I was dumb. I finally graduated college, got a real job and thought I could afford to live it up. I had made a magical new friend called the credit card, and I used it without much thought of the repercussions. Now I am paying the price for it. It really started off pretty innocently, my job requires a lot of travel and out of town work, we are expected to get our own credit cards and then submit the receipts after the trip to get our money back.
This wasn't that bad of a deal, I collected a lot of airline miles and cash rewards in the 2 years I've been working. So I started wanting to collect more and more rewards and miles, I started using my credit card to buy groceries and whenever I went out to dinner, just to get that little extra bit back. But I wasn't very good about paying off my card every month and the debt kept getting bigger and bigger. Through neglect and carelessness I went from having no debt to worry about outside of my student loans to having $10,000 of credit card debt and really nothing to show for it.
I realized about 2-3 months ago I that I really needed to fix my financial life. I've been reading different blogs that deal with the subject, starting with the Consumerist which then directed me to the Get Rich Slowly blog and have been learning a lot. I took the advice offered on these sites and took a notebook with me for a bit to document my spending and figure out how much I was spending and where I could cut it back and really start to reverse the trouble I had gotten myself into.
So much of my spending was on such trivial and stupid things. I was buying lunch everyday, that cost me almost $1500 a year. Now I pack my lunch every day and am using that money to pay off my debt.
Another vice of mine was buying books. I've always been a bit of a nerd and I loved going to Borders or Barnes and Noble to pick up the latest books. But when I looked back on this habit, I found I was spending $100 - $200 a month on books. And once I actually saw how much I was spending, I resolved to switch to the library as quickly as I could. The worst part was that there was a library less than a mile from my office and less than a mile from my house. Again, that money is now going towards paying off my debt.
I'm not out of debt yet, but I am moving in the right direction. I've cut a lot of my extra expenses and I found that my quality of life has not really changed. When I can finally pay off my debt (~26 more months) I want to take the money I was used to not having and switch it straight into different investments. I've automated most of my payments now to make things as seamless as possible. I am hoping that I will have the will power to stick with my plan when I am finally debt free. I'm not there yet, but I am certainly moving in the right direction, and hopefully that will continue.
Have you paid off your debt? Managed to save for your dream home? Had an awesome investment pan out? Share your personal finance success stories here.
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