Let's Talk About Debt, Baby

"I'd rather admit to cheating on my significant other than admit to making a foolish mistake with my money." - A Friend


From the moment I published the first post on this blog, people I know and people I don't have been quietly contacting me privately to say, "Me too".

Thank you. Knowing you are out there, knowing you've made some of the same decisions I have, gives me the courage to keep talking.

I started this blog for a couple of reasons:

1) I didn't want Infinite Wisdom to become only about money as I clearly have a lot to say on the subject, and
2) I figured if I talked about it - the struggles, the victories, the misshaps - so that others could hear and watch, I would hold myself much more accountable.

After all, it's much easier to disappoint myself than to disappoint you - whoever you are.

What I didn't know would happen, and it is a most unexpected and happy surprise, is that now I'm talking, so are some of you and not just to me but to each other!

Case in point: I went out to my favorite hang out last night with the BFF. Mid-way through the night, the topic of this blog came up and, pretty soon, a half dozen of us were standing around freely sharing how much we owed and why, what we were doing and prepared to do to pay it down/off, sharing the mistakes we'd made, giving each other support and suggestions for ways to cut expenses to free up cash.

It. Felt. So. Good!

There wasn't any shame. We weren't hiding in shame behind our walls of debt. We weren't even peeking around them. For a little while, we all opened the windows of our debt houses and began to clear the air, asking each other to come visit. It was inspiring and affirming, to say the least.

Crap. I hate to admit this but, I think perhaps I've managed to form a support group. Although, hopefully, one without meetings and group hugs. I hate meetings (and group hugs). There are way too many of them in this world already. I'd rather just figure out ways to have fun together for cheap.

But if it's helping us all to talk about it? Then I'm all for it. Just, you know, let's keep the group hugging down to a minimum, OK? Thanks.

Photo Credit: mothergeorge

Interlude: Monkey Wrenches

There are precisely two steps virtually all debt experts will tell you to do BEFORE you start trying to get out of debt:

1) Build up a savings of $1,000 and
2) Destroy all credit cards.

You may have noticed I've glossed over those just a bit - particularly #2.

The reasoning behind these steps is quite sound. If you have savings to pull you through a minor emergency, you won't rely on your cards...especially if those cards aren't there to be relied upon.

How many of you have the "emergency credit card" for all things emergency? And those of you who do keep an emergency credit card, when was the last time you charged a non-emergency purchase on it?

Recently, a friend of mine told me how her son had gotten promoted but his new position required him to wear dress slacks to work...something he didn't have. So she gave him the go ahead to put the pants on the "emergency" credit card rather than giving him the cash to go buy pants. Why? Because she didn't have the cash to give him and he needed new pants.

Was this an emergency or a good reason to teach him the benefits of the Goodwill store?

I won't answer that. It's not my business to decide what is an emergency to someone else and what is not. Surely, I have no business pointing my bossy little finger in anyone's face when it comes to using credit cards improperly. But it does beg the question...what exactly is a credit card-worthy emergency?

Now, the reason why I jumped into the debt-reduction pool before I'd built up savings - against the advice of every financial expert living and dead - and began treading water for dear life prior to building up savings is because, just like with the purchases I've been known to put on my cards, I have a wee tiny problem with instant gratification. Impulse control. I made the decision to do this thing and by gum! I wanted to start Right. This. Second. The sooner I start, the sooner I'm done...right?

I figured hey! I'll build the savings a bit at a time while I'm paying down the debt and everything will be G-R-O-O-V-Y. You know this though, because I outlined it in Part II of my plan. Was that just yesterday?

*sigh*

I've known I needed new tires for quite some time. I've known it. I planned for it. And I was able to wait until there was a super duper sale on them at my local Firestone. So, this morning, I headed out to aforementioned Firestone to get my car some new rubbery goodness and to give her a good old lube job for good measure...also planned.

What I'd not planned on was hearing that I needed new front brake pads and how!

Jane: How long do I have?
Car Guy: A month...at best. Maybe.

That's the kind of diagnosis no one wants to hear from a doctor or a mechanic.

