Imagine this, we go from our sheltered lives of having our parents pay for everything, and then all of a sudden we move out and are thrusted into adulthood. Just because the age on our license determines whether or not we are legally adults, this doesn’t mean that all of us prepared adults in the emotional, and financial sense. My parents took care of me very well when I was younger, taught me responsibility by insisting that I work hard from an early age. Yet still I grew up spending more money than I would make. I think I mostly attribute this to making a paycheck from a young age, learning the value of working hard, but unfortunately I would always rather spend it than save it.
Spending all of your money is only part of the problem. After all, you can go broke by spending every penny that you make, but you can’t go into debt unless you spend more than you make. This is a valuable lesson that took me about a decade too long to learn. My first credit card only had a $200 limit, my parents warned me, but I figured I couldn’t do much damage with that small of an amount. Then one evening I was driving home and popped a tired and damaged the wheel. I didn’t have enough to pay for the full amount of the damage so I charged the remaining portion. After that my credit card company began slowly (but what seemed to be exponentially) increasing my spending limits. I kept thinking “I only live once” and proceeded to use my card for clothes, vacations, nights out, etc.
So this began my inevitable descent into debt hell! I spent most of my formative years looking for the next best balance transfer offer available. Pay a “small” 3% transaction fee but then I get 0% interest for up to 12 months. “Up to” usually meant I only got about half that allowed time, and my transaction fees began to account for more and more lost money, and then when it came time to start paying monthly interest again I was in more debt than when I began.
It took years of effort and believe me there was no one solution to solving my debt issues. Cutting back on your daily latte won’t solve this sort of problem, but cutting back on all additonal expenses is one important step. I also found a side hustle to make additional money, this has provided me a nice cushion. I went back to school and got my MBA to further my day job, a huge benefit. Be smart, don’t fall into my trap…but if you already have then stick with me and I’ll help you navigate your way out!