My Financial Crisis
There is only one thing that has ever threatened to stand in the way of my traveling lifestyle.
I was once in serious, up-to-my-eyeballs-for-no-good-reason, painful, crippling, grounding debt.
And I don’t usually talk about it because, well, it’s embarrassing. How does a seemingly level-headed college graduate get herself into $40,000 worth of debt?
I’ll tell you how.
Leather boots. A quick trip to Italy. A round (or two, or three) at the pub. Train tickets. An EasyJet flight to Prague. A set of quirky salad spoons for my mom for Christmas. A skydive in Cairns. Foreign currency transaction fees. Interest rates. Balance transfer fees. Delusion.
Obviously, debt wasn’t really my problem.
I was my problem.
My spending habits didn’t match my budget, but that didn’t stop me. I applied for my first credit card in 2005, from an internet cafe in Australia. My parents sent it to me via priority mail, and my own personal debt crisis began.
I still worked, of course, but treated my MasterCard as a secondary income stream. My favorite trick was to pay for group purchases on my credit card, so other people paid me in cash. Instead of using that cash to pay off the initial purchase, it became my spending money.
When I came back to the US in the summer of 2005, I returned with a cancer-worthy tan and $3,000 worth of credit card debt.
So I stayed home for a while. I worked as an office assistant, waitress, freelance writer, and university project recruiter, all at the same time. I almost landed my dream job, but didn’t. I paid off the debt. I saved, real money, for New Zealand.
I got a second credit card, just in case.
And the cycle continued. In New Zealand, I accumulated new debt. I paid off some of it during my summer in Florida, but not all of it. After all, I had to save for my Next Big Thing: a master’s degree in London.
This is when I really got in over my head but didn’t realize it.
In the fall of 2007, I went to London with barely enough money to keep me afloat. In addition to the remaining $3,000 in credit card debt, I now had a $25,000 student loan to contend with.
If you’re keeping count, that’s $28,000. But we’re not done yet.
That was okay, I figured. Everyone knows that student loan debt is ‘good debt.’ Besides, I got a partial scholarship, so £3300 of that loan didn’t count. I would get the money back in installments throughout the year.
I arrived in England in September, but didn’t start working until November. Good thing I had those credit cards, huh?
One night at a pub in Amesbury, I left my purse on the bar.
I never saw that purse again, and waited for nearly two months (thanks to a conveniently timed Royal Post strike) for a replacement debit card.
Until then, I used my ’emergency’ credit card. Repeatedly. When the pound was worth twice as much as the dollar.
It’s easy for me to look back now and say that I was an idiot, just as it was easy at the time to say, “Don’t stress. You can always make more money.”
That became my mantra. I recited it often, especially when panic lingered at the fringe of my mind.
“I’m young. I can always make more money.”Swipe.
That’s true, but it’s not an excuse to spend £75 on a pair of boots from River Island that you end up leaving behind a year later because you don’t have room in your suitcase. And at 26, I was no spring chicken.
The problem is that once you’re in a little bit of debt, it’s easy to get into a little more debt. I told myself that once I finished my degree, I’d be allowed to work in the UK full time. Then I’d pay it all off and start fresh.
What a load of crap.
Being in debt is like walking around with a vulture on your shoulder, its talons constantly digging into your flesh, its hot wormy breath lingering in your ear.
Really. It’s like that.
It doesn’t get smaller, it doesn’t go away, and all you’re doing is digging your future self a grave. You absolutely cannot travel on credit and expect it to be okay.
When I finished my degree, I got my final scholarship check. It was right around the time when I was offered the chance to become Busabout’s summer blogger. They were going to pay for my travel plus a daily stipend towards food and accommodation, but it wouldn’t cover everything. I’d still need some of my own money.
What do you reckon I did?
That’s right. I could always make more money, remember? I took that scholarship money and I went to Europe for six weeks.
Now this expense was worth every penny. Even though it was technically a major financial strike, I don’t regret it, because I met Jared.
And things started to turn around.
