Budgeting

How I got into Debt…

The Beginning

Let’s rewind back almost 10 years to where my problems with money started. At 18 I moved out of my parents house and into a unit with my then boyfriend. I was studying at University and I had a bit of a shopping addiction. My bank (CBA at the time) offered me a $500 student credit card with no annual fee. I thought this was just part of becoming an adult, everyone has credit cards right? Now I know better and know more about The Commonwealth Banks “Dollarmites” scams… google it you’ll be surprised. 

Anyway…so at 18 I got my first credit card. I began to shop, I have no idea what I bought at the time but it was most likely clothes, home-wares, supplements and many things I most likely didn’t really need. I would shop in the breaks between subjects, often coming home before my boyfriend so I could hide my shopping bags. When you start to hide your bags and lie to people about your purchases I think there’s something wrong. It wasn’t too long before a $500 credit limit turned into $1,000…then $2,000. In the end my card got to a $6,000 limit and I maxed it out! *facepalm* 


The 2nd Debt

When I was 24 I got my drivers license (a bit late i know) and I bought my first car. I didn’t want to buy an older car so I took out a $13,500 car loan for a 2 year old Suzuki Swift. I do love my car but looking back on it now maybe I would have been ok with a cheaper 2nd hand car. I was very proud of myself though for not relying on my parents to buy my first car.  

The Cycle

Over the next 8 years I spent my time paying off the card and then when it was $0 I would tell myself that I wouldn’t spend anymore money, but inevitably I did. It wasn’t long before the card would be maxed again. I did manage to lower the limit down to $2,500 and this year in June I paid if off and I closed the account. I’ve now been just over 1 month without a credit card and it has helped me a lot. There are times I have wanted to spend money but I didn’t have it, and then I realised that I didn’t really need those items in the first place. 

Where am I now? 

Fast-forward to now, August 2017 and I currently have 0 credit cards and my car loan is under $10,000. I plan on paying it off within the next 12 months. I also have a HECS debt for my 2 Bachelor degrees which is sitting at about $50,000. I pay this out of my pay as I earn above the threshold for payments. I’m not worried about contributing more as it doesn’t incur any interest except for indexation which does change every year but is around 1.7%.

I’ll speak more later about my future goals and plans but that’s it for now! 

How did you start on your journey?

tasha

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2 comments

  1. Great read! I’ve got that problem too where I’ll pay a card off and then run it back up. Nasty cycle. I’m working on retraining my brain and habits. It’s been hard but I’m getting better. Congratulations and happy savings for the baby 🤗!!!

    Like

    1. Thank you! Glad you enjoyed it 😊
      Yea it’s a nasty cycle isn’t it! I’m so glad I got out of that cycle… I could have ended up with a lot more debt if I didn’t.

      Like

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