So here I am. I've got no savings because I don't get paid until Tuesday and my budget's been honed down to give me just enough to toss $40 from that paycheck into savings for emergencies. Emergencies kinda like this one.

Luckily, this emergency isn't a whopper. The mechanic quoted me $160+tax for the brake pads and installation. I took it under advisement, left the store, got in my car, and panicked...just a little. What the hell am I going to do? After I luxuriated in that panic for a few minutes, I took a few deep breaths and said to myself, "OK, Self. What have we got to cover this? We've got that $80 extra payment you were going to send in to your card company. There! That's half of it right there. And we've got the $40 we were going to put into savings for just such an emergency. We're approximately $50 shy then. What now?"

I had 3 choices.

1) Take the $50 from the mad money budget which does have a bit of wriggle room...but not much.
2) Shop around for a better deal...if I can find it.
3) Drive up to where my cards are being stored and retrieve one in order to buy new brakes.

Ah yes! There it is - that #3. I'll bet you were wondering if I'd gone so far as to destroy my cards like a good little debt reductionist. And the answer to that? Is a resounding NO.

It's purely psychological and indicative of just what a hold those cards have over me. I am fully aware of it. There is this gnawing little voice chewing in my ear saying, "But what if there's a revolution? What if the zombie apocalypse happens? What if, gawd forbid, the Tea Party gains control of Congress?!" I'll tell you what happens...I flee. And I shall flee by using my credit cards without a second thought to it.

Photo Credit: Yet Another Dave

Those are real emergencies. And, as I've demonstrated, emergencies come up just when you least expect them.

So, I didn't destroy my cards even though I know I'm supposed to. They tell me credit cards are a safety net and I don't need a safety net. Clearly, these people have never been faced with the zombie apocalypse without a net.

Instead, I put my cards in an envelope, drove it to the "wilds" of the suburban north, and watched as my BFF, Matt, put them into his fire safe...and then closed the door with the sound of finality.

That's where the cards are. They still exist, I can still get them if I absolutely must, but in order to do so, I have to drive a fair piece, get past Matt, get past the other Matt, and get past the fire safe door. I'm fairly certain that's about as destroyed and inaccessible as they're going to get...at least, for now, while I'm finding my footing and get more comfortable with the way things will have to be from now on.

Hopefully, the Matts won't be the first men down during the apocalypse...or the Tea Party revolution.

Back to my brake replacement options then. I eliminated #3 right away (VICTORY!) leaving myself with #1 and #2. While I am horrible at asserting myself and asking for better deals, it seemed to me I'd be best off learning how to meet these challenges head on and try to negotiate as much as I can to, hopefully, keep myself from derailing.

I let my fingers do the walking then. I made calls to a couple of garages, I comparison shopped around the internet, and then, in desperation, I put an inquiry out to a friend who'd just had her own brakes done by another of our mutual friends - a friend who is a mechanic and also owns the equipment to do this kind of work. Turns out, our friend is not only willing to help me out, he'll get me the parts at cost, and charge me a most reasonable amount for labor. I expect to save about $70. My appointment with him is next week. Crisis averted.

Thank goodness for a large circle of friends whose talents are many and varied.

Will I stop paying down debt in order to build savings, pushing my plan back an additional 4 months?

Nope.

I'm sticking to The Plan.

But I may re-evaluate how much I set aside each month for contingency and split the extra payments in half for awhile to give myself a better cushion while still working toward the ultimate goal.

In spite of the panic, today was a good day. I got new, quality tires and a long-overdue oil change, I found out I did not immediately jump for my credit card, and I advocated for myself and didn't take the bad news lying down. Victory, at least in this first battle, is mine.

The Plan, Part II: Cents and Sensibility



Photo Courtesy of Fun Fragrance


It's time (and not of the Hammer variety).

It's time to talk about the "B" word - that obnoxiously critical little tool needed to gain financial stability. The tool that's been mocking me daily for four years.

That's right. The Budget.

I have been actively budgeting and tracking my income and actual expenses now since January 1, 2007. In some places, it's truly cringeworthy. However, in light of my current circumstances - what I am attempting to do through this blog and my newfound debt-reductionist attitude - I'm awfully glad I have it.

Why?

