twenty-five dollar "Dream of Cream" cake for my boyfriend's birthday. In a moment, my adulthood began.

For over 10 years I had been living on credit, always finding a way to make my lifestyle last just a little bit longer. I didn't just ignore financial advice, I avoided it completely. All of my life I wanted to be independent, to go where I wanted, when I wanted. I moved out when I was 17, I traveled to Europe at least four times before I was 26, took roadtrips on a whim and kept my calendar filled with concerts and other pricey events. Problem was that I put nearly all of it on credit cards. Of course, I did work, but my jobs were first low-paying retail, then after college, entry level positions that I hoped would get me further in my careers (plural since I switched careers from investigation work to the travel business a few years after getting my B.A. degree in Social Science with a concentration in Criminal Justice ).

I wanted to be independent, but my lifestyle wasn't giving me freedom, it was destining me for dependence. I was able to make the minimum payments on all my credit cards and figured one day I'd have enough money to pay them off, or maybe not, but who cared because I was living the life I had dreamed about. I didn't even know I was already a slave to debt.

I had begun to notice my interest rates were slowly inching up and I can't say that I always paid my bills on time. I started out good, then got haphazard with my commitments and was often at least a few days behind, sometimes as far as a month off. Soon my interest rates had jumped to nearly 30%. At that point I had about $15,000 in debt on credit cards. Every month I saw the balances get larger & larger even when I was doing my best to not use the cards. My minimum payments, though just 2 percent or so on my balance, were beginning to get harder and harder to pay. I was drowning.

So back to the bakery that day in November. After giving my card to the woman behind the counter I heard the words which would eventually make me grow-up: "I'm sorry, Miss, this card's been declined." I sputtered a bit, but having had to break such news to my customers in the past I knew the best thing would just be to play it cool. "Oh, I wonder why that is. No matter, can I write a check?" I'm not sure why a business would accept a check from someone who's credit card was just declined, but they did. I slunk out of the bakery wondering what went wrong.

I came home and looked over my credit card statement. The interest on my card had snowballed so much that even though I had made a payment the interest amount added put me over my limit. I could keep paying it down, but the interest would just keep fighting me back. It was at that point that I knew I needed to grow up and face my problems with debt head-on. Not that my first call wasn't to one of my other credit cards asking to extend my limit... they passed on the opportunity. In any case, in that moment I realized my youth had just stuck the adult me with a big, literal, bill and it was due immediately.

This isn't a personal finance blog, and really nothing I did to relieve my debt is probably relevant to anyone else, especially since there ended up being a lot of unusual situations that are completely unique to me, but since I've brought you along this far I'll go ahead and tell you how I got out of debt. Quite a bit of it is based on luck, but keeping it off has been where I've made the real transformation. Anyway:

-A month after the bakery incident my apartment got broken into. I needed a place to stay, stat, and my boyfriend's mother invited me to live with them. That immediately saved me about $800.00 in rent a month.

-Four months after I moved in with my boyfriend & his mother, my boyfriend proposed to me. I had kept my debt problem as much of a secret as I could from him, but when we moved to a new apartment, just the two of us, I realized quickly that my problems were about to become his problems. I spilled the beans and we were able to work on a plan.

-Our first plan of attack was to transfer my balances to his credit cards. He has never made a late payment, never just paid the minimum and in doing so had several cards with zero percent interest rates and a credit score of nearly 850. This decision was not made lightly, at least not by him. To take on my debt was a huge leap for him, since he had been burned in the past by friends needing his financial help & then abandoning him. He poured over my statements and our finances and could see no other way to stop me from drowning in my debt. By transferring to the zero balance cards we were able to stop any further debt from accumulating. It was a good start.

-Next, we both got jobs that more than doubled our current income. His income was easy to increase, because when we met he was in a teacher credential program and was unemployed for the year before we got engaged. He finished the program and was hired on as a long-term substitute at first, and then eventually as a full-time teacher. I continued to work at my low paying travel job for another year until we got married. I then was able to find a job that paid me considerably more than I was used to, and was steady - not based on fluctuating commission. I had to sacrifice my short-ish commute for one bordering on masochism, but it actually still allowed me to get home at the same time that I was used to, so no family time was sacrificed. We were able to pretty effectively hack away at our debt by getting jobs that actually paid well. Once the debt was gone we were able to out together a nice emergency fund and also contribute the maximum to our Roth IRAs.

-We looked at our expenses & realized we were spending almost $1,000 a month on eating out. I learned to cook. He learned to cook. We still eat out more than we should, but we're working on it.

-We changed our cell phone plans, negotiated a discount on cable and found less expensive car insurance.

-We started selling our things on Craigslist. We started looking out for items left near the dumpsters and selling that stuff on Craigslist. One day I came home and my apartment looked like it was from an episode of Sanford & Son. Our neighbors were moving out and offered all of there left-over stuff to my husband. He readily accepted their lamps, mirrors, couches, tv... and then put it all for sale on Craigslist. We made about $300.00 on their stuff. Every little extra bit that we brought in went to paying off our debt. Even now I keep my eyes open for dumpster finds, and just last month found a set of weights that we sold for $35.00.

-We simply minimized our spending. Our apartment wasn't cheap, but my husband didn't want to trade living in a nice, safe place near his family for saving a few hundred dollars a month, so we sacrificed elsewhere.

-We made lots & lots of small and large changes until we were finally completely debt free. We've been debt free for about 3 years now, I believe. Of course, now we've bought a house, so we have that debt about to start, but by our calculations in the end our yearly house expenses amount, after tax breaks and the guaranteed monthly rent from my mother-in-law, and including insurance, HOA fees and a small budget for maintenance, our house expenses will be almost equivalent to our rent which we are affording easily right now.

-I love to travel, and for the last 4 years all but two international trips have been paid for completely by my employer (Costa Rica, Iceland, Guatemala, Ecuador/Galapagos Islands, and Venice/Croatia). On several of those my husband has been able to join me for a nominal fee.

-Another work budget-saver is that I work in a remote area with no options to go out for lunch. I never brought my lunch before, but now, for four years I have had no other choice. My hubby helps me out by making my lunch almost every day.

It's an amazing feeling to be free from debt, and to have the control over my life that I always desired, to truly be independent, to truly be an adult.