By Brittany Sorel | December 14, 2010
I used to be a big spender who could not control my credit card use. I had a Visa, a Discover, a Dillard’s Card, a Gap Card and a Macy’s Card. They were all maxed out except for the Visa card, and I had $14,600 in debt at the age of 27. The worst part was that I felt ashamed and used to bring my shopping bags into our apartment when my roommate could not see me.
Then I got a new job that I really liked a lot and wanted to impress my boss and do well. About a month after I started the job, my car died. I needed to buy a reliable new car so that I could get to work on time every day, but I was turned down for financing because my credit had started to suffer. I was making only minimum payments and was sometimes late or would even skip a month. I didn’t know how bad this was at the time. I just thought I’d catch up somehow later.
I had to tell my roommate my situation – leaving out some of the details about my credit problems – and ask her for a ride to work for a few days until I figured out there was a bus stop about a mile and a half from our apartment. By the time I walked to the bus stop, rode the bus, and walked the rest of the way to work, it took an hour and a half to get to work. My commute used to be about 25 minutes.
I finally talked to my Dad and asked him to help me. He was pretty disappointed, but offered to help. He put me on a plan similar to the one that Wendy writes about in her FinancialRx series on getting out of debt. He also helped me buy a used car. He paid cash for the car up front and we wrote up a legal contract together, outlining how I would pay him back, and I signed it. It said that I would pay him 2% interest over 4 years. It was a great deal.
We also wrote up another contract and we signed it. But this contract had a bunch of financial challenges in it. I had to cut up and cancel all of my credit cards but one. The one I did not cancel, I had to give to him. He sat next to me while I did this on the phone! I also had to pack a lunch to take to work at least three times a week. My mom bought me a beautiful lunch cooler and stainless steel thermos so it would be fun. Since they live just an hour away, they also made a standing “date” with me every Sunday night so I could have at least one home cooked meal and take leftovers home with me to save money. The contract I signed with my Dad also said I could only spend $200 a month on “entertainment,” which includes things like eating out, movies makeup and clothes.
At first I thought it would be hard, but now I got my roommate on board and we like to scour the town for cheap happy hour food and drinks together! I no longer hide my shopping bags from her, but instead show off a great recipe I just made. Sometimes, to have fun for very little money, we invite our girlfriends over for a Trader Joe’s Wine Tasting night. It’s a blast! I’m finally living within my means and loving it!
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