This week’s guest contributor is the lovely Australian, Francesca who writes the blog Tasmanian Minimalist. Below she shares her experience on how she acquired $50k in debt in part to a series of emotionally impulsive online buying decisions. She talks about how she is actively climbing out of her debt and she shares some positive and practical solutions.
Please help me welcome her!
How special do I feel?
A credit card company sent me an offer. They tell me that they have increased my credit limit from $16,000 to $21,500 – yes please! I deserve it. I work hard, I earn good money, and paying it off would be a breeze! I need some new clothes, especially some winter boots, jewellery, oh and make-up, I really want some of that mineral makeup.
I am part of a club, the “I can afford to buy as much as I want club”. And shop I do!
When this “offer” came to me one day, early last year, my credit card balance stood at $10,000. It hadn’t been paid off in full for the last seven years, but for some reason, I still don’t know why, I thought it would be sensible to increase my limit.
I thought “just in case because you never know”.
An incident in my personal life (I won’t bother you with the details) threw me for a loop. My life was spiralling out of control more than ever before. I logged on to Ebay and for the next six months and literally never logged off. I bought and bought and bought.
Did I want the items? No, not really! Did they all fit me and make me feel a million bucks…no, not in the slightest. Did I buy certain items, open them and immediately put them in the charity shop bag- YES. I. DID.
That is when it hit me. I was buying items and immediately throwing them out!
Then I hit my credit limit.
And just to add to the general note of gaiety along came some Sexually Transmitted Debt (STD). My ex-husband had reneged on a car loan and by default, through marriage, I was now responsible for that debt which was over $20,000.
Oh my god. I realized I now had: $21,500 in credit card debt, $20,000 from the car loan debt from my ex and oh, I forgot to mention the $2,000 on my other credit card. And, did I have any savings from working for the last 20 years? Nope, don’t be silly.
On the cusp of my 40th year I was nearly $50,000 in debt with no savings and only a wardrobe full of rags. What the hell was I going to do?
The internet started me off. I spent a lot of hours simply reading other people’s financial blogs. They served many purposes, the best of which was to show me I wasn’t in my financial disaster alone. It never really occurred to me that other people out there could feel my pain, that they too would lie awake at night worrying and wondering if they could bounce back from the dark, heart-ripping and self-inflicted place.
Changes, BIG changes occurred:
● I began working very casually for a friend who owns a restaurant. And whilst this is small change in the wage area, it was a big help because it allowed me to pay extra credit card payments each month.
● I opened an account where I could put a certain amount aside each month to have the money set aside for my bills.
● I began a blog. This alone has made me think harder and I have become more accountable for my actions.
● I read and read and read others blogs to see how they turned their lives around.
● I started having a certain amount deducted from my pay each fortnight and placed into an untouchable savings account.
● I stopped buying.
But, the best thing that I did was I faced my fear of the bank and called them to explain the STD acquired from my ex. This has enabled the amount to be broken down to smaller payments, so I didn’t have to fork over huge amounts of money for something that wasn’t mine.
Both credit cards have long since been destroyed. My self-esteem has finally begun the upward climb and I have slowly but surely started getting rid of all the superfluous items in my life. I no longer buy anything willy-nilly and each purchase is a considered acquisition. So I don’t end up buying much beyond my essential needs.
My credit card debt is down by about $3,000 and whilst this is a small drop, the point is it is a drop and I am adding to the release of my credit card disaster each week.
I am not consumed with buying any more and I am also thinking of other things to do. I will soon be teaching vegan cooking classes to adults at a local community college. There are plans for other courses I might run too, and my latest little pipeline dream (which is just a speck in the distance right now) is “How to get your life back on track when credit card debt threatens to smother you”.
From little things big things grow!
Tasmanian Minimalist •THANK YOU• for being a part of And Then We Saved!
P.S. Ready to get out of debt ASAP? Check out the Spending Fast Bootcamp! SpendingFastBootcamp.com
Great job on getting your financials back on track – its a great feeling. One thing you mentioned was an untouchable savings account. Can you give me some examples? I have my 401K but other than that I am terrible at saving and then dipping into it when I do finally have some cash saved. I need an untouchable savings account! Thanks for your help.
I guess the 401 k is like the Superannuation we have over here. I have had that for 20 years. But the untouchable account is one with my local bank with whom I have an account that penalises you if you withdraw your money during certain times. You also have to go into the bank and fill out paperwork so you can't just take it out easily. It's not totally fool-proof but it certainly stops you from taking money out without much thought. :)
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I enjoyed your blog. It’s easy to read, the content is good, and you’re an educated writer unlike most of the blogs I come across when searching on this topic.