Debt, and How Dirty It Is.

[Gulrok]

I figure I haven't been very active on these forums recently.. but I goofed up awhile ago. For starters, I'm 21 .. so not very old.

When I turned 18, I was the person who applied for a credit card, and started using it wildly. Paid off the balances here and there but always had a high balance on revolving credit. I made decent money out of high school and for the most part was able to buy what I wanted to. Always made payments and always had a job to support my bad habits.

2014 I moved to the West Coast to take care of my Grandmother, 2015 I moved back to the East Coast after she was settled with proper care.

2015 On the East Coast I was fixing cars "under the table" and didn't really hold a job for almost a year. Tax free automotive work was great when I was charging people $50 an hour, under cutting the automotive shops and still making very good money.

2016 Basically did automotive work for over a year. Sold my older Jeep Wrangler ( biggest mistake I could have ever done ) and bought a POS Jeep Truck for cheap. Decided it was time to get a real job. I had been a volunteer EMT for years.. so I became a paid one.

POS truck wouldn't survive the daily trips to work. Always had issues and didn't know how it would fair in the winter. So I bought a Jeep Wrangler again.. but a newer one for $9500.

I owed around $2500 or so to credit cards.

2017 Became full time instead of per diem. Decided I could afford a new macbook pro, and added $2500 to my debt. Sold the Jeep Truck for a profit, and took the money and bought the Vmax. It needed work, so I basically put everything I did on it on credit. Added a lot of money. Money was tight, so Wawa gas card for food for work + gas. Debt consolidated with a credit card company once... then basically loaded up more credit cards with more debt.

Had an opportunity to buy a 1996 Dodge Dakota in pristine condition, one owner truck, 100k miles, etc etc etc.. ( best car buy I've ever done ) for $1200. The owner was injured and unable to walk anymore. Turned out he was a patient of mine, and we became good friends. Still friends now... however I took out a cash advance for $600 of cash because money was so tight.

After that I had almost nothing left after each month. Finally I took a look on how much I owed... my heart sunk.

I had racked up over $20,000 in debt. Between a car payment, credit cards, and everything. I had a 98% credit usage between all my credit accounts. For some $20,000 is a car.. but still. $20,000 in debt as a 21 year old isn't any small amount. ( EMTs aren't paid too much in NJ. )

So right around July/August I decided I was being stupid. Decided I didn't want to be like my parents who always lived paycheck to paycheck. I started selling crap that I accrued. Engines for project cars, tools, etc.

From that $20,000 - $11,000+ or so of which were credit cards.. I've paid off almost $7500 so far. I skipped a semester of college to work on everything, Its only November! I picked up another job, and for awhile I was working 2 full time jobs. Money was great, but I was burning myself out of the 911 field, so I toned it back quite a bit.

I have about $8000 left on the Wrangler, which I'm trying to sell at this point. Then about $4500 left on credit cards. I'm predicting about February/March I'll be credit card debt free.. then if I can sell the Jeep I will. If I can't then I'll continue to pay on it, and try to pay it off immediately.

I've had a few expenses that has slowed down my goals... but for the most part I feel like I can stop paying the stupid tax. Debt is so dirty. My interest rate on the Jeep is somewhere around 13.5%... meaning at the end of the year I'll have paid $1,000 in interest alone to drive a freaking car. I can't imagine how much stupid interest I've paid over the last 3 years or so already on credit cards. Too much!!

I don't want to be in debt my whole life. I want to finish my degree and be able to prosper and enjoy the money I make. I wanted to share my thoughts and how I've been doing on my track to being debt free. I know I'm not alone in making stupid mistakes. I know theres are many other people in my generation who are in the same boat as I am. I know I still have a lot left to do.

I've come to these conclusions though.

1. It doesn't matter what car I drive, I can find something reliable for $1,200.
2. If I can't buy it in cash I shouldn't be buying it.
2.5 Theres one exception to using a credit card. If I'm going to buy something on Amazon that I need ( Ex. Just bought tires because the truck tires were bald. ) I can get 5% cash back... then pay immediately!
3. Girlfriends are expensive.
4. I'm less willing to buy stuff when I use cash. I really debate if I need it or not.
5. Websites like Swappa are great for newly used electronics.
6. Everything you buy depreciates when its used.
7. Failure to plan is planning to fail.
8. Budgets let you alter your spending habits constructively. You actually see where you spend money.
9. Eating out every day at work is expensive.
10. My food budget is still way out of control. Need to figure out how to meal prep.

--

.. and some additional advice ... cut up or lock away your credit cards. You can live without them.

