By Andrea at So Over Debt
As a self-proclaimed poster child for financial mistakes, I had a hard time coming up with a tale of stupidity I hadn’t already shared on my blog. After marrying a fellow spendaholic, living off credit cards and student loans, filing for Chapter 7 bankruptcy, ending up in MORE credit card debt, getting divorced, and (more recently) taking a job that doesn’t even pay my bills, is there really anything left to tell?
I’ve spent most of my adult life spending too much money and regretting it. It’s not that I haven’t learned how to be more responsible by now. I never make the same mistake twice - I just find new and more creative ways to screw up. And with that knowledge, I can assure you: There’s ALWAYS another story.
My ex-husband and I decided to get married during my first year of college. We began accumulating all the things we would need to begin our life together. Every payday, we went shopping for things like silverware, blankets, and towels. Family members gave us end tables and a mattress set. By the time we actually got married, the pile of household supplies in my parents’ basement had grown into a mountain.
When it came time to shop for living room furniture, I was adamant that I didn’t want to use hand-me-downs from family. My parents were still using the same brown and orange sofa set they bought in 1979 - there was NO WAY I was going to be embarrassed to have company in a house of my own.
We went to a local furniture store, where I found the most beautiful couch and loveseat I’d ever seen. They almost seemed too nice compared to the assortment of random furniture we would have in the rest of the house, but I was determined to get them. The price? $1500. More money than we brought home in a month at that time.
The helpful store clerk, sensing that we were shopping outside our price range, told us about a deal the store had with a nearby loan company. We could apply for a loan to pay for the furniture, then take advantage of the low monthly payments while living beyond our means! (Okay, that’s not exactly what he said, though that’s how I remember it when I think about it now.)
How $1500 Became $12,000
A few months into married life, things were going great. We made the payments on our personal loan like clockwork, and I refused to let anyone eat or drink on my new furniture. I was determined to keep it looking brand new.
Around Christmas, we got a letter from the finance company. Since we had made 6 on-time loan payments, they wanted to help us pay for Christmas. We could borrow an extra $1000 and our payment would stay the same! I reasoned that we could pay off the extra money with our tax return. We drove back to the office, signed some papers, and went on a Christmas shopping spree.
That spring, we did pay down the loan as promised. And the finance company sent another letter, this time telling us we could borrow a whopping $3000 - our payment would only increase by $100 a month! (Note that we never once questioned other terms of the loan, like the number of months it would take to actually pay it off.) Every time the balance dropped, we got another letter. And we just kept borrowing.
We took out the original loan in 2002. By the time we filed for bankruptcy in late 2006, I was shocked to see that our credit reports contained pages and pages of entries from the loan company. When I added them up, we had refinanced 23 times and had borrowed a total of $12,000. The only thing I could remember purchasing with all that money was my living room furniture.
Saying Goodbye to the $12,000 Sofa
When my ex-husband and I divorced in 2009, I left most of the furniture in the house. I didn’t want the memories of our married life smacking me in the face every time I came home. I saved as much money as I could to furnish my new house in a completely different style, one that reflected my personality and taste.
The one thing I didn’t have? Living room furniture. But there would be no personal loans to save me this time - for one, my credit was ruined because of the bankruptcy. Also, I was already struggling with the idea of paying for everything on my income alone; I was smart enough to realize that I didn’t need another payment.
I lived in my house for 6 months with no furniture. I had some of those folding outdoor chairs from Walmart and a cheap stand for my TV - other than that, the largest room in my house was completely empty. During that time, one when I was struggling to adjust to single life and figure out who I was, I decided I was no longer the type of person who would spend ridiculous amounts of money on things I couldn’t afford.
A Cheaper Sofa, A Smarter Owner
For one of the first times in my life, I pulled out my debit card, smiled, and replied, “No thanks. I’ll just pay cash.”
Andrea is a 28 year-old Licensed Clinical Social Worker. She is also a single mother who is working hard to get herself out of debt and more on to bigger and better things. She blogs about her journey out of financial chaos, hoping to help others who are in similar situations. In her own words:
"I decided I’m just over it. I’m over bank fees, trying to float checks until payday, and borrowing money from my parents. I’m done with the turmoil that comes when you truly don’t have enough money to last the week. I want to provide a better financial example for my son."