Debt Free

It hasn't happened quite yet, but I'm about to become debt-free again.

I've lived most of my life without carrying any signficant debt. I borrowed money the first time I bought a car, and I've had a credit card since my last semester in college, but I paid the car loan off as soon as I could, and except for several "damn, I forgot to mail the check" incidents, I've always paid off the full balance on the credit card every month. I never charge anything that I don't already have the money to pay for, or at least I know I'll have it next month when the balance on the card comes due.

That all went to hell last year. I'd been working less than full-time and had gone back to college, so every dollar coming in was being spent, and my savings balance had been shrinking steadily. Then I got laid off (again), and living on unemployment benefits for nearly a year completely emptied the savings account. I had to get a student loan and borrow money from my parents to finish that last year of school. I also did something kinda foolish. When I finally got a job offer, I bought a new computer (my first in several years) on credit, figuring I'd be able to pay it off before long. Except that job sucked, the boss was incompetent and a homophobe as well, and for my own sanity I had to take a lesser-paying job to get out of there. I like the new job, but it doesn't pay enough to easily pay off all that debt. I've been struggling a bit just to keep making the minimum payments on it.

The "good news" - really more of a silver lining - is that when my grandmother died, she left me with some money. Not a lot, but enough to pay off those debts, with a little bit left over. It'll be a few weeks for all the paperwork to happen, but then I'll be free and clear.

The leftover cash will be nice, because it means I'll be able to put enough in my bank account so that I won't have to worry about cashflow on a week-to-week basis. I know a lot of people have to live this way all the time, but I'm not used to having to juggle expenses and time purchases based on which week I get paid and what bills are due at that time of the month. Living paycheck-to-paycheck sucks.

I used to look at people who lived that way with a bit of scorn. Now having been in their shoes I'm a bit more sympathetic. But not 100%. For a lot of people it's no one's fault but their own. If they get a little extra cash, they spend it on whatever catches their eye. This time of year people across the country are getting tax refunds, and often blowing it all at once as if it were some kind of free birthday gift from the government. But it's really their own money, which the IRS has been holding for them, as if their kindly Uncle Sam were trying to get them to save. They've been too well-trained as good little consumers.

My situation has made me more sympathetic to people who get stuck in that situation because of things they had no control over. Getting laid off is just one way. Any kind of unexpected expense can do it. I've read that most people in the U.S. are just one major illness away from bankruptcy. Even if they have insurance, it probably won't cover enough of their expenses to keep them financially solvent. Of course the Republicans are currently trying to make it impossible for economic victims to declare bankruptcy, as if - like abortion as birth control - it was just being willfully abused as a way to pay off their extravagant credit card debts. More likely it's people who either got into trouble because of some personal financial disaster, or got suckered into debt by credit cards egging them on to spend beyond their means.

I've managed to avoid building up any debt on my one credit card. One month recently I did use a check which charged to my credit account, so I could pay my health insurance premium on time, and the fees and interest just for that were ridiculous. If I hadn't had the cash a few weeks later to pay it off, it just would've compounded, and I'd be stuck. They keep sending me these checks, enticing me to spend more at their obscene interest rates. My credit limit has been raised over and over, to a level that's about equal to my current after-tax income for an entire year. If I used that much credit, I would literally never be able to pay it off.

There's only one reason that I can see that I'd be willing to go back into debt for: buying a house. If not for losing my job and going back to school 8 years ago, I probably would have done that by now. But even though they're usually good, safe investments, buying a house costs an obscene amount of money, and I'm a bit debt-shy right now.

Instead I'm going to use my new-found financial freedom to relax a very little bit on buying stuff that I want, like maybe a wireless network adapter for my iBook, or a backpacking vacation up north. But I won't be making any ongoing lifestyle changes, because this isn't an ongoing income. It's a one-time thing, so I'll keep saving my pennies for a rainy day. Because if I've learned anything in life, it's that there will be rainy days.