How cutting up a credit card started the path to paying off debt.

I said goodbye to a few old frenemies today. My Target RedCard, Southwest Visa and American Express credit cards.

We have a lot of credit card debt accounts but these three all had a special place in my wallet, which is why I needed to have a proper burial for them.

The Target RedCard

Oh how Target has been a sanctuary for my tired, broken heart over the years. I think so many of us can relate to this, but maybe it isn’t Target for you. Maybe it’s Amazon with his quick ease and endless suggestions. Or maybe one of the Maxx family of stores; TJ himself, Marshalls or HomeGoods with their slashed prices and mile-long checkout lines of “obviously I NEED that candle, water bottle and roll of pretty dog poop bags”. These companies, and thousands others like it, have on-staff psychologists that their only job is to manipulate our generation of women in to thinking we NEED to have this stuff to soothe the yearnings for fitting in and keeping up.

That was Target for me and my RedCard made it possible.

• He had a relatively low credit limit ($3k) so I never felt overwhelmed by a $300+ debt purchase on a particularly sad/happy/bored/celebratory/angry day.
• My daughter and I bonded at Target over Starbucks lattes and cake pops and all those cute baby, toddler and now Tween girl clothes.
• Offices, bedrooms, kitchens and businesses have been outfitted on that Red[Debt]Card.
• Christmas presents were bought in one fell swoop on December 23rd every single year since our first baby was born. (If that doesn’t suck the romance and tradition out of Christmas, I don’t know what does.)
• I justified candles and picture frames and rugs and coffee mugs and water bottles and baskets and luggage and dumbbells and sports bras all in the name of self-care.

The Southwest Airlines Visa

This cutting was less of a ceremony but I still had to mourn what it stood for: VACATION. When our kids were little we visited my dad in Florida yearly so it only made sense to have a credit card that gave us points to pay for said airline tickets. If only that’s what it did 🤦‍♀️ . While we put a pretty hefty balance on him, he never really delivered. MAYBE we got one free ticket in the 15 years we’ve had it.

The card itself represented permission to escape for me. Every few months my life would get so overwhelming, mainly because I was hungover and sick, that I would look for any way to escape my life. Pretty places around the globe via Instagram would scratch the itch and an airline ticket and hotel would go right on to the debt balance. Now that I no longer need to escape my life, I have no need for a card that ‘helped’ me do that.

Oh, American Express. You lied.

The approval from the American Express company told me I had made it in the business world. The only thing I really got approved for was a 30% interest rate and a shame spiral when I couldn’t pay the balance in full one month. I thought the AMEX police would come knocking at my door demanding payment because ‘you have to pay it off every month.’ Not true. He likes his interest money just like the rest of them. He just likes to make you feel REAL bad for it.

The only real grief I hold on to here is false. I see him for what he is now, just the dick from high school that now dresses up real nice and tells you how cool he is and how uncool you are. Barf.

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I won’t say good riddance; they all taught me something about my limiting beliefs, how easily and foolishly we can be manipulated in to thinking these cards represent something more than what they do: a locked cell of debt that we actually hold the key to.

To be totally honest I held that RedCard in my hand for almost a full five minutes while my head and heart flip-flopped between cutting it and keeping it. The arguments for keeping it kept popping up like a dirty whack-a-mole game at ShowBiz:

• But what about Christmas?
• What if we need something from Target?
• Can we never go to Target again?
  
  I whacked those bastards in to submission every time:
  
• Christmas will still come. It’s time for a new tradition anyway.
• If we need something from Target, I will go and pay for it with cash or on my debit card. My guess is we won’t.
• Of course we can still go to Target, just not to soothe my soul.

Financial freedom is the way I care for myself now.

The down and dirty debt numbers.

Money is weird. It doesn’t seem like it should be. At its simplest form, money is a tool of exchange used to facilitate transactions. It represents value and allows us to trade goods and services without the need for direct bartering. Debt is even weirder.

Simple, right? 🤦‍♀️

Money can seem pretty weird to folks for a bunch of reasons. Sometimes it’s all tied up with feelings, like stress or even shame, about our finances and what we can or can’t afford. Plus, a lot of us never really got the lowdown on how money works – like budgeting or investing – so it can feel like navigating a maze blindfolded. Then there’s the whole crazy system of banks, loans, and interest rates, which can make your head spin if you’re not into all that financial jargon. And let’s not forget about the inequality stuff – seeing some folks swimming in cash while others struggle can leave you scratching your head. Plus, our culture’s always pushing us to spend, spend, spend, which can lead to some serious money stress. And don’t get me started on the rollercoaster of economic ups and downs – that uncertainty can really mess with your head. So yeah, money can be a real head-scratcher, but with a little know-how and a healthy attitude, we can all get a grip on our finances and maybe even have a little fun with it along the way.

