Monday, October 18, 2010

$

It was several months after I'd received this job - after the new house and car, after putting in the fence and beginning to travel - that I realized my link was missing from the sidebar of a favored blog. I frowned, wondering what I'd said to offend, and realized that it was the incessant - and perhaps insensitive - discussion of how happy I was to be making money.

The confession I was less eager to make was that I've been in some form of credit card debt since I was 16. Though I started working as soon as I was legally allowed, I immediately started spending beyond what I earned. And continued to do so well into adulthood.

I've paid thousands of dollars - perhaps tens of thousands, actually - in exorbitantly high interest. I've dutifully paid my bills every month though, save the instance in grad school where I was stressed and tired and put mail in the refrigerator with the groceries in my studio apartment. So my credit rating remains quite good - though my debt to income ratio was, at times, pretty depressing.

And it's not as though I have particularly expensive tastes. I don't gamble or have a drug habit. I drink modestly at best and most weeks not at all. I have rather middle-class tastes in food and cars. I have books - frequenting a library would have changed my financial situation dramatically. I also have 3 closets worth of clothes and shoes, though little of it is designer and I could eagerly show you the pants I found for $4 at Kohl's or the little flats I picked up at Target.

But I've always known I either needed to spend much less or earn much more. So when my salary doubled from grad school to post-doc and then doubled again from post-doc to Industry, I decided my time worrying about money was limited. I had more than enough to fund my current lifestyle and pay for past purchases I couldn't quite recall but which I'm sure were important at the time.

I signed documents to refinance my house last week, dragging myself across town in a jet-lagged haze and initialing and signing the papers put in front of me. I blinked at the woman across the table when she asked if I had questions, yawned while I shook my head. I nodded when she reminded me not to make my November payment and smiled when she said she'd send me a check for $400 - the amount I'd deposited to fund said refinancing was being repaid.

"It'll be like finding money," she said cheerfully before advising me to drive very carefully, "since I don't think you'll even remember meeting me!"

"I'm not that tired," I replied slowly and waved as I pulled into traffic behind her, coming home and falling into bed for a late afternoon/early evening nap.

Wide awake at midnight, I decided to cancel my automatic mortgage payment while I was thinking of it. I glanced at my last credit card with a balance - a Bank of America account - and checked to see what I owed. I smiled when I realized it's $1000 less than I pay for mortgage each month and tapped $1400 into the box and asked my bank to send a check. And, as of today, I no longer have outstanding credit card balances. For the first time in half my life.

"I have been," I told Mom when she said I could start saving for retirement. I have Industry take it from my check before money appears in my account.

"Oh, I do already," I replied when she said I could give to charity. That also comes from each paycheck for some organizations and auto-pays for others.

"One year," I answered when she asked how much longer I have to pay on the Jeep. "But that's a 0% interest loan," I reminded her, "so there's no benefit to paying it off early."

"I'll start saving," I decided, for I do not do that. If I were to lose my job, my life would tumble like a house of cards for there is no cushion. I think I have less than $100 in my meager savings account, and I watch my balance around payday since the various bills - mortgage and car, credit accounts, power (I pay extra to enroll in the renewable energy program and my house is 3 floors so it's a bit pricey) and entertainment (TV, internet and, as ever, books. Oh, and eating out - I do like socializing over food).

I remember being in high school and staying up at night, worrying over when I'd ever find the money to erase the debt. I did that in undergrad and grad school and throughout my post-doc as well. "Eventually," I'd tell myself, "I'll make enough to have some leftover - and I'll use it to end this cycle." And, unlike the prediction that I would find someone to love me, I was right about the money thing.

And you'll have to forgive me or unsubscribe if you're irritated with me for discussing it. It's a big moment and I hope it gives you confidence that if you're struggling now, circumstances may very well shift soon. And it's lovely to drift off thinking of charitable donations or savings accounts for the Ones or looking for sectionals for my living room or upgrading to business class on my next international flight. But I am applying a belated, yet strict, 'no buying what you cannot afford' policy. For throwing more money at interest charges - apart from my mortgage, of course - does not appeal.

7 comments:

Anonymous said...

Congratulations!!! This is a HUGE deal!!! Yay!!!

-soon-to-be

sciencegeeka said...

I'm kind of in the same boat. I wasn't a spender, but through some bad decisions, I racked up the debt too. I didn't quite put the bills in the fridge, I shredded them immediately.
I can't wait to get to this point, and it's close.

This is a major accomplishment. Years from now, when the economy has rebounded, you can say that you did this in a horrible economic time.
This is something to be proud of.

Brigindo said...

Good for you for doing it and for writing about it. I think we don't talk enough about budgeting and paying off debt and owning up to our debt. I'm a little over a year away from being debt-free.

Unwritten said...

I've just started my undergraduate (those hours of moaning on my previous blog paid off! - I'm at a university in Cambridge) and have been plunged into the idea of of serious debt. I didn't have an extravagant upbringing, I had a job at 16, however, the thought it a pretty scary one.
I hope to follow your example when I finish my doctorate - many years of yet!
As always Katie, I've missed you!

microbiologist xx said...

Congratulations on paying off your debt!! This is a huge deal and totally worth writing about.

Amelie said...

Congrats! And thanks for sharing. Money still seems to be a taboo topic, and it would be so important to learn before making all those mistakes.

eMelectric said...

I am still quite a way off being debt-free and although I don't have extravagant tastes, I have always spent above my means. You've encouraged me that things will get better eventually! I think I might be there in about a year and I can't wait. Good for you for getting to where you are. I think when you've been in less comfortable situations you can really appreciate it when things are good.

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