A number of years ago, I was a paycheque to paycheque kind of person. In fact, I was a paycheque to credit card to line of credit to paycheque kind of person. I never had enough money. Ever. And truth be told I was always behind, constantly paying interest on things I shouldn’t have put on credit in the first place, and always borrowing money from places I really shouldn’t. I had a revolving line of credit that was always maxed out and all I ever paid was the very minimum.
I felt bogged down in the worst way, and was always jealous when friends would be able to buy things like new computers or new designer clothes or $300 purses. I always felt poor, despite whatever my wages were.
On the plus side, I did have an employer RRSP program that I contributed to on every paycheque. That is about the only thing I had going for me. Seriously.
One of the things Ross can take credit for in the early days of our relationship is that he led by example and taught me how to manage my money better. I was banking with a big bank and they just kept piling on credit and it seemed like a great idea in my mind and I kept saying to myself “I’m establishing credit, right?” I was rarely late with a payment – but I always carried a balance and paid off only what I had to. Of course the bank loved me. I was paying them huge fees.
I decided I needed to get a hold of my money, and I made an appointment with some faceless bank employee(okay not really faceless, but someone I had never spoken to before), and they basically told me that the personal loan I wanted to pay off the revolving line of credit was a BAD IDEA and that I should just figure out a way to train myself to not use the line of credit. It was like I was inconveniencing him by even asking.
But I know myself, and I knew at the time I needed a reason to stop the cycle. And what better reason than “NO LONGER AN OPTION”?
So I checked out what a local credit union could offer me. I told them “this is what I want and this is how I want to do it and this is what I want from you and I don’t want to pay anymore than this and blah blah blah.” I didn’t really think that I was a good “catch” in terms of a client, but I wasn’t willing to make a change if it wasn’t on my exact terms.
And the woman looked at me and calmly smiled and said “Uh, anything else? You know, like something difficult to offer?” She won my business right there.
So, I started paying off a personal loan – you know, one I couldn’t rack up again and one that had a reasonable amount of interest and one that paid off not only my line of credit but also my high interest credit card – and for three years I diligently made payments and never carried a balance on my credit card (truth be told, I hardly even carried my credit card at first).
Last July, when we bought our house, I was three payments away from paying off that loan completely and just to make life easier, we paid it off with mortgage proceeds. it was a huge relief and signalled the end of my early adult life where I made poor decisions and didn’t ever think about the re I no longer have a loan. And I finally learned to stop carrying a balance and I finally learned that a credit card CAN be used carefully and wisely.
Now, I live in a cash based world and although money can occasionally come up as something to monitor with interest, it rarely comes up in a stressful way. When I have a bit of extra cash, I can spend it. If I want something I save, and if I don’t have any, I stay home, read books, and throw myself into work so that I can get some more fun money.
You should know that my recent purchase of a fancy pants new Macbook Air prompted this post. I found an amazing limited quantity deal on a refurbished Macbook Air on the Apple website, for a computer with way more bells and whistles than the one I had been planning to buy in a month or so. It is four thousand times* fasterbiggerstronger. But, it was certainly a much better deal and considering I use my computer for at the very least 3 hours a day for paying work, a highly functioning, reliable computer is an essential piece of equipment for me. So, while I had already saved a portion of the budgeted amount for a future purchase from my regular income, I did have to use a portion of our savings to make the purchase… something that was very reminiscent of my days of taking credit card cash advances to make payments on my line of credit and doing it in reverse. Fortunately, our frugal cash-based-no-debt lifestyle gives us room to make allowances for rifts in the fabric such as buying a computer a month before scheduled because it really is better value.
*okay, not really.