Personal Finance 101

...or, what not to do with your credit cards.

Demonstrating an element of my anal retentive attention to detail, as well as an apparent penchant for broadcasting my impecuniosity to all and sundry, herewith I present a brief yet poignant lesson on the inherent perils and pitfalls of the improper use of one's credit card.

In the 5-year span of time between May of 2000 and May of 2005, I tracked the monthly balance on my primary credit card which has long since, I hasten to add, been hacked to itty-bitty bits and disposed of with gleeful alacrity.  Somehow, having amassed enough Airmiles to claim several hundred dollars worth of 'free' camping stuff doesn't seem worth the investment it's been.

A perfunctory review of the graph below (click it for a larger image) will reveal a number of labels demarcating significant events in my life as represented by steep inclines and declines in my credit balance.  Oh what a sordid tale it tells!  (Red = bad, Black = good; the dollar values have been deleted to conceal my overall level of chagrin.  The point still comes across like a nail gun to the temple.)

Please note throughout this diatribe how wonderfully accommodating the fine folks at MisterCrap have been over the course of five years in raising my credit limit just as I was about to run out.  That's swell!  (Though I could also have gone back and calculated the total amount of interest I've paid them over the past five years, I choose ignorance on that matter for reasons of personal pride.)

A  I fell madly in love with the woman I wanted as my wife and bought her an engagement ring.  I didn't really scrimp on it either.  At the time, I was working out of town and bringing home more bacon than I am now.  I am at a bit of a loss as to the current location of that porcine prosperity.

B  Oh look, I'm paying it down!  And, like, right away too.  I'm still single, though engaged not to be in the near future, both me and my prospective spouse are working and all is right with the world.  I think I'll go out and invest in a pair of rose-tinted glasses.

C Dear parents and soon-to-be parents-in-law, my fiancee and I would like to pay for this wedding ourselves so we can have just exactly the special day that we both want.  This is not to say we, in any way, intend to shun your assistance, or to infer that by contributing your own funds to the merry occasion you would subconsciously feel obliged to impose some part of an insidious agenda on what is otherwise going to be the best day of our lives.  It's just that, well, we want to show that we can do it on our own, financially speaking.  We can do it! 

(What the f--k were we thinking!?)

D And after our wedding, let's go on a 2-week all-inclusive trip to Costa Rica.  Damn this is fun!  Plastic isn't really money, after all.

E Returning from our honeymoon, full of anticipation of the life ahead of us, we still are able to exercise fiscal responsibility and pay down some of our debt.  Yay us.  We totally rock.  C'mon life, bring it on!

F Holy cow, you're pregnant already!?  I know we pulled the goalie on the honeymoon, I just didn't think we'd be so, umm, successful so soon!  So... what do we need for a new baby?

Oh...  That much?

G Another tax return headed for the credit card, Jeepers effin' Cripes I hate paying down eighteen point nine-nine percent!

H Pregnancy overruling all other concerns, wife unexpectedly not working (read: no mat leave) due to an inability to maintain genial customer relations while simultaneously retching over a toilet, lots of baby stuff to prepare for.  Hair loss.

I I have no idea how we paid that part of it down.  Lost in the rose-tinted haze of my idealistic twenties.  I'm still quite idealistic, just getting firmly entrenched in my thirties, that's all.

J Tax return again.  Dreams of home renovations and backyard landscaping remain but a figment of our imaginations.  Mmmm, figments...

K Several weeks worth of meetings and signing of papers with the bank.  Debt consolidation is a good thing.  No more credit card debt, no more student loans, no more line of credit.

Now repeat after me:  NEVER AGAIN!!

It's too late to save my own hair line, so please learn from my wonderful experience and you may retain your flowing locks for many years to come.  Mind you, scalp stubble is sexy.  Bald is the new mullet.

Comments

[Tina]

The bottom line ?? Love is expensive. And making love is even more expensive........... my son just reached the quarter century mark, and he is still costing us money. And I am waiting to see the light at the end of that loooooooooong tunnel ..... Tina

[Penny]

You are absolutely right. We did the same thing in our twenties, took until our 30's to pay it off( 3 kids in the space of 5 years, we're like rabbits that way!) and we keep one card for emergencies, which I'm happy to say we haven't used in a year and don't use unless we can pay the full balance within 30 days... hard lesson, but if it saves one person from the hell of revolving debt, it's good advice!!!

[Simon]

I love that line, Tina...
...and making love is even more expensive. How wonderfully true that is.

Penny, that's the habit we're getting into now: no money in the bank does NOT mean that the credit card is open for business. Lesson learned; big time.

[fv]

I say this not to gloat but rather as an example that it can be done.

My wife and I use the credit card for everything we would normally use cash for (don't have to carry as much cash and no Interac fees). Then we pay it down before the end of each and every month. We pay 175$ for the Avion points card which usually nets us a free ticket in North America each year. Not too bad and the credit card companies HATE us. They make very little off us.

If any family has not sat down and done a household budget with all the income on one side of the sheet and all your expenses on the other, that's just asking for trouble. My in-laws are terrible at their finances but after a quick trip to the advisor at the bank they saved thousands and got their budget on track.

I cannot thank my high school economics class enough. I'm glad I paid attention to a great curriculum.

[fv]

Oh, and I'm advising any and all kids of mine to elope. Weddings are way too expensive. I'm not looking forward to finding out how expensive kids are.