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.
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?