23 September 2013

Debt. AKA the really vulnerable blog post.

At Problogger (I know, lately all of my blog posts begin with that sentence - it's just because I was SO inspired!), Darren Rowse and other guest speakers like Andrea from Fox in Flats and Caz from Y Travel Blog talked of being brave and publishing a post that reveals something really personal about yourself - these posts showing your vulnerability will mean the most to readers, because its likely they will identify with what you've written. I write about quite personal stuff here, with boundaries. I've written about love, grief, death, sex, fandom and pain. I called my Mum on Saturday night and told her that I'm finally writing a blog post about my former bad financial habits. It felt cathartic to do so. And maybe one of you readers will identify with what I've written.


People only talk about money when they're doing well with it. Good debts like a house, investments or a lottery win. No one talks about when things get tough and they're receiving a final demand notice for their electricity bill or when their mother gets a call to follow up why her daughter's store credit card hadn't been paid off. That was my electricity bill and my mother receiving a letter from a debt collector for my debts, maybe six or seven years ago. Being bad with money is shameful, guilt ridden and a stain on a seemingly perfect life.

I came across a young woman in her early 20s, showcasing her latest purchases, proudly announcing that she has no financial control. This worried me - because I've been there. I was that 21, 22, 23, 24 year old. I wanted to tell her how dangerous her habits were - that they were nothing to be proud of or laugh off.

It started with that pesky 12 month interest free payment plan for my first computer in September 2003. Who knew no monthly payments doesn't actually mean NO PAYMENTS?! The life of the debt was longer than the life of that computer. And then there was a bank credit card or two, and some bills - phone bills, electricity and gas bills - that I ignored and went shopping for clothes instead. I thought the bills would go away. But they didn't.

Getting into debt was a bit like gambling, I guess. I'd shop, I'd ignore the bills, and I'd get some instant gratification out of the purchase of a new dress or DVD. I'd get a rush, shopping was a hobby, and I'd do it regularly. Maybe it was loneliness, or unhappiness with my situation at the time, and I think it had a lot to do with clothing aspiration through reading a fashion forum. My purchases were nothing lavish, no brand names - but they just added up, and spending frivolously came before the bills. I wasn't in debt a huge amount - maybe $3000 or $4000 in total - but I was drowning. I'd be awake at night worried how I would pay debts off, I'd worry that I couldn't afford the things I really needed - food and my tablets and creams.

And then my Mum found out. That was scarier than the knock on the door from a debt collector. But having someone in my life know my situation was a relief. Mum didn't have to rescue me, but she did. She paid off my debts - and I paid her back - as much as I was able to afford each pay. It took more than a year to do. At the time when Mum found out I was in trouble, I called Lifeline to talk things through. And I asked one of my best friends - an accountant - to draw up an budget for me.

That budget was drawn up about six years ago - and I still stick to a similar budget now, even though my wage has increased. At the time, I also made sure I scheduled all of my bills via direct debit so I didn't have to think about them. I pay off a little of my gas and electricity each pay day, so I don't deal with a big quarterly bill. (Once my electricity was out when I arrived home at night, and I called the energy company to check if there was a local fault or a problem with my account - and they said I was in credit by $600! Six hundred dollars!! That would never have been the case in 2006!)

I haven't given a house purchase much thought, because the reality is, housing prices are too high for me to afford. But I know that my credit rating will be tarnished by my need for a quick splurge at the shops one lonely Saturday afternoon when I was in my early-mid 20s.

In the four years, since paying off those debts, I've improved with money and bills by a thousand percent:

I am a secondary credit card holder with my Mum, and I pay off my credit card by the end of the month if I use it (and she reminds me if I haven't!).

I use my credit card for online purchases like domestic flights, accommodation and bulk concert tickets - but they're rare purchases. I occasionally use my credit card for in-store purchases like my new fridge last month or my MacBook in 2010, but I make sure I have the money in the bank to pay those purchases off right away or forecast how long it may take to pay them off before buying them. I use my Visa and MasterCard debit cards (above) for most online purchases and all of my everyday in-store purchases.

I schedule all my bills so they're being paid off by direct debit each pay. I pay a little of my utilities and insurance off this way so they're more manageable.

Shopping is no longer a hobby. But I don't feel bad when I spend the money that I've allocated myself to spend on fun stuff. (I bought a few lovely things on the Gold Coast, and the money I had left over was out straight back into my savings account.) I've also cut down on reading magazines that make me want to shop (ironically, even though I read Shop Til You Drop mag each month!) and spend very little time on the fashion forums. I don't aspire to dress like others now. I save for a purchase and use lay-by on occasion (I bought my new quilt and a dress on lay-by).

I talk about money now - at least to my Mum and accountant friend. I tell them how much I've got saved up. And I admit - to myself - when I can't afford to do spend money or do something that is out of my budget.

