Mid-March 2013 Debt Balance Update

credit card

In January my credit card debt was maxed out at an all-time high of $30,340 on one card. How can someone still in school (grad school) with no assets or collateral be given a limit of over $30,000? That’s a good question. Someone should call Citibank and ask them.

As of March 16, my current credit card debt now stands at $24,998.  I’ve been throwing all the money I make from selling my stuff at the balance as well. Now that I now longer have to subsidize the rent on my old apartment, I should be able to really throw everything at this debt. It feels as though the debt is being reduced so slowly. With a balance this high and a 19.99 interest rate* I’m paying over $500 per month in interest alone. As I get more principal paid down, my interest paid will be lower each month as well. More and more money will go to principal and my debt snowball will be at full speed.

*I’ve never been late or missed a payment in all these years. My rate is so high because just before the Obama Administration passed the Credit CARD Act, banking institutions everywhere jacked up interest rates preemptively.  Those of us with high balances who could not pay them off or move them elsewhere were stuck with these inflated rates. Not that missing a payment means much to me now. I’m done being a good little profit center, making minimum payments and making rich people richer.

I got my annual reminder that my Amazon Prime account was going to automatically renew. The old me would have approved it, but the ‘Get Out of Debt’ me quickly blocked it. I used to buy something from Amazon once or twice a week, but this year I’ve only bought a few things that I needed like ink and paper for my printer.

My second job starts next week. I’ll keep you updated and let you know how it goes.

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

Still Dealing with Bad Past Financial Decisions

regret - the shopping sherpa

The Final Kicker

Yes, I am renting a room in a house now. However, my apartment is still not completely out of the picture. You see, last year when I foolishly renewed my lease in that complex, I did not get a standard 12 month lease. I got a 14 month lease.  So instead of my lease being up in January, it is up now in March. That’s right. For the past two months, I’ve had a sub-letter living here. They paid $300 less than the actual rent price because no one else in town was so financially stupid as to  pay the overpriced rent to live here.

Yes, here. I am now here in my old, now empty apartment after 2 weeks of selling most of what I own after the subletter moved out.

The experience has been bittersweet. Although I’m glad to be disconnecting from this place and launching headfirst into debt freedom, it is sad seeing everything that I spent so much time carefully searching for and selecting over the past two years, sold for pennies on the dollar or given away. And even though I’ve met a lot of lovely people through Craigslist in the last couple of weeks, its a bit of a kick in the teeth to see another round of people benefiting from my financial ignorance. Never again will I let this happen to me. Another lesson learned the hard way. I have resolved that I’m not going to buy another piece of furniture until I am out of debt.

So what? What’s the big deal, you ask. It’s all just stuff, you say. And you are right. But over the past 10 years that it took me to rack up $30,000 of credit card debt, part of that debt came from moving frequently throughout grad school. I have now realized that I have a pattern. I move every couple of years for various reasons – some within my control, some out of my control, but each time it required buying or selling furniture. Like the time I moved into an apartment that turned out to be unbelievably bug infested. I moved out soon after and left my furniture there. Or like the time I had to move away for a year to do research. I didn’t want to sublet the apartment I was in at the time to strangers (heard the horror stories) and couldn’t afford to put everything in storage for a year so my landlord let me keep everything in her basement. When I came back, surprise, surprise everything was covered in mold.  The furniture thing is just one spoke in the wheel of bad past financial decisions, but it’s times like what I’m experiencing now that make those past financial patterns salient.

Sofa with dollars isolated on white background

It’s not that I miss the furniture that I sold/gave away. It’s that I can’t help but see all the money and time wasted in every thing or every box of things that someone carried out of my apartment. I’m done with stuff for the foreseeable future.

The rickety bed and other salvage furniture that I have in the room that I rent now are provided by the owner of the home. I plan to stick to furnished rooms while I’m paying off my debt. If I can’t find one, I have a small inflatable mattress that I will sleep on. In fact, I’m sitting on it right now in this nearly empty apartment.

I’ll be handing over the keys in a few days after two years of living here. I’m ready to chart a new course in my life. Now I have a map. First stop, debt freedom. Final destination, financial independence. No more detours.

Photo credit: Regret – the shopping sherpa @ flickr

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)