Because it is a historical record of the last four years of my financial life. It is the most accurate, longest-running representation of My Bad I could have ever hoped to produce and I don't have to do it from memory...a good thing as memory often fails us when it's softening up the details.

Those who cannot remember the past are condemned to repeat it. - George Santayana

So, rather than examining it as a confirmation of my failures as a responsible adult, I chose to review it with an objective eye, combing it for what I can easily improve, learning from my mistakes.

There was some surprisingly good news!

First of all, I discovered it wasn't that I lacked cash or didn't have enough to cover my required expenses. The biggest problem is that I hadn't adjusted my budget to reflect changes in spending on the necessities.

For example: I had been consistently budgeting $300 a month for groceries and $200 a month for my "mad money" - my phrase for extra stuff...auto maintenance, hair cuts, cocktails, entertainment - and then budgeting the rest toward paying more on my debt. Those amounts HAD NOT CHANGED in four years!

Now, initially, those amounts were appropriate. My living situation was quite different from what it is now and feeding one person, 4 years ago, was much more easily done on $300. Especially when my diet back then consisted mainly of cheese and crackers. I also didn't drink then. Ever. 18 months later however, my living situation would dramatically change as would both my grocery and mad money needs.

But the budget didn't change to reflect the change in my circumstances except to indicate a rise in rent.

In order to compensate for this, I found I was spending both the grocery and mad money on groceries and using the extra money (after I'd paid it to my credit card company) for mad money - often overspending there too.

What do you mean I'm overdrawn? I still have more checks! - Unknown

Brilliant, I am.

And for my next trick...

Additionally, it was also clear that there were certain annual expenses (such as car tag renewal and, until this year, additional income tax payments, among others) - expected, dreaded expenses - I willfully ignored until it was down to the wire to pay them.

What happens when I don't budget for something even though I know it's coming?

"Why, hello, Mr. Mastercard! How lovely to see you lazily lounging there in my Prada knockoff wallet. I've got a little job for you to do."

Ahem.

I never said I wouldn't embarrass myself thoroughly while airing my clearly dirty underwear for all of you to see.



Now, I would like to take a brief opportunity to point out two very important things I was doing exactly right. Things I'm quite proud of that have been and will continue to help me. 3 years ago, I began contributing to both my company's tax-deferred retirement plan and their flexible spending account plan.

I know I may never be able to officially retire. I don't really expect to. But I'm keeping myself out of a higher tax bracket now and building some savings. I also have the ability, in a truly catastrophic, dire emergency, to request a low-interest loan from that account, penalty free. I say dire because I can already feel the laser beams of disapproval emanating from the eyes of every financial advisor in the universe as if to say, "Have we taught you nothing?!"

Yes, financial advisor people, you totally have taught me. But I obviously haven't been listening. And I'll do what I have to do if it comes right down to it as a very last resort. I mean, the credit cards are a last resort so, you know, just before that. OK? Promise.

It's still savings, a nice little savings, and it's there. If I absolutely must. Which, right now, gives me some comfort.

As for the flexible spending account program, that's also pre-taxed money coming out of each paycheck and being set aside for me to use for medical/health-related expenses. Which means, for instance, if I have to have an emergency root canal and crown or have a health crisis and must be admitted to the hospital, my co-pays and deductible are funded.

So see? The lack of having any liquid savings of note isn't quite as scary as it first seemed. Right?

*crickets chirping*

Anyway! Back to my budget...

Perhaps the single most important aspect I uncovered during my budget review - and it took me some time to see it - is that, when I first designed it, I was quite clearly in the "painful purge" mindset. Meaning, I was in GET OUT OF DEBT FAST mode...no matter how much it hurt. So, it wasn't that the budget was exactly wrong, for some people it may have been just right, but, for me, it just wasn't reasonable or sustainable for any particular amount of time.

Anyway, after identifying my trouble spots or budgetary love handles, if you will, I gave a lot of thought about what I wanted to accomplish, tried to be completely honest with myself, and then I sat down earlier this month and did a complete overhaul of my budget.

My goals are three-fold:

1. Pay down my debt.
2. Save a little in a liquid account for minor emergencies.
3. Let myself enjoy my life and the process of being reasonable about my money.

