The Worst and Best Financial Decision I Made in My Twenties

I was at Lambeau Field for a Packer’s game when I signed up for my first credit card. Visa lured me in with the promise of a Packers’ blanket. This shouldn’t have worked since I am not even a Packer’s fan. However, a buddy and I bit anyway, and pretty soon I was justifying all kinds of crazy purchases: travel, books I still haven’t read, professional sporting events. My bill peaked around $4,000, which might be low to some people, but I didn’t pay it off until my mid-twenties. The real problem was that it put me in a post-college financial hole from which I am still recovering.

At times, I have simply “managed” my credit by diligently paying minimum payments. At best, the numbers stayed stagnant, and at worst, they grew. That worked great for my credit-card companies, student-loan companies, and car-loan company. I’m sure they loved every second of it. Creditors aren’t stupid, and they know they’ll make more money the longer we pay minimum payments.

At some point, it occurred to me that I was making no progress toward my financial goals. Believe it or not, I do not wish to be broke my entire life, and on my best days, I don’t let the creeping despair dominate my financial thinking. At some point it occurred to me (it should so obvious, right?) to ignore the minimum payments. So now my approach is this: when I get an amount of money, no matter how large or small, I make payments toward my debts. Which necessarily means I don’t pay my bills by automatic deductions because that takes my brain out of my financial life. That way is easy, yes, but it can also be passive. More often than not, I try to err on the side of aggressiveness. If the best I can do is a minimum payment, so be it. But I try to pay more. This way of doing things also builds in me a certain consciousness about exactly how much money I have, how much money I owe, and what expenses are coming up.

How has this habit worked out for me? Well, during my twenties I paid off more than $30,000, and that was with a maximum salary of $42,000 a year. I hit that mark once, and for the past five years my income level has been less than half of that. I drive a car that is paid off, and my bank account deposits into a Roth IRA each month. Going through three rounds of school has been a hit for sure, and so I have missed my “debt-less by 30” goal. But on my best days, I’ll take where I am, and I’m hopeful that my situation will drastically improve in my thirties.

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