Yes, I have a pretty small student loan that I've been paying faithfully since graduation. What I'm talking about is the credit card debt I let pile up when I got sick. It turned out that I couldn't afford all of the doctor's visits, scans, and a hospital stay. I bought new clothes and things that made me feel happy when nothing in life seemed right.* Before I knew it I was in over my head and I just figured that I would pay it off when things calmed down. I learned really quickly that life doesn't calm down... First there were doctor's co-pays, perscription co-pays, medical bills for my insurance deductible, then came new tires, new brakes, and finally vet bills when Brody was sick.
In a perfect month, without any extra health, vet, auto or other costs, I have money to put into savings and a little bit extra. But life is far from perfect, and once you spend your savings it seems like it takes for-ev-er to build it back up again. I wish I could do the last two years all over again. (Oh wait, no..I really don't.) But do I wish would have heard it in a way that mattered to me before I got into this mess. I was arrogant and thought I knew better than all of the smart people who had ever given me advice about money. I didn't think credit card debt was something that could happen to me. (Does this prove any cliche about being young?) So here it is, for myself to never forget, and anyone this might benefit:
5 Money Lessons I've Learned
1. Sometimes you can't afford even the basics
- Just because I had a job, health insurance and was over 21 didn't mean I could do it all.
- I thought since I had medical bills, I had to pay for them right away. So I would take out my credit card and pay each bill. WRONG! if you can't afford to pay for them with cash, do not put it on a credit card. I didn't learn this until I maxed out a credit card and then wondered how to pay the bills that kept coming in the mail.
- Food might be necessary to live, but if you can't afford it, find a way to get it without going into debt. I rationalized my way into using my credit card for "healthy" food, into stocking up on things because they were cheap, into eating out because I couldn't wait until I got home... There are a lot of other options than the way I did it.
2. Ask for help
- I didn't tell my family how much being sick was costing me financially. I figured I should be able to pay for it all since I had insurance and a full time job. I'm sure they would have had lots of support and advice to give had I asked for it. Don't try to do it all on your own!
3. Hospitals and healthcare companies will work out payment plans with you
- I had no idea this existed for every day people (not just for those in true poverty situations). Even if you are able to pay, but it will make money tight for you, call and set up a payment plan. Credit card companies charge interest, health care providers do not.
- Call as soon as you get the bill. I let several hundred dollars pile up in medical bills while I was stressing over how I could pay for them. By the time I called, several of the bills were months old and headed to collections.
- The biggest bill I had was almost $2,000. I had no choice but to call the hospital and find out what my options were. I was so surprised, there were options and the person on the phone was not condemning. I set up a manageable plan to pay $200 a month until it was gone.
- If you're buying something now because it's on sale, but can't afford it without a credit card- it's really not on sale. I'm still learning this one. A good deal, is so hard to resist. My idea of a "good deal" is changing.
5. The bad financial choices you make will catch up to you (quickly)
- Even if your finances don't matter to you today, they will matter in the future. I thought I would have more time before I would have to deal with it all, but the bills come fast and the debt piles up.
- If you can't afford it, don't buy it. This might be common sense, but I didn't think it applied to me when I was spending money I didn't have.
*I knew then that I was looking for comfort and peace in the wrong place, but it still didn't change the fact that buying a new pair of shoes or craft supplies made me forget how stinky life was. Sometimes I think that doing something special for yourself, like buying a new pair of shoes, can be a great reward, but I took it too far. Now I'm paying the price. Now every time I pay my bills and have little left over I'm reminded that God is my sustainer. He is the one who will give me sweet comfort, lasting joy and the strength to keep moving through life. (take a look at Psalm 46:1 and Mark 6:25-34)
Some links to bloggers who talk about money and wisely using it:
Christian Personal Finance
Get Rich Slowly
My Coupon Teacher