A few months ago, I had my wallet stolen.
I bet most of you can relate to the whole, "omg my wallet/phone/keys are missing!" panic, particularly if some adult beverages have been enjoyed beforehand. At first, I laughed it off, figuring that I had probably just misplaced it in my coat pocket. I crawled under the table. I fished through the ripped satin lining of my jacket (because a wristlet jam-packed with receipts and cash could TOTALLY wind up in there without you feeling it. Totally.). It was nowhere to be found. And so, as I cried my way home on the T, at 10pm on a Friday night, I called my credit card company and cancelled my card. Through my tears, I alerted the bank that my debit card had potentially been stolen, had them set up an alert on the account and went to bed. I woke up Saturday morning to a thwarted $135 charge at a Walgreens and $5 in Redbox movie rentals in Brockton. One visit to the bank, countless phone calls and a fun-filled police report filing later, and I had a fabulous day on my hands.
Toss in the fact that this sweet Christmas present came a mere five weeks before Christmas, for which I proudly consider myself Queen of the "I Buy The Week Before" camp, and it's amazing that I have any pigment left in my hair at all.
In all, I ended up losing about $320 in cash, a glorious November Saturday and probably some years off my life. I also lost $250 in gift cards, my driver's license, assorted mementos and a Dooney and Bourke wristlet. (And before anyone asks, no I do not make it a habit to carry that much cash. I had just gotten Andrew's half of the rent money and stopped in for a quick drink on my way to deposit it. One drink turned into three and, well, you know how it ends).
As bad as it was, it was more of a nuisance than a catastrophic event. Three and a half years ago, I can confidently say that it would have been an entirely different story; sobbing, shaking puddle of stress would not have even begun to cover it.
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Quick back story: contrary to the whole "sorority thing," my family is not particularly well-off. In fact, I grew up solidly lower-middle-class with four younger siblings and divorced parents both trying to make ends meet. We all shared rooms, went to public school and our lawn was usually littered with bikes and other unsightly childhood paraphernalia. I believe the term "latch-key kids" applies. We weren't poor, but we certainly weren't rich or, a few times, even financially comfortable. Despite our constant, and often loud, protestations that we "had no clothes/shoes/cool toys!", though, we always had what we needed, even if it wasn't exactly what we wanted. For this, I am thankful.
I started baby-sitting for local neighbors at 11, making a whopping $3.50/hr for up to three kids plus an extra .50 for each additional child. At 16, I got my first "real" job, working at a well-known national department store making $7. When I left four years later, I was a high-roller making $8.50. I had a work-study all four years of college, learning the basics of computer tech support and cashing out $10/hr paychecks every other Friday. I crashed my first car a scant six months after getting it, and my money went from buying gas to paying other bills.
I have never had a cell phone, credit card, tuition bill or loan account co-signed or paid for by my parents; it was tough love but I can't thank my stepmother enough for forcing me to become financially independent from the very beginning of my adult life. It taught me a lot and the lessons I now see my peers learning are ones that I mastered long ago. If you can't afford it; don't buy it. Always pay on time, more than the minimum and pay extra, designating it "principle only" if you can. Ignoring calls from creditors won't make them go away; it will make them call a credit agency who will then call your job (which is illegal; tell them to stop and threaten legal action). Know your rights; know your options. Interest rates are grossly unfair and no amount of federal legislation has been able to do anything about it. Consolidation isn't always the way to go. You should do due diligence on every, and I do mean every, available option before agreeing to a settlement plan and/or declaring bankruptcy.
How do I know? Because after carrying a near-perfect credit rating all the way through college, I made a series of poor decisions, wracking up credit card debt and nearly defaulting on my student loans while tanking my credit, draining my savings and inflating my APR in the process. I was stressed out, visibly agitated and terrified out of my mind. I physically jumped every time my phone rang and most days I wouldn't even check the mail because I knew a new stack of red-rimmed envelopes would appear. I had nightmares about Harry Potter-style howlers streaming through every window and door of my tiny apartment, screaming, "YOU OWE ME" as I suffocated under their enormous crimson weight. This went on for months -- yes, months -- before I overcame my shame and worked up the courage to tell some very close friends and family about what was going on. As expected, I got an earful -- but I also got some very sound advice and the push I needed to pick up the phone and make that first phone call.
