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.
Iâ€™m going to give you an honest history of my debt and how it became so out of control.
Iâ€™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 universityâ€¦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 â€œfree money,â€ something to worry about later. And damn, I did have fun with it. But no one ever sits you down to tell you, â€œListen girl, you can do your English degree and pursue whatever youâ€™re passionate in. But you should probably know youâ€™re only going to make minimum wage for many years, and youâ€™ll be trapped in a constant cycle of debt and self-doubt and scraping pennies.â€
The student loan debt is actually the only remaining debt I have. Iâ€™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 â€œcredit lifestyle.â€ The act of borrowing with the belief and hope that at some point Iâ€™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 youâ€™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 couldnâ€™t possibly afford to fork over.
BUT thank god for that â€˜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 â€˜ol Mastercard.
Then I applied for a 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! Iâ€™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 Iâ€™d get overdrawn due to an automated payment I wasnâ€™t expecting, and Iâ€™d get charged extra for the overdraft.
Youâ€™re probably thinking, â€œWhy the feck didnâ€™t you just track your expenses better?â€
And oh man, I tried. But itâ€™s easy to forget that credit is money, especially when you donâ€™t really EARN it. And I watched my bank account be sucked dry every month just thinking hey, thatâ€™s life.
It isnâ€™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 Iâ€™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 thereâ€™s the possibility Iâ€™ll make all the same mistakes again. But nowadays I work so fecking hard for my money, watching it slip away is heartbreaking.
So hereâ€™s to spending more wisely and saving more carefully. Cheers to a debt-free life!