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Note: I first posted the message below in the Budgeting section of the Message Board. I have gotten immense support and encouragement in response. Thank you. A very kind reader suggested I post this in the Credit Card section, and so I have.

I have added a few remarks specific to credit card angst and resolutions by detailing my CASH DIET. I hope it helps.

This is a long story chronicling my immense stupidity, but ends on a happy, profitable, informative note. Those who would benefit most from reading it would be singles in their 20s, especially those living in image-oriented 'young' cities, and parents of kids in their 20s.



Living on a budget is a very difficult thing to do, especially if you are single and living in a social, image-oriented city. It is as expensive to be single for men as it is for women, although expenses are allocated differently. Women spend a lot on their looks (beauty treatments and apparel) and men spend a lot for the attention of women (dates and trappings).

When there is so much pressure to be your most attractive, most desirable self, you fall prey to a high consumer lifestyle that's pervasive among your social set - seemingly every where. Living a high credit, high consumption lifestyle is like living in sin with a tempetuous lover, full of rage and an entitlement attitude.

When you decide to act independant of the 'beautiful people,' you are left literally alone. But in the place of your former crowd, all enjoying the largesse, you find such peace of mind a crowd can never provide.

This is my story of overwhelming debt and a rewarding outcome. I just turned 30 and am relieved all the mistakes of my 20s are behind me.

I graduated from college in 1992, during an economic downturn. I moved to DC, a very expensive city, and was lucky to be hired for $19,500 as a paralegal. My rent was $500 a month and my take home pay each paycheck was $612. I opened a savings account to put all of my overtime pay into and lived only off my salary. I never spent my overtime pay for fear of becoming dependant on it. I quit my job to go back to school and lived off my savings of $5000 from DC.

I did well for myself. But I could because I had no credit card debt, no school loans, and no car payment. My generous parents allowed my success to happen by not burdening me with debts. In fact, it was so lean that my dad offered to subsidize me to better afford DC. But I declined the offer because I was afraid that if I became dependant on his money, he could never give me enough over time.

I got my first credit card in 1993 when I went back to school. I kept the balance low for two years. Then I started dating a guy, a very handsome conspicuous consumer. He could afford to spend because his parents gave him a hefty allowance on top of his stipend. He saw my credit limit and thought I was rich!

I finished school and took a job in Atlanta that I thought paid me well. More money than I had imagined! Sadly, it was average for a liberal arts major. My expensive, spoiled boyfriend thought now that I was really rich.

My whole financial outlook, all of my values flipped immediately when my boyfriend gave me THE WORST ADVICE I have ever gotten: "YOU CAN AFFORD THOSE MONTHLY PAYMENTS!!"

After dating him for two years, running up debt by opening every store credit account plus the maxing out the one Visa, and requiring the financial crisis of being laid off - I dumped him and told him that he costs me more money than his company was worth. I also got a new job that offered a great future and not just a salary I wanted.

But, I did start to date some one new who intimidated me. He was handsome, educated, popular, a professional, and older than me. So before I got savvy, I bought a whole new summer wardrobe on a new credit card, Visa 2. I had to have something nice to wear, given how much socializing we do!

I've always had the privilege of being beautiful. But beauty is repulsive when coupled with stupidity and massive debt. My insecurity was expensive at 19% annual interest. I dumped him also, but carried that legacy for years. Every time I looked at my Visa bills, I hated ever having dating those two guys. I never dated (for very long) expensive guys again. I recognized their behavior much sooner, luckily. And I never allowed myself to be insecure at this high cost again. I couldn't afford it! But I still owed....


FAST FOWARD: Tired of living with the fear and loathing that carrying such debt assures, I started on a CASH DIET to pay off all the gazillion credit cards and the two maxed Visas. I never wanted to be this stupid, this scared again. I never wanted to feel so vulnerable and fearful that high debt living ensures ever again.

CASH DIET DETAILS:
1. I looked at my paycheck and wrote down all the real expenses: Utilities (Gas, Power, Phone, Cell, Cable), Student Loan payment, Insurance, Food and Gas.
*** Those expenses are stable and fairly constant so factor them in your six-to-twelve month budget. Always pay your utilities on time and never let a payment lapse month or two. A $30 power bill can turn into a $100 bill due NOW with late charges. A deposit to open an account for utilities can be up to $250 if you have a bad payment record with them. And a re-insallation fee, after being cut off, is about $100 and you must pay the bill in full at that time. Ouch. Hard lessons learned.
*** For my food expenses, I limited my grocery bill to $40 a week. I went shopping once a week and took out $40 cash for the trip. Cash limits your purchases where a check can be made in any amount. To pay in cash each time - I tallied the price of the food as I picked up each item, rounded up to the next quarter, and added 10% tax on top. When I went to the check out lane, I was never short on cash, nor did I have to wait for a manager's approval for a check. I ate very healthily, creatively on a limited budget. Eating out is expensive, time consuming, fattening, and stymies your culinary skills.

2. I reserve $50 cash for entertainment. I would go to the ATM only twice a month and take out $50 for each pay period for entertainment. That was ALL the money I had to spend on entertainment for two weekends. If I run out of money, I go home and don't go out the following days.
*** I wouldn't go to bars with cover charges. Waste of money. I figured the bar owners should be paying ME to enter their establishment!
*** At a bar, I would only buy one beer - no more. Beer is cheaper than liquor drinks and bottles don't require a hefty tip to bribe the bartender to make the next drink stronger. I would nurse the beer and focus on conversation with others. When you aren't drunk, you look a lot more attractive without the dead eyes, greasy hair, and stupid remarks. You also save money preventing food binges to cure a hangover or quelch a craving.(And DUIs have ruined some men I know. Who can afford the lawyer or the fines or the shame?)
*** My cash diet required that I hang out with friends who didn't spend a lot of money on entertainment. They didn't need distractions to relate to other people. I lost a lot of acquaintances and made a lot friends. But at first, I was often alone.