It was a random Tuesday night and I was home alone on my couch with a stack of loan bills, a legal pad, a calculator, a paystub and my bank statement. As I picked up my cell phone, my fingers were shaking so badly that I misdialed three separate times before finally punching in the correct sequence of numbers. I opted to call my loan company directly, rather than the credit agency, to discuss my options, and as the automated voice informed me my call was being monitored for quality assurance, I very nearly hung up. And then a deep, older voice, nothing like the insistent, barking commands of the collections man, drawled a, "hello, Mizz Cay-tee, and what can Ah dew for yew to-day?". A full hour later, I hung up the phone with a full three pages of notes and numbers, an ally in a southern transplant named Tom, and, for the first time since I graduated from college, a sense of hope.
I burst into tears.
What followed was neither a fun nor particularly endearing time for my friends, family and social suitors. It was even worse for me, watching my pals cavort on tropical vacations and hit the coolest clubs in the latest fashions while I calculated interest rates and prospective pay-off dates. I adapted my champagne tastes for a Bud Light budget, abandoning my bar buddies during the week, learning to shop the sale aisles and eating a metric ton of cereal and stir-fry. I changed my tax status so I got a smaller refund but got to keep more money each pay period. I got a raise shortly after that phone call but my bank account never knew it; every last spare dollar went towards back-paying my loans and obliterating my credit card balance. To make things even more difficult, I started dating Andrew halfway through that period, and I moved out of the apartment I shared with two roommates and into my own 280 sq. ft. studio a year into my quest. None of it mattered; for every curve ball hurled my way, I adjusted the budget and moved on, throwing every raise, every refund, every random red cent towards that balance. It almost became a high, watching such a big number diminish, first slowly, ever so slowly, but gradually falling faster and faster with each payment. At one point, I was finding new costs to cut so often that my credit card company informed me that I had to wait 3 business days between transactions. I became addicted to the feeling of progress, and when my boss told me I was being promoted, I knew that first check was finally going to hit paydirt.
Fifteen long, agonizing full moons after that first phone call, I was out of bad debt.
Obviously, the story doesn't end there. The funny thing about money is that it's an integral part of society, and there's really no escaping it. Clearing my bad debt was, to me, only the first step towards financial responsibility. Sure, I found myself with a bit more disposable income and I no longer had to live off of pasta and beans, but I also still had student loan bills and no savings of which to speak. And so, after a year of improving my credit by paying every bill on time and getting acclimated to my new debt-free life, I took 2011 as an opportunity to build my savings, invest in my retirement and pay down one of those student loans. And, as you all know,
it worked.
So, that's my story. It's not much different than any other "bad debt" story, but it's true and I'm proud of it. I realize that some people have it much worse than I did, people who have lost their jobs, their homes, their belongings, their families and their pride. I know that I was one of the lucky ones, who got myself into what I now refer to as "stupid debt" and nothing more serious. Through it all, I had a steady income and no dependents, which enabled me to live comfortably enough while paying debt down. That's much more than some people can say. I don't, however, think that this detracts from the value of my experience, because there are plenty of others out there who, despite not hitting rock bottom (yet), are teetering on the precipice of a full-blown debt avalanche. Those people are scared. Some of them feel helpless. Some of them might be reading this right now.
And if that's the case, I hope that they take these words to heart: You don't have to wake up every morning filled with dread. You don't have to jump every time the phone rings or the mail slot slams shut. You can do this -- you really can. It isn't easy; it isn't fun. It's a huge commitment and at times, it really, really sucks. But it's doable. Do the research; make the phone calls; make a plan and stick with it. And when it's all done, relish the fact that you learned and you made it!