Here are the major changes:

1. The grocery budget went up to $400. Additionally, Lex will contribute his own $400. This also covers consumable toiletries, paper products, laundry soap, laundry quarters, and the like. We are going to try to pare this down without sacrificing quality but, for now, it stands. I'd rather have extra at month end than not enough.

2. The mad money line item went up too. I have given myself a $100/week allowance to be used for just...whatever. However, wine has to come out of mad money and not the grocery budget.

3. While the incidental line item didn't change ($80/month), it will truly be used for incidentals - auto maintenance, haircuts - things that come up frequently enough to expect and plan for but things that only come up every once in awhile. That $80 will go into my "high-yield" savings account (high-yield, HA! If you call 1.1% high-yield, that is. When I opened the account, the interest rate was at 4.5%) until needed.

4. Whatever is left unaccounted for on the budget after paying bills and myself has then been applied to my outstanding debt above the minimum payment already budgeted. I subscribe to the Debt Snowball philosophy - whereby I am working toward paying down my lowest balances first and working my way up to the highest balance last.

5. At month end, anything left over - even if it's a lonely nickel and including the cash in my wallet - will be swept over to my savings account to build up some liquidity until the savings account balance is at $1,000. After that, sweep and incidental funds will convert to debt payments until such time as the savings account dips below $1,000 at which time the process will revert back to the standard.

Following this plan, barring any unforeseen major events such as a loss of employment or limb (loss of limb is preferred...death and dismemberment insurance benefit and all), I will be debt free by January 31, 2013.

Slow and steady wins this race.

This budget, as you can see, isn't about getting out of debt as fast as possible. This budget is what I can maintain long term without A) losing my sanity and B) falling off the wagon and going on a binge. It's structured, certainly, but not choking me to death or making me cry.

And it's working so far.

While I didn't get to make a huge extra payment to my lowest balance card this month, I paid cash for my car tag renewals, have birthday money to put into savings (I used a little to register this domain and to buy a new mascara), and even have a little mad money left over to go out with the BFF this weekend.

We are going out this weekend, yes BFF?

And I didn't use my cards. Not even once.

Interlude: That Dirty American Secret

Do you want to know what appalls me the most about my debt?

No. It's not the dollar amount itself.

It's the shame I carry about all of it.

Even when I was fresh out of college and over $5,000 in debt, I didn't ever share the total debt I'd incurred with anyone save my Consumer Credit Counselor. Not even with my dad who had to have known it was extraordinary - and it was...then.

Until now, even Lex, my partner in nearly every way, didn't even know either my past high debt or my current high debt. Not even during those initial house-buying conversations did I reveal it to him I was so terribly ashamed by it.

But...why?

Why are debt and spending habits such shameful things to discuss? Why is it the #1 most taboo topic among couples?

I've been pondering this over the last few days because I've realized how deeply distressed I was to talk to Lex about my financial situation. I didn't want to admit that I, as successful as I'd become, at any given moment, could be in financial turmoil.

In my humble opinion, I think I may know the answer.

America is a paradoxical society.

On the one hand, we have financial gurus telling us, "Debt is bad! No more debt! Get out of it as quickly as you can. Just say no to credit!"

On the other, we are subjected to offers of 0% financing, credit cards, buy now and pay laters. And then, even if we're able to "resist" the special offers or are ineligible for them, we are bombarded by commercials and advertising suggesting, no DEMANDING, we spend spend SPEND! Appealing to every instant gratification bones in our bodies.

Even our own government, by way of the stimulus money nearly all of us received (twice), expected us to buy until we couldn't buy anymore...with cash or credit...to stimulate the economy, save our country, get this country moving again.

After we'd already over-consumed to the point where our economy - and the world economy - collapsed from over-spending.

*sigh*

Please do not misunderstand. I blame no one for my financial situation except myself. I've done this to me. I've been doing this to me for years and long before the financial meltdown of 2007! However, given the culture in which I was raised, I have to wonder if the debt and subsequent shame hasn't been societally created?

Really.

Don't you think it's terribly silly to whisper bad, dog, bad! And then encourage said dog to engage in the very same behavior for which you've chastised it?

