Wednesday, December 16, 2009

Hard for the Money

Recently I achieved something significant that I would like to share here. I paid off my credit card. OK… it wasn’t I so much as we, but it’s significant all the same.

I’ve never been out of control with credit cards. I take that back. I realized fairly quickly that I had the potential to be out of control with credit cards, and I stopped using them. However, sometimes life intervenes and you find yourself with a 0% interest rate credit card and the need to buy a mattress, a couch, and a dining room table. In other words, you (and by "you," I mean "I") moved out of the condo you shared with your (ex-) boyfriend with very few possessions, and at 27 years old, you felt like you deserved to own furniture that wasn’t found in a Chicago alleyway .

Were there other options (Craigslist, Ikea, Salvation Army)? Of course there were, but at the time I felt like I deserved a couple of decent pieces of furniture after the “ordeal” I had been through, not to mention that moving always sets you back a little bit between security deposits, U-Hauls, random new stuff that you didn't realize you would need like a trash can in the bathroom or a rack for drying dishes... you get my drift. Somehow, I managed to move my credit card balance from one 0% interest rate card to another, and then another, which seemed like a great deal, but on the flip side, enabled me to not pay off the card.

Eventually, I decided enough was enough. I kept the balance on a fairly low-interest rate card, and set out to pay it off. It took me two years of paying a minimum of $300 a month, plus a few larger chunk payments here and there when I could afford it. Finally, after I wrote dozens of thank you notes expressing our gratitude for cash that would be put toward our “new home fund,” MM and I decided that part of our wedding money would be best used to pay off the remaining, fairly small, and definitely manageable balance. I doubt that would have sounded appropriate in a thank you note though.
"Dear Aunt So-and-So: Thank you so much for the check. We will be using to pay for an item Lou bought three years ago. We so appreciate you thinking of us on our special day. Love n' Stuff, Lou and MM."
Why am I telling you this? I don’t know. Because I like sharing, I suppose, and as sucky as it is to suddenly find yourself with a decent amount of credit card debt, it’s something a lot of people deal with (most people?), and second, I feel ready to buck the societal taboo that has kept me from openly discussing money matters with friends. I’m not suggesting that we should all walk around with our salaries glued to our foreheads (though there are arguments for that), but discussing strategies on how to save or how to budget or how to get out of debt or what some of these financial products actually are can be enlightening.

Not talking about money only helps fuel the confusion that allows some financial institutions to go nuts with our cash, and pretending like debt doesn't exist, usually only makes things worse. As I get older, decisions like “buying a house” and “starting a family” are much more defined short-term life goals versus some vague thing that may happen someday who-knows-when. Ignoring financial matters at this point is not an option nor is simply treating money as "this is my salary; this is what I can spend," so why not talk about it?

MM and I have promised to spend part of our winter vacation putting together a budget that will allow us to beef up our savings significantly as we look toward the suburbs (yikes!) and home ownership in the next few years. This is probably something we should have already done, but we’re going to take the downtime we have and use it wisely. Combining assets can be a tricky thing and it demands time and energy and some hard conversations about financial and life goals. In some ways, I'm actually excited about this because I feel it has the potential to be an empowering process.


Kendra said...

Not having credit card debt is an awesome feeling - congratulations!

@ said...

I'm sorry, did you say suburbs?