I use what I call a "burn card". Its a debit card that I transfer about $200 a time on to. It won't allow you to overdraft. It texts me every purchase made... and it is a completely separate bank account from which my direct deposit and bills come out of. This way I can carry one debit card, and if it gets swiped or duplicated they may only steal a maximum of $200 or so. And.. guess what? It worked perfectly as planned. Exactly that happened. I had my debit card duplicated from somewhere and it was used. They stole all $50 that was on the card. A dispute with my bank and about 2 weeks later I had my $50 returned. All I did was in the mean time go down to the bank and get a new card printed. I was back in business.

Thanks again for reading. Let me know what other advice you guys have, and please share any stories you have as well.

 

[D-Max2012]

Good write-up.. I'm 51 and I learned this same lesson back when I was 21 or so, also.
Just had a little discussion with a cashier, and a customer at Wall-Mart yesterday.

The cashier asked if I'd like to apply for a Wall-Mart credit card (which they are told to do). I told her that I learned my lesson years ago with credit cards.
Note: the cashier was around 20-25 years old and finally admitted that she had problems with CC's also. So she knew what I was talking about.

The woman behind me chimed in, and said the same thing. She was about 35 years old.

If easy purchasing don't get you in trouble,, interest payments will.
:eusa_dance: If you've learned this at 21, you're on the right track.:eusa_dance:

 

[The Beekeeper]

Good job!!..........Looks like you have learned your lesson well and are on the right track!!............Those shifty credit card companys love to see everyone carrying big debt and making interest payments every month!!.........Credit cards are a good thing if used responsibly, we use ours for basic needs, groceries, fuel, etc, but we pay it off every month, no exceptions!!.............It can be done!..........Tom.

 

[93max]

Keep up the good work!

 

[sdt354]

I'm glad you're back on track. There's lot's of life left yet to live. We, don't buy stuff that
we can't afford. Vehicles aren't new but paid for. The worst financial mistakes are buying at high interest rates. Figure the total cost including interest and you're paying too much. The little car lots are the worst. Mechanics have the luxury of keeping a cheap car or truck running for low cost. Going out to eat is almost a weeks worth of groceries. So that we limit. When I purchase almost anything, I ask myself what can I sell it for if I need to. Girlfriends need to anti-up once in a while. My wife has always offered, since we met. If your on dating sites. Meet for coffee first. Dating sites are full of "dinner whores" They like like going out a few times a week on someone else's dime. And it is expensive for the payee. I have that old tee shirt.
Steve-o

 

[tothemax93]

A great lesson to learn at your age. You also have a good work ethic that will help you to get out of debt in good time. So many people live there whole lives in crushing debt. Your whole life your told you can have the biggest, nicest, best, for a low payment. Being satisfied, and self disipline is in short supply these days.

 

[SpecOps13]

At 29. My first Wife did a number on me. Every card that she was offered she got. After 11 years she took All the money, some of which she had Squirreled away in 7 savings accounts. She took everything she wanted in our house that she wanted and went on the hunt for a Dr. or Lawyer to marry. She ended up with an ******* out of work truck driver BTW. I had to work 3 jobs to stay afloat and pay the mortgage. Finally got my Stuff in order and cut all the Credit Cards up...

Second marriage has worked for 35 years.. My Money, Her Money, Our Money.... We have gotten to a point that we owe $0 Dollars for the past 20 years. We pay cash for everything including Cars.... We actually fight over who wants to pay for anything....

We pay off the few credit cards we have every month and collect the points to exchange for cash back into the accounts....

 

[Zeus36]

Great write up and thanks for sharing!

I had gotten into card debt in the early 90's with multiple cards. Purchased my second Harley with a super low fixed interest credit card instead of financing so I had a clear title. Can't remember why I did it that way....
Figured how to target the credit card with the highest APR by focusing max payments while paying the minimum payments on the other four cards. Once the highest APR card was paid off, I moved to the next and so on. Since you are eliminating those cards in series, the payments increased sequentially on the remaining cards. As each card was cleared, I closed the account and cut up the card.

I deployed to Scotland for two months as a military contractor and requested a pre-travel cash advance of $10K. I used it to clear all remaining debt. Talk about taking a load off your mind!

When we bought the house, I had a better credit score than my gal!

There is just one Visa card from my credit union for gas pumps, but I mostly pay for food and groceries with cash, especially after the Target Stores and Home Depot credit breach. Online shopping is via PayPal and that comes out of my checking. I won't buy a new car or motorcycle and still drive my sports cars from the 90's.


I do tell the folks offering the credit card incentives at the stores that I've been down that road, but since I've gotten rid of credit cards and am now debt free, I find I have tons of cash and don't NEED the cards.

 

[Gulrok]

Well... if I sell a few things I'll clean up whats left and have some extra spending money.

Camera:

https://www.ebay.com/itm/292335100793?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1558.l2649

Laptop:

https://swappa.com/listing/view/LQMI62261

Jeep Wrangler:

https://southjersey.craigslist.org/cto/d/2003-jeep-wrangler-sport-4x4/6383488297.html