In the middle of my senior year of high school, I got a job at Arby’s in order to pay for the car that my mom had purchased for me. At this point, I only had a checking account, a savings account, and a certificate of deposit. A debit card came with the checking account, and I used it to make the occasional purchase of a coffee on my way to work, or the many candy bars I ate in the Wawa parking lot in the middle of the night after a closing shift. All was fine and dandy until I started using the card to make purchases such as soccer pants and other clothes that are ridiculously expensive. I probably overdrafted my account five times, and I wasn’t saving any of it either. The problem escalated to the point where I was splurging every paycheck, and none of my family knew what was going on or even that I was having problems managing my money. So they didn’t think anything of it when I applied for a credit card – and it came in the mail.
After I got my credit card, the spending increased as my fear of debt decreased. Becoming “seasoned” to the high life made me swipe that devilish piece of plastic until my stomach and arms were full. I turned to the mall as my outlet, because at the time I was going through a bout of depression and never wanted to be home. I paid as much as I could every month, but the money that I was making at my job was less and less qualified for paying the bills. Instead of cutting my spending, I got increasingly angry with my manager as I received fewer hours with each passing week. There was no way that I was going to have the confidence to ask my parents for financial help, but there was also no way that I was going to make it out of my debt without their help. So, after I racked up almost a thousand dollars on my credit card, I made my mom take it away from me.
Then the fun began.
My entire family figured out about my spending problem and began to micromanage me, asking about where I had bought clothes and how much they costed. My mom also began asking about my payments each month, and gave me leeway on my car bills. It felt like I was a child again. I couldn’t be trusted to not blow all of my money on a single trip to Target. I told myself it wouldn’t happen again.
But it did.
I went to Wisconsin on vacation to see a friend at the time and her family, and we ended up going to the mall a few times while I was there. We stopped in Victoria’s Secret to get some fancy undies – because that’s what girls do, right? My friend didn’t have any money, so she put her order on a credit card she applied for. I had the money, but I decided to do the same for some kickass deals. However, I did not expect that I would lend her more money and not be able to make the payment on it.
And the other debt still loomed.
This is where I started to work my ass off, and forget about spending anything, really. After about a month of that, I moved to CNU. Currently, the balance on my first card has been cleared, and I have made progress on the second card. I now have a job that will help me finish out the payments so I can finally start saving again.
Here are a few tips to help you not end up like me:
1. Only spend what you have. The minute that you spend more than what you know is in your bank account, you are going into debt, even if it is just a small purchase. Do not depend on your next paycheck to come up with the funds from your purchase, no matter how inexpensive. Once you start thinking like that, the pattern could continue and soon you could be justifying buying, say, a laptop. A credit card cannot be exempt from your budget.
2. Don’t look at your entire paycheck as spending money. Unless you are fully financially covered by your parents, you probably have some form of bill to pay, or you are obligated to put some of the money you make into savings. If you spend every penny of every paycheck, you could develop poor savings skills and/or get into huge trouble with whoever you are paying bills to.
3. If you are prone to wanting luxuries, work for them. This one is simple. If you know you want the finer things in life, and you’re a grown-ass adult, you have to go and earn those things.
4. Open savings accounts and IRAs early. If you don’t already have one, go get yourself something to put those coins in. Two great accounts you can start are a CD (certificate of deposit) or an IRA (individual retirement account). Both of them make good dividends, and you can’t take money out unless you like fees. Plus, a Roth IRA taxes you now and not later (retired you will thank younger you!). No one is ever too young to start. No, not even you, 16-year-old.
5. Take steps towards a good credit score. Even though having a credit card is dangerous and can get you into a lot of trouble, it’s beneficial to have if you actually make the payments every month (a lot of your credit score is based on if you pay on time). The more active you are in your finances (and the less negative balances you get), the more likely it’ll be that you’ll be able to get that new car or that apartment you’ve been dreaming about. But of course, make sure it can fit in that pretty little budget. Or big one. I don’t know your life.
6. Don’t be afraid to seek out help. It is crucial that if you are currently in debt and you don’t see a way out to reach out to someone. Ask for help. The last thing you want to do is put it off, I promise. There are people out there who care about you and would help you in a time of trouble. It may take a while, because getting out of debt is not easy, but you can do it.
Now stop reading this article and go set up those savings accounts. Seriously. And put some money in those bad boys.