I've got some savings. All of the money I get for writing and speaking is paid directly into a high interest savings account that is not linked to my debit card or internet banking, and I put a portion of my day job pay into this account each fortnight. I have another online savings account that I can access for spare money if I need it. Sometimes I feel like I'm still skating on thin ice with my every day spendings account, but I've always got a buffer. And I make savings goals - I see that holiday that is 30 March 2014, and I know I must save for it.

I was so proud to have $8000 in savings a few weeks ago. I was even prouder to be able to pay for my entire previous trip overseas with my own money (I set myself little goals - buying tickets for BlogHer, then the airfares, then accommodation and finally saving up my spending money). And I paid for the airline tickets for my next trip up front.

I may not be rich but I've got my shit together with my money and bills. I used to be scared to look at my bank account and to open bills, and now I am not. And it feels so bloody good.

To that girl in her early 20s, who's proud of her lack of financial control and credit card adventures - I urge you to be careful. Those clothes may look great on you and make you squeal and sigh when you unwrap them at home. Shopping may be a social, adrenaline filled activity. But that credit card bill and possible future debt might not bring you so much joy - instead it may lead to guilt, worry and sadness, spiralling into further debt, fearing the debt collector, getting a bad credit rating and not being able to afford the essentials - all making you wonder whether that new dress was even worth it?. The clothes I got into debt for were in fashion for one season. My debt lasted longer.

Don't be proud of being financially out of control. Be proud of saving and paying those bills and that credit card off. Be proud of being able to pay for your purchases up front.

If you're seeking financial counselling, visit Money Smart - the Australian government website.

If you need to talk to someone, call Lifeline on 13 11 14.



  1. Yep - been there, done that...

    Early on in my relationship with R, I managed to get myself into CC debt for about $10,000... it wasn't a good situation to be in, and placed a big strain on our relationship...

    But, as we always do, we talked it through and worked on a plan to pay off the debt...

    More than ten years later and our financial position is the complete opposite... we're really sensible with money and have a lot of savings and healthy super accounts...

    I think for me - having grown up below the poverty line - having access to seemingly unlimited credit was a dangerous thing - it took me getting into trouble to understand the consequences... now I'm the opposite - I'm one of the most financially responsible people I know.

  2. Thank you for writing with such honesty. You've written from such a personal perspective. I know this post will help many.

    SSG xxx

  3. Hi! Found your post over on BLM's facebook page. This is definitely a MUST read for young people, old people as well, for that matter!Lol Thank you for your transparency, hopefully it will inspire others. Some people have short term vision, they never see the future results of the decisions they make today. We, as a society must learn how to discipline ourselves when it comes to our finances, otherwise we'll find ourselves ALWAYS indebted to someone. Thanks so much for sharing...have a wonderful evening!
    Michell @Prowess and Pearls

  4. Great post Carly. I'm lucky that my parents taught me how to save from an early age so I've never found myself in much debt - probably helps that I never got a credit card either!
    I wonder if financial literacy should be taught at schools to make sure everyone understands how to budget and save, how credit ratings work and the like.
    Thanks for sharing!

  5. Hi Carly, this is a fantastic post, so honest and one that so many people can relate to, myself included! Congrats on getting your finances together, its tough task and you should be ultra proud of yourself. Would you mind if I shared a link to your post with my Money Mummy readers? I think a lot of people would benefit and get inspiration from your story. Thanks again for a great read... Shelley from Money Mummy (popping in from Blog Chicks)

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  7. My dear Carly, thanks for this.
    Regarding the comfort shopping, I can relate to that....."you can never have enough of what you don't want or need".
    I have curtailed my comfort shopping (and eating), and, more importantly, I have learned other more effective and less expensive ways to nurture myself. We all need comfort.
    I have also set up an automatic savings plan! I don't have a budget per se but I try and do things as economically as I can while still enjoying good things. Plus I only buy something if I love it.

  8. Oh I know this one too well, it wasn't until I moved in with my husband to be and could put the previous money allocated to rent in a savings account that I got my debt under control. I had the debt collectors too. I still shop for recreation but hardly actually buy anything these days and I find it quite exhausting! These days I get my fix in Op-Hops mostly and if I do go on a shopping spree would rarely spend more than $20. I now use credit cards as a handy interest free loan (paying the balance off each month). I don't try to keep up with any kind of consumer product trend any more, it seems that fashions are just a way top get more money out of you by creating an artificial need.

  9. Hmmm, I have been here too.

    It's so easy, TOO EASY, to get credit. And your marks on your credit history will be gone by now, I would say Carly.

    I too got to a point of debt collector calls, and threats. So scary. I was travelling, and avoiding the reality of the debts piling up.

