My name is Amber and when I was eighteen years old and still in high school I moved out of my parents’ house and became independent. I was uneducated in how money worked in the world. I had never lived on a budget before because I hadn’t needed one. My parents owned the house and paid all expenses. The only thing I had to worry about was gas for my vehicle and leisure activities. During my senior year I applied for a credit card and was approved. My plan was to build credit by using it on groceries and such and pay it off at the end of the month. Little did I know how dangerous it could be.

I moved out thinking that I made enough money to live on my own and when I was in a bind I could just swipe the piece of plastic I had been approved for and pay it off at the end of the month when I got paid. This worked for about 3 months until I discovered how easy it was to use the card. I never kept track of my expenditures by balancing a check book and when the bill came and I did not have enough money to pay it off, I would simply tell myself “Oh, I won’t spend as much money next month and put the left over towards the extra I spent this month.” I never took into account how much the interest would accumulate to. Pretty soon, I found myself swimming in a pool of debt and couldn’t find the ladder to get out.

I picked up a second and third job to help myself get out of debt, but even then I had this mentality that I could easily get out of debt later and use the extra money to buy things that I wanted; however, I did not stop paying any bills. In fact I did put more money towards my credit card bill every month, just not enough to make a dent.

When I moved to a different state I took that debt with me. I was unemployed for about two months and it wasn’t until a year after moving that I decided to get a move on paying it off. The first thing I had to do was to better educate and discipline myself on money matters. One of my associates then helped me set up a strict budget. We looked at all my expenses along with the goals I had for myself. We met once a week to go over my budget and goals and to make sure everything was intact. It was difficult, but with the help of a budget and someone there to discipline me, I was out of debt in no time.

Something that I learned is that you can’t freeze all spending. When setting up a budget you must allow yourself a little bit of money for leisure activities. If you don’t give yourself this little room to breath, you will quickly become overwhelmed and feel like you will have to live like this the rest of your life; but the truth is, this is only for a small period of time until the debt is paid off. Once the debt is paid off you can reset the budget and have more money for spending. Setting a budget, discipline, and allowing myself some spending money were key in helping me achieve my goal to get out of debt.

This entry was posted on Thursday, December 15th, 2005 at 2:27 pm and is filed under Debt. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.