Free as a bird, financially speaking

Four and half years ago, I was $33,000 in debt.

Worse, I had nothing to show for that money spent. I don't own a home or a car. It hadn't gone toward an Ivy League education.

No, I acquired the debt over twenty years of living carelessly -- not extravagantly, but inattentively -- in New York City, a very expensive town. I had several credit cards, and I used them blithely to buy the small things that make me happy -- a CD here, a sushi dinner there, the occasional evening spent in the swaying embrace of a taxi dancer (sigh... if only).

I don't have expensive tastes, and I rarely indulged in anything very pricey. But by rotating between my several cards and making only minimum monthly payments, I slowly but surely erected what I think you will certainly agree was an impressive if teetering tower of debt.

In my defense, let me assure you that I always paid my bills on time. It's not as though I was receiving threatening calls from bill collectors. It's just that I limited myself to minimum payments and -- here's the embarrassing part -- I rarely, if ever, looked at the bills I was paying. So while I knew I'd dug a nice hole for myself, I had no real idea just how deep it was.

Finally, one day about five years ago, I awoke as if from a fever dream and decided to confront my situation. I gathered together my various and sundry credit card bills, cranked up my coal-powered calculator, and did the arithmetic.

The sum total was more than twice what I somehow expected it to be, and I immediately knew that serious action must be undertaken. I considered bankruptcy, but somehow couldn't bring myself to go that route (mind you, I don't intend that as a judgment of anyone who does travel down that road). So mortified was I at having let my situation get out of hand to that degree that I felt, somehow, that I deserved to suffer punishment. I just couldn't let myself off the hook that easily (again, I speak here only of my own particular circumstances), and that wasn't even taking into account the impact a bankruptcy filing would have on my credit rating and future financial status.

Instead, I responded to a mailed offer of a debt consolidation loan through a bank. The interest was under ten percent, and I felt that this would be a better move than one of those debt consolidation services for a couple of reasons: first, because some of the money was owed to my father, and the debt consolidation services couldn't add him to my list of debtors -- only commercial creditors are involved in the services these organizations offer -- and second, I didn't want it on my credit report that I'd had to resort to debt consolidation assistance.

A bank loan would actually help my credit rating, if I paid it off in time (as I certainly intended to do), so that was the approach I chose.

Over those five years, I've been working two and sometimes three jobs, toiling seven days a week for most of the year. And my efforts have slowly but surely paid off. I used the money from the bank loan to pay off all my cards but my American Express (which I have to pay off each month) and I closed each account, one by one. Then, as soon as I was able, I sent my father the money I owed him (the truth is, I could never repay my father all I owe him, but in terms of the money he loaned me when I was out of work a few years back, we're now square).

I also paid off a substantial sum that I owed my dentist, made a sizable charitable contribution that was promised in my book back in 2000 (I promised a donation to breast cancer research for each book sold, and that donation has now been processed), and finally, just now, I went online to make the payments that will bring the balances of both my Amex Gold card and my Amex Blue card down to zero.

I am, as of this moment, 100% debt-free.

And I'm feeling pretty darned good about it, I don't mind telling you.

Posted by brett at 12:23 PM | TrackBack