    I returned home, got a steady plan in my head, and paid it off. Took ages!
    And had been going so well, since, resisting all lines of credit.
    But then I was ready, and had saved, for travel again. And you need a credit card for loads of things....and for "just in case". Now I have a smaller debt I am working on paying off again. Nothing of the previous scary size though. But still.

    It's just so easy to get trapped again! I was doing really well with it, with a high paying job and cheap living expenses. But life got boring there, and I made decisions to get out of a job that didn't make me happy...still need to readjust to my lower level of finances, and to step down living the good life accordingly...

    I hate missing out on things, and things I want when I have worked hard to get to a goal, because of money!

    A work in progress!

  10. Thank you for your comments and sharing your stories. It made me feel less alone, less guilty.

  11. Thank you for this post. I really appreciate it<3

  12. Thanks for sharing Carly. I think many people will relate and have been there themselves. I actually think your debt of $4,000 wasn't that bad compared to what it could have been (similar to past debts of mine, I guess), but I think you pulled yourself up and turned things around before it got worse. You've given some excellent advice here. Being sensible and disciplined does not sound like much fun, but big debts are most un-fun indeed.

  13. Hey Carly.

    I've been meaning to write about my financial problems for ages but somehow haven't put it out there. I've mentioned several times that I've replaced my drug and alcohol addictions with shopping and food, without giving the detail.

    In the height of my breakdown in 2007 I was over GBP17,000 in debt! When I came back to Australia a broken mess that figure amounted to close to $30,000. My Aussie credit union paid it off, giving me a personal loan to pay off over five years. But.... no one took the UK credit card off me!

    I descended further into addiction/depression and spent a GBP5000 of it again! My parents had kicked me out of home and I was living with the father of my son who was also a drug/alcohol addict. I got a 40 month interest free loan to buy a bed, TV, chest of drawers which also came with a GE Finance credit card with $7,000 on it at almost 30% interest!

    Can you see where this is heading?

    Basically I spent the lot!

    Then my son was born, the loser ex-boyfriend was gone and I was back living with my parents. I was still extremely depressed and unwell suffering postpartum thyroid disease. I accepted a redundancy from the investment bank I'd been working at for seven years. I got a payout of about $36,000!

    Huge money!

    Paid off all my debts. Yet no one took the credit cards off me. Ok, so I am an adult and should be responsible for my own spending. But. I have a disease. I am an addict pure and simple. I was under the care of my parents who saw the parcels being delivered almost daily. But they said nothing.

    Finally there was no more credit. I'd even been drawing down cash off the personal loan I'd already paid huge chunks off. I was completely out of control. It was just like using drugs or getting drunk. Shopping is an escape! Shopping for clothes and other things creates a fantasy that is unfortunately never realised.

    The credit union I bank with is the same one all my family bank with. I tried to get another consolidation loan to sort out the mess and the bank manager said no, I had to get my dad involved. The bank manager was lovely because he's known our family for well over 30 years.

    In the end my dad had to pay everything off, taking out a loan off one of his mortgages. I have about $18,000 left to pay off but at least the interest rate is so low!

    I wish I could be like you are now but still I struggle. I want, want, want. Always looking for that item of clothing that will make me feel better about who I am. Maybe that's why I'm writing this from a psychiatric hospital right now.

    Thanks for writing this post. I don't need to write this on my on blog now. My parents subscribe there!


  14. Hi Carly,
    You might find this post I published on my bog an interesting read. It provides a different perspective.


  15. Great post and so relevant for our generation. I've got nearly $13k in savings from this year thus far and the boy is almost up to $30k because we both want to purchase a property and not service someone's mortgage (he lives rent free at boarding school and i'm on v. low rent with the teacher housing in western nsw). Both of us started to save as soon as we landed full time permanent teaching jobs.
    That said, before I house buy, I need to get a newsih car -- but that will be a late model secondhand paid outright which I am saving for.

    Many of my girlfriends went through periods of stressful credit card debt -- so I've seen some of the darkside and I still don't have a credit card for that reason.


  16. Great and honest discussion, good on you for sharing. I have also had my cold-water-in-the-face moment with my spending and it definitely takes that kind of event to make you change your ways - but still, I do struggle not to buy this little thing or get take away, etc. Good luck, and well done!

  17. All I can say is well done to you for taking back control. I've never been in serious debt and I know that's because I am by nature very cautious with risk. My mortgage is debt enough for me! But how well I know the "look the other way" approach for other bad habits that I have. Our capacity for denial (for anything but SELF-denial!) is very scary indeed. x

  18. Such an important thing to be open about Carly. I had a LOT of debt when I left my last marriage (it actually won't be paid out until the end of next month) and a lot of it was created because I was buying things to deal with how unhappy I was.
    I now use a lot of the strategies you do, although I don't have a credit card as I don't trust myself and it's a much more satisfying way to live.


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