No wonder we're all ashamed of ourselves. No wonder we're all feeling so terribly guilty. No wonder we're embarrassed to confide in our most beloved partners what we've done.

Even when it's not a crime.

We're led to believe it is a crime. And maybe, just maybe, it actually is.

The Plan, Part I: Turning Sense into Cents

I've mentioned I have A Plan, right?

Of course I have! And I'm sure you've all been sitting on the edge of your seats, waiting with baited breath for The Big Reveal hoping I have the magic key to financial freedom. Aren't you?

Well...here it is:

Spend less. Pay more.

That's it, in a nutshell.

Of course, there's a lot more detail behind it but the basic principle is just that: Spend less. Pay more. Oh yes, and save. If that sounds vaguely familiar - and it should if you've ever been on a diet - it's because it's the basic principle behind that pesky little weight problem the typical American Jerk (including me) has too.

No magic, just common sense.

The problem is I hate dieting. Hate hate HATE it. I don't like the idea of restricting anything - money or food - at least, not to the point of feeling deprived. Deprivation, to me, feels like I'm one of those shriveled up, tired raisins in the bottom of a box of store brand Raisin Bran. It leads to a binge/purge cycle...frantic, meaningless, reckless spending on things I will never use and, eventually, give away.

No bueno.

Besides, I've already been there, done that. I restricted my "financial diet" so much shedding that extra $5,000 in debt I had the first time, I'm not sure I really learned the lesson. In fact, I know I didn't or I wouldn't be where I am today. Instead of learning how to be reasonable in my spending, what I learned is that I could binge - sometimes for years - and then painfully restrict for a little while so that I could start the process all over again.

And that's just not particularly helpful. Hence, why I'm not at all interested in going that route again.

So the question is how can I shed the debt AND break the binge/purge cycle AND maintain some semblance of a quality life with as little hard work and pain as possible?

The very first step most experts will point out to a blossoming debt-reductionist such as myself - I mean, besides admitting I have a problem - is to know where my money goes. Luckily, that bit of work is something I've already done and know practically off the top of my head. Because, you see, I've been keeping a record of that very thing for literally years. I am, however, admittedly a tad bit OCD.

Now, when I say I've been keeping track for years, I don't mean I've kept every receipt and written down every penny I've spent and on what. But I have a running tally - a spreadsheet I created back at the beginning of 2007 when I first started trying to peck this thing to death - of what bills need paid and when, and how much "discretionary" income I'm left with after the obligations have been cleared. And then, at month end, and because I do nearly everything by debit (and, let's face it, credit) card, I run reports on what got spent and where outside of my fixed bills. Gas, cigarettes, grocery, dining out, wine, wine, and more wine. Then I plug those figures into the spreadsheet, overwriting the budgeted amounts, and I can see how I've done for the month.

Ahem.





As I've said then, I already know where I spend my money.

Now, if you're playing along and you don't know where you spend money or where you might be able to cut back and you've been using debit/credit cards for most purchases? You are within quick, easy reach of having a firm idea of where it all went just by logging onto your account and playing around with the reporting features offered by your bank and/or cardholders. I'd do at least a 3-4 month average and more, if you can, what with the holidays having just occurred. Holidays, as we all know, blow all finances to holy living hell.

If you spend only cash, then clearly you have no need of my advice *laughing*.

Seriously though. If you are one of a kind of people who just takes out hunks of cash as necessary and spends it until there's nothing but lint left, you may have to do a little pre-historic hunting and gathering to have a better understanding of just how many lattes you're really buying (or, in my case, cocktails).

Then, you make a list of all your bills and all your expenditures by category (you can be as vague or as specific as you like) and you assign each one a number...the average of the ACTUAL amounts you spent - not the ones you wished you'd spent - and add it all up.

If you're lucky, your total expense is already less than your net income. Why are you still only making your minimum payments again?

If you're like me, you are breaking even or maybe even a little upside down.

If you're way overspending, you'll see it immediately and really. Just. Stop. It...Now. Not only are you "bridging the gap" between your salary and expenses, you're hanging by your fingernails from the middle of the suspension bridge at Royal Gorge.