3. Then I looked at the balance: it was $300.
*** With my paltry $300 a month to pay off debt, I wrote a list of all the credit cards in order of highest interest rate. Regardless of balance amount, I paid off the card with the highest interest rate. All the store accounts with little balances (usually $600 at 22%) got paid off first.

It took eight months for all the little accounts. Now I had two big Visas left. It took a year and a half to pay those off. What ever extra cash I got - company bonus, birthday money, returned Christmas gifts, pawned items from boyfriends past (except the good stuff!), rebates, pay raises (2 for each promotion), and tax returns - went with single minded focus to pay off debt.

There were significant changes in my lifestyle:
* I stopped highlighting my hair at $150 a visit, and grew it long (fewer hair cuts at $80).
* I stopped getting my nails done at $45 a month.
* I cut off my cable and cell phone, saving $50.
* I got reading material from the Net and ended magazine subscriptions.
* I also studied to improve my job-related skills and advanced my career considerably. I got reimbursed for job-related reading materials, saving lots of money. And I got promoted with pay increases as a direct result.
* I stayed at work later and skipped Happy Hours.
* I made all my own food - I refuse to pay for dinner when I can make a better meal at home (and got to be a great cook!).
* I started running instead of paying a gym membership at $300 a year for aerobics.
* I insisted on looking good in all my existing clothes than believing I would only look good in something new. It's cheaper to stay a size 4/6 than buy a second wardrobe of 8/10s.
* I moved into a cheaper, much uglier apartment. It was in a much better location so more friends came over to visit me than me having to drive over to see them.
* I kept my old car running. An oil change at $40 every three months is much cheaper than a $300 a/mo lease. And the insurance is much cheaper, too.
* I particpated in our company's matching 401K, saving a lot on income taxes.
* I also changed my tax exemptions in order not to have a tax refund but a near zero balance. The difference of $50 to $100 a pay check went to pay off debt. It's my money, after all. The government keeps it for a year without paying me interest while Visa is charging me interest monthly. That makes a tax refund very expensive, indeed.
* I emailed all my friends rather than flying out for the week or phoning them for an hour at a time. The good friends emailed me back to save their own money. And I learned they are talented writers as I reread their brilliant, enjoyable emails.
* I opened a bank account without a monthly fee and free access to on-line statements.
* I check my account daily on-line to make sure people are cashing my checks. A missed payment can really cost you in interest and late fees. If a utility or credit card is not cashing my check, I call them and tell them to hurry up. And I get a confirmation number that I called regarding a payment. I write that number on that months bill and keep it until the check is posted. CYA. Balance your check book frequently against the bank's statement. Always save every bank statement and credit card bill for proof of payment and to track your spending.
* And most helpful - I stopped being an expensive date.

In two and a half years, I paid off all credit card debt. I slowly saved money to buy a condo. I prayed to ever qualify for a loan. I was certain that someone with a profligate past would get rejected. I qualified for a mortgage loan with the small down payment, but bought a place for $20,000 less than what I qualified for. I did this because I didn't want to be strapped. I wanted to keep living below my means as I had succeeded in doing for a year. And - the cheapest property I liked stood to appreciate far more than the more expensive properties ever could. When I bought my condo, my criteria was only that it would appreciate. I removed emotion and looked only at appreciation.

Now at thirty, my net worth is in the 6 digit range. In one year's time, I have property, an interest-bearing check account, 1 visa card and 1 corporate AmEx (my company trusts me), a money market account, a growing 401K account, and an Employee Stock Purchase program account. Contrast that with three solid years of debt reaching $8500 at 18% and constant worry. My salary has increased by 50% since my high spending days, but only in the last year.

I am very happy at this point, but there have been sorrowful sacrifices that I have made. I have been alone in all of my efforts all these years that I have been dating. I've been dating handsome, successful, charming, professional men - but very few with my financial outlook and none with my values. The vast majority live on credit cards, charge all their meals and huge bar tabs and even movie tickets, lease their nice cars, and rent from high-rent apartment complexes. They are living more excessively than I was years earlier and I don't want to be taken back to then!

Even my girl friends lived in excess. They really believe someone will swoop them up and pay off their bills. But the men they are dating are expecting the same of them! They each think the other is rich because they look it - but every one is broke.

I had to exile myself from every one I knew I couldn't afford to enjoy. With my $50 cash limit on entertainment to cover two weekends and my refusal to put any thing on credit (because they were maxed), my high rolling dates and girlfriends left with each other and not with me.

I also directed my career by orienting it towards computer technology and acquiring certifications. That meant nights home studying on my computer than having another high time in Buckhead bars with the Beautiful People.

I came to realize the men I dated and the girl friends I knew resented my judgement of their excessive lifestyle. Although I never said anything critical, I revealed my differing opinions with my actions. I am famous for saying, "No thanks, I'm on a cash diet" to paying with credit all the time.

Men really resent it when they percieve themselves as financial failures (implying professional, social, and psychological doom) in contrast to a pretty, ditzy young girl. They would rather believe I am an incompetent or a shrew. It helps their egos to disqualify my efforts, though it hurts my feelings and tries my patience.

But in time, I kept my best friends and got closer to the frugal friends I came to genuinely appreciate - because we had the same values. As for men, the best man for me will also come in time. He won't have a flashy car, rent a fabulous apartment, or charge it all on platinum cards, but he will have the confidence that a high net worth provides. I only hope that he has learned from his many mistakes as I have. The lessons were worth the price.
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