debt psychology... sort of

debtkid wrote a post called the #1 reason you can't get out of debt. he says that the real reason that people are not able to pay off their debt is because they don't want to badly enough. i love his post and i totally agree with him.

i have been struggling with credit card debt since may 2002. before that, i had a little here and there (a few hundred dollars some months), but was mostly able to pay it off after a couple months. what happened is that i graduated from college, took a road trip, and then was not able to find a job for several months. so i lived off my credit cards.

once i went down that path, it was so easy to just keep going. any time i wanted something that i could not immediately afford, i would put it on my credit cards. as i talked about before, three years in new york did not help my cause since that city is pretty much the epicenter of impulsive consumerism. anything you want is available any time you want it, as long as you are willing to slide a card across the table.

i did not even spend my money on anything that interesting... it was mostly restaurant meals, drinks in bars, flights to other fun cities, and some clothes and shoes here and there. but it was just so much temptation, and given that i was at a depressed, miserable point in my life (law school), i rationalized that i needed to maximize my fun time and "reward" myself with expensive meals and drinks.

i have had a few debt emergencies pretty much on an every six month schedule over the past couple of years. back in july, i freaked out when i realized i had -$19 in my checking account and was not getting paid for another two days. in december 2007, i reached the end of a month of partying and visiting people and buying gifts and was not sure how i was going to pay my january bills. i have had my credit card rejected in stores countless times for being over the limit, and have missed numerous payments.

for some reason, none of this really triggered a change in my brain though. that came this past december when i got a call from one of my credit card companies saying i had missed 2 months of payments. i talked them out of charging me but the next day the conversation haunted me. i kept hearing myself in my head and how ridiculous i sounded arguing about how it was "no big deal" that i was over my $2500 limit and "i do this almost every month" and "it's not fair of you guys to start charging me now."

it got to the point over the course of the day that i could not stop thinking about the conversation and i was compelled to look at my credit card statements. prior to that day, i had been throwing all credit card statements from at least the past year and a half into a box in my sun room, unopened. i would just take care of everything online and didn't look at the paper statements.

once i started opening them, i saw that the credit card had progressively been increasing my APR from 7.99% to 31.49% every month over the past year and a half. then i had what i can only describe as an actual panic attack. i have never had a panic attack before, so i don't really know for sure what they are like. but i was sweating, my heart was racing, i could hardly breathe and felt like i was suffocating, and my arms and hands were shaking. i did not know what to do so i just started calling my friends one after another and telling them about my financial mess.

i am lucky and have amazing friends who all promised to help me and did not freak out on me. but the thing is, ever since that day, everything has changed for me. for years i was convinced that i would just have credit card debt forever, that it was not a big deal, and that it was completely impossible for me to pay off. meanwhile, i would go out to eat almost daily, buy the most expensive specialty products in the grocery store, go on trips every other month or so, and occasionally spend hundreds of dollars on clothes i "needed" for work.

a lot of times when i talk to people about my new budget and the changes i am making in my financial situation, they will be like "well it has only been a few weeks now." i know that i have a long road ahead of me (3.5 years to pay off just the credit cards, according to my current plan) and that i can't expect that i can just change my mind about what i am doing and expect it to be easy after that.

but what i feel like many people do not understand is that there has been a fundamental and irreversible change in me. i feel like for the first time in my life, i am taking full responsibility for my financial situation and i am completely committed to paying off my debt and changing my lifestyle and choices. that call to my credit card company was a wake up call and a turning point, and i do not think there is any way i can go back to making the bad choices i made before with my money because i no longer believe that those choices are right for me.

debtkid says, "Getting out of debt requires sacrifice, but if your mind is right, those sacrifices become almost enjoyable, instead of unbearable." that is really what i think the difference is for me. i love that i am taking care of myself financially and i think it is fun to figure out where i am going to spend my fun money each week. every day when i get home from work, the first thing i do is enter my expenses into my spreadsheet.

i love seeing myself spending less than i planned to on things and i am so motivated about reaching my goal. and the fact that i am finding this process to be so fun and rewarding is how i know that i really am committed to getting myself out of debt.