Photo courtesy of Fremont County

Now remember, I want to make this process - for me - as painless and work free as possible. But there is some work involved (we've done most of the hard work already) and there is a little pain. Because now that we know where we've spent our nickels and dimes? We have to decide where to cut back. And that can be rough.

There are eleventy-billion lists of practically painless ways to cut personal spending available on the internet. I know. I checked. And I've read them all.

Here are a couple of examples:

Being Frugal 101 Ways to Save Money

MSN Money Central 50 Ways to Trim Your Budget

At this point, it's really important to know yourself and your habits. Just because someone recommends doing your own oil change does not mean you should do your own oil change! Especially if you are, say, me. And frankly? If you ever find me elbow deep in Borax and baking soda attempting to make my own laundry soap? Please, by all means, put me out of my misery.

But there are some really decent tips out there.

Most of them, I'm already doing. For instance, I got rid of cable television...10 years ago about the time I got rid of the boyfriend. I don't belong to a gym and I seriously do work out at home or by taking walks. I had a bus pass through my work until just this month. But what I discovered is that I was still spending a lot of money on gas in addition to the $30 I was paying for the bus pass. So I've given the pass up for this year. That could have been a budgetary mistake given that gas - in January - has risen to nearly $3 a gallon in my city. Too late now. I'll work around it.

My problem then isn't that I have all of these "extra" luxuries like cable or Netflix or gym memberships or mani/pedis and massages I can cut out. The problem is that I:

A) Give my money away and
B) Love to socialize, drink wine, and travel.

So here are the list of things - the carbs - I'm trimming from my financial diet:

1) No more lunches out. I work less than 5 minutes away from my favorite Mediterranean restaurant in the metro area. But at $15 a pop? I can make my own hummus - fantastic hummus - and bring it with me to work.

2) No more charitable donations. This one absolutely kills me because I do love to support my favorite people and causes. I have a tremendous amount of guilt surrounding my decision to withdraw my financial support. But, by the same token, if my debt does not decrease, I will likely require those same charitable donations.

3) No more spontaneous Church o' Brunches. While I love bacon and eggs and bloody marys and congregating with friends, these are expensive endeavors - ones I should not afford.

4) Shop the heck out of grocery sales and clip coupons where applicable. Frankly? Our grocery budget is disgustingly inflated. And we don't even shop at the Whole Paycheck Foods. It's just that we buy what we want, when we want and have given no thought to how much it really costs. I am embarrassed to tell you then that, in the month of December, we spent no less than ONE THOUSAND DOLLARS at the grocery store.

Ahem.

5) Stick to my REASONABLE budget. I have a reasonable budget and I'll talk about it soon. The problem is that I've not, until now, been sticking to it. Rather, I've said to myself, "Self? You can get by with just sending in that minimum payment just this once in order to do [fill in the blank]." Unfortunately, that happens nearly every month.

6) Give up fancy schmancy salon shampoo and conditioner. While I will continue to have my fancy schmancy salon haircuts because A) my hair stylist is the BEST I'VE EVER HAD and B) because the $40 a cut every 8 weeks keeps me on a professional-looking level (necessary for my middle management job), the extra inflated dollars for salon quality product, right now, is unnecessary. I'm keeping my M.A.C. makeup though. For now. My skin thanks me. And again, we want as pain-free as possible...right?

*EDITED TO ADD:*

7) Enforce a moratorium on all travel. If it requires a hotel stay I'm responsible for, it's not in the budget.
So that's where I'm cutting back. If I do these things - and I am (or have at least for the last month) and will continue to do so  - I free up an extra $250 a month to go toward paying down debt.

I can, am, and will do this.

Watch me.

So. Now. Tell me. Where do you think you can cut back your own expenses relatively painlessly in order to make a dent in your own debt? You don't have to comment here to tell me. You can send me a private message telling me. Or you don't have to tell me at all. But I would love for you to think about it...really think about it...along with me. Please. I don't want to be alone.

Interlude: How Did I Get Here?

I graduated college with a 3.73 GPA, a liberal arts degree, and more than $5,000 in credit card debt.