One thing you should know about Jared is that he was an economics major.
Imagine falling, hard, for someone who is really good with money when you are undeniably terrible with it.
I kept it a secret for as long as possible. Sometimes I alluded to a distant notion of being in debt, but I never came out and said it:
“I’ve got four credit cards and the balance is almost $15,000. Oh yeah, I have student loans, too.”
Still counting? We’ve now maxed out at nearly $40,000.
In the months after Busabout, I moved into a new apartment and applied for a Tier 1 UK work visa. The security deposit, first month’s rent, and visa application fee cost nearly £1000.
Now I didn’t have that money, but my credit card did.
I convinced myself that my only option was to take a cash advance, transfer the balance to a brand-spanking-new Visa card (two, actually), then pay it all off ‘as soon as I got a new job.’
Eventually, though, I had to say it. You can’t build a relationship with someone and keep them in the dark about your dirty little secret.
So I did. And I hoped he wouldn’t walk away from me right then and there.
He took a deep breath. It was one of the few times I’ve seen him stunned into silence.
“That’s – ” pause. “That’s really bad, Lauren.” Pause. “Really bad.”
I cried. He listened. I cried some more. It was all a bit pathetic, really, because I was entirely to blame.
“You have to pay the credit cards off,” he said. “All of them.”
“Okay,” I sniffed.
And it was that easy.
Well, not exactly. But he was right. I had to pay them off, so I decided to just do it.
We flew to Australia in August of 2009, and moved in with his parents in Newcastle. Luckily, it was nowhere near as awkward as it could have been.
“Surprise! Nice to meet you, I’m your son’s American girlfriend…and your destitute new roommate! Where should I put my bags?”
For one year, I worked. For the first six months it was minimum wage at a surf clothing store in the mall. After that, I switched to a recruitment agency. Once a month I used PayPal to send money back to the States, where it went directly to my credit cards.
Then I started doing content-mill writing work, churning out articles for $25 a pop on obscure topics like ‘How to Deal with Husband’s Hair Loss‘, ‘Jalapenos & Skin Burns‘, and, in an insane example of irony, ‘How Much Money do I Need to Move to Europe?’.
Most importantly, I stopped buying things I didn’t need. I didn’t make commitments that I couldn’t afford. It also made a massive difference that my rent was free and we paid only a minimal amount to his parents for food and bills.
My social life was relatively quiet, but I never felt like something was missing. Actually, I hardly felt like I was giving much up. Turns out that living within your means can still be pretty comfortable.
The most frustrating part was knowing that Jared was saving money while I was using mine to fill up a hole. We contributed equally to a joint account, but the rest of our income went to very different places. I hated knowing that my past actions were haunting my present, and that we weren’t really on equal footing when it came to money.
Every few months, I got on Skype and cancelled another credit card, taking immense pleasure in rejecting each company’s attempts to keep me as a ‘valued customer.’
By July of 2010, I had zero credit card debt.
I whittled my stash down to one credit card. When I do use it, usually to book flights and accommodation, I pay it off immediately.
Eighteen months later, I’m in rural Korea. Thanks to a housing package, decent salary, and the moral support of a financially sensible boyfriend, I’m halfway through my student loans and I’ve visited Vietnam, Cambodia, Hong Kong, China, and Mongolia. By the time we leave, I will have added India, Hawaii, and Japan to that list. I also hope to be totally debt-free.
One of the misconceptions about travel is that it’s expensive.
Well, that’s wrong. Travel doesn’t have to be expensive.
It was never travel that got me into this mess.
It was a series of poor decisions and denial, and facing reality got me out of it.
I’m proud and, most of all, relieved that my credit card debt is behind me.
Regret seems to be a wasted emotion, so I’ll just say that I learned from this experience. I’m confident that it won’t happen again.
Whenever a pair of boots is staring me in the face and my credit card is burning a hole in my pocket, I’ll remember this:
I’d much rather be barefoot on a beach with real money in my pocket and nothing tying me down.