As an unemployed graduate, panicked does not even begin to describe what I felt about that overwhelming number. Adding to that anxiety was the knowledge that I:

A) still did not know what I wanted to be when I grew up,
B) had few marketable skills, and
C) had no idea what kind of job I could get.

I went to college because I didn't want to work minimum wage anymore. However, I had no idea that, with a liberal arts degree, I'd come out of college with the inability to demand more. Had I been in a better financial position to begin with, I likely could have held out for a much more lucrative offer or I could have possibly gone back to school for a Master's. As it was, I took the first job offered me and then took on two more part time jobs at little more than minimum wage.

Additionally, I did the dreaded thing - what every adult child hopes will never happen and what many other college graduates my age (and older) have had to do at one time or another...I moved back "home" to my dad's. Unfortunately, it wasn't enough. When the creditors began calling and talking to him, the gig was up. Busted.

Surprisingly, he was pretty awesome about dragging me by my 24-year-old ear, kicking, screaming, and crying down to the Consumer Credit Counseling center as he made me sign up. He even kept his own yelling to a minimum.

I signed up. I did all the work. I relinquished my cards to my counselor. She contacted all my debtors and negotiated special terms for me. And then I sent her 70% of my net pay - a figure she and I came up with together - so that, in just over a year - I was credit card debt free.

Ahem.

It. Was. Painful. I had just enough to pay for room and board (my father generously provided both for just $300 a month), 1 tank of gas a month, and $25 a week for everything else including cigarettes, hair cuts, clothing, toiletries, and any other incidental expense.

For 14 months, I did not eat out, see friends, have a gourmet cup of coffee, buy books or CDs, go to the movies. I worked. I went home. I sent my check each month. I cried...a lot.

I chose to do it that way. It was my choice to get out of debt as fast as humanly possible. I set the dollar amount of my monthly payments. I knew it would be AW-FUL. But I also knew, at the end of the ordeal, I'd be credit card debt free and able to get out of my dad's house! Priority #1. We've all got them. That was mine.

I did great after that...for awhile. No cards, no bills other than the basics. I moved out of my dad's and in with two roommates. I got a job making a little bit better money and decided to go it alone. And then I acquired a live in boyfriend and I thought we would be together forever.

Ahem.

I got an even better job. We upsized to a bigger apartment. We bought his and hers computers. We bought him a car. We bought me a new car. We had cable television and high speed internet and cell phones. We ate out. A lot. We could afford it. We were a two-income household! Right?

Slowly but surely, the debt began to pile back on. As the relationship began to disintegrate, I began to spend recklessly attempting to, what? Buy his love back? Make us both happy? I can't answer that beyond saying the spending was most certainly psychologically driven.

When he left, I was stuck with the expensive apartment and the brand new car. I tried to manage the debt on my own, tried to budget and stick to it, but little things...silly things...arose with alarming frequency and I was forced to put even more on the cards until pretty soon I was pushing up against the ceiling. I stopped opening my mail. I stopped opening my door. I stopped answering the phone.

Eventually, I would have a practice run at a mid-life crisis, cash out my retirement, live on it for 6 months, and then decide it was better to be underpaid and passionate about my job than to be well-paid and miserable. I still hold firm to that belief. It's just not a belief that helps reduce debt.

How it did help though, is it forced me to really take a look at my finances, develop a budget, and try to stick to it so that I didn't get any further into debt. And I haven't...exactly. I did have an issue with the IRS in that, when they caught wind of the retirement cash out, they rubbed their greedy governmental hands together and slammed me with a 10% penalty in addition to regular taxes. So I adjusted my then current withholding in order to meet my payment arrangement obligations...in essence, robbing Peter to pay Peter. Just this past year, I've finally gotten that piece under control and am expecting a little tiny refund from them this year for the first time in years.

Aside from that, I was promoted twice and am no longer underpaid. I make a modestly decent living and I've managed to get by fairly well. For instance, four years ago, I was more than $25,000 in debt - including the car. I managed to pay that off and pay off one of my student loans ridding myself of more than $7,000 of the outstanding debt I had.

And I don't buy a lot of "stuff". I drive a 10-year-old car that's paid for, I rarely clothes shop unless I must, I have a library card. We don't have television channels. We don't subscribe to Netflix. Occasionally, I splurge on a new kitchen gadget. But as far as stuff goes? I just don't have much. Nearly everything in my modest, basement apartment (politely called a garden level) is secondhand and was free including my terrible excuse for a bed.


But what I do have a taste for is taking care of others. I donate a lot of my money to people who need it. I've also treated many a friend to suppers out, drinks, late night breakfast foods. I bake out of love. A lot. I (used to) entertain a lot. We've always had an open bar policy at The Grotto. I've also developed a taste for new and different dining experiences, fine wines, top shelf gin, and travel. Mostly though, my "discretionary income" has been used to cultivate and nurture my relationships.

So...somewhere along the line, I lost focus on getting out of debt. I just continued to make my $20+minimum payments on my cards and sometimes used them...when I had to. For...whatever (let's just leave it at that).

Then, in December, Lex - my partner in crime - brought up the idea again of buying a house together.

I hung my head, knowing full well no mortgage company - especially after the sub-prime mortgage crisis and today's economic climate - would come near me with a mortgage.

"I can't," I said.

"Oh surely, you can," he said.

"Um...no. I really can't," I said.

It would take weeks for me to come clean about my level of debt with someone I love and trust beyond measure. I was embarrassed...ashamed...mortified. While I knew and have known for quite some time just how much debt I was carrying, it never mattered to anyone else before now. And, frankly, talking about that kind of thing is a major taboo in America. Don't ask. Don't tell.

The conversation forced me to think about it. Seriously think about it. In the midst of #reverb10, I thought about it and, just as though the universe were speaking only to me, a writing prompt about action and accomplishment was delivered unto me and I got cranky. Really really cranky...and then realistic...and then determined.

He offered to help me. We've lived together almost 3 years and have known each other for 5. We have a fur baby together. We have long-term plans and are committed to each other. Taking his money though felt like more commitment than I could possibly stand.

However, he had a strong argument - he can be very persuasive when he wants to be - and so I was just on the verge of accepting his offer when...

His job was severely cut back cutting his pay in half.

It was then I knew for certain I had to - not just for me but for him too. We're a team and I'm not pulling my weight. He's been smart - paying off all but his student loan debt and socking away money into savings hand over fist. I, well, haven't. He has an unexpected opportunity and I won't drag him down so he can't explore it. I'm in a perfect position to work toward this goal of ridding myself of this debt while still giving him the time to explore his opportunities and his passion, and I'm not afraid of it or even uncomfortable. I'm shocked to discover that, once I told him what I owed, I could easily tell you.

It is what it is.

And I have a plan.

Only this time, the plan isn't nearly so AW-FUL or painful or tear-inducing as the last. Because I have time and pleasant surroundings and amazing, supportive people in my life to help me navigate the emotional waters of becoming debt free in the land of debt.

Watch me.

Step 1: Admitting I Have a Problem

I am a typical American Jerk.

See that picture over there? --->


That's me. Except with bigger boobs. And rhythm...sorta.

When I say I'm "typical", I don't mean I'm married/divorced with children, living in a big suburban house, and watching football or Dancing with the Stars on my flat screen television. None of those things apply to me.

However, I am a typical American Jerk because I have debt...A LOT of debt. And virtually no savings.

According to CNN Money, the average American household with at least one credit card has $10,700 in credit card debt. That number fluctuates depending on the source - I've seen quotes of $8,400 and $20,000. $10,700 seemed nicely ensconced between low and high so I picked the CNN source for my purposes.

By the same token, the same average American household has less than $3,000 in savings.

Now, while I'll admit to being "typical" for this specific purpose, I clearly abhor the thought of just being ordinary or average. So I'll tell you I have $9.98 in savings currently - well below the average $2,400. And my debt?

*deep breath*

Between credit cards and student loans (I've been out of college for almost 15 years) is:

Totally in Comic Sans - I thought it was appropriate

DO. NOT. TELL. MY. FATHER.

So that's why I'm here. To admit publically for all the virtual world to hear that I have a problem. A problem I am, luckily, in a position to resolve. And I'm going to resolve it. I've got a plan.

Watch me.