I’m going to do something that society as whole thinks is taboo: talk about money. And even more, I’m going to share with you my numbers. Why? For one, I know that holding myself accountable is the only way I get things done. It’s the way I operate, society be damned. Does it look like airing my dirty laundry? I suppose. I can tell you I’d rather be out of this cavern of debt MORE THAN I care what people are going to think about HOW I’m doing it.

Soon you’ll find a spreadsheet of a bunch of numbers and interest rates. I went in to every single account we owe money on, found the balance and interest rate, put it in to my Debt Destroyer + Budget Boss spreadsheet and away I went.

Drowning in Debt Information.

There is so much information about money out there. Websites, blogs, podcasts, books, articles, social media accounts. Just like diets, every single school of thought has the potential to work, if there’s follow through. I have read and listened and received enough information for a lifetime but like they say, “If information was all it took, we’d all be thin and rich.” So, a couple of things to note about MY experience and the work ahead:

1. Good Debt vs Bad Debt. I understand the difference, however, in my party animal brain it all makes me FEEL icky.
2. Business Debt. We own a number of small businesses so we have more debt than the average bear. I think that’s supposed to make me feel better. It doesn’t.
3. Shock & Awe. Believe me when I tell you that I know how big these numbers are. It took me the equivalent of breathing in to a paper bag for a few days to look after I was done. But that’s the thing with authenticity and honesty with yourself; it’s fucking scary and sad and disappointing and regretful and desperate. But when we pull all of those covers off, the real work can begin. I’m over the shame of it but it might make you feel better about your situation and I’m cool with that.
4. Budgets vs. Spending Plans. One of the things that I have avoided during my 35+ years making money is telling it where to go. It’s always just been the party girl doing whatever she wants, whenever she wants. Well, this party girl is tired. I listen to a lot of podcasts and The Rachel Cruze Show (Dave Ramsey’s daughter) is one of my favorites. She simply changed the term budget to spending plan and that’s all it took for me to change my mindset. I’m not depriving myself of things, just doing them differently.
5. Technology. There are thousands of apps and tools out there. I’ve tried Mint, EveryDollar, YNAB, Nerd Wallet and Monarch and the only thing I learned from all of them is that they don’t work FOR ME. I spent so much time and energy filling them out only to leave them like a bunch of abandoned socks without their matches in the dryer. I’ve always turned my nose up at spreadsheets, I am right-brained to the hilt, BUT I tried my hand at learning the magic of them, worked hard to get it right and fell head over heels into a financial love affair with Google Sheets. (Those that know me reading this, you can pick your bottom jaws up off the floor now.)
6. Time. My husband and I were chatting about this over lunch the other day (we went out for Mexican…I’m not a monster) and I told him if we pay what we’re paying now every month until 2031 we will be completely debt-free; first and second mortgages (house), commercial buildings, cars, medical bills, credit cards…everything. That’s 7 years. I’ll be 52, he’ll only be 49. That’s retirement speak right there. And when you see how much we’re paying monthly in payments, you’ll understand what I mean. This is why I’m excited, motivated and grateful I took my head out of the sand. I also understand that while 7 years doesn’t sound like a long time, that’s 2555 days of consistent work and dedication. Are you going to hang out with me for the next 2500 days?

Here’s the down and dirty and this might annoy some of you, but yes, I’m going to make you sign up for an email list to get it. Not because I’m about to sell to you or send you a bunch of shit you don’t want, but because there are some trolls out here and I have no interest in giving personal information to people that aren’t actually interested. I promise the first email you get will have all my down and dirty digits.

I’ve only been in debt for about 28 years.

Considering I’m almost 46 that’s kind of a long time.

Ever since I could make money, I spent beyond my means. As a hard worker, I could never really understand why I was constantly behind on bills; I should have been rolling in it.

I’ve had many close calls when it comes to being broke but then something crazy happens; a refund check from the dentist would show up, an early birthday check from my dad, a long-lost insurance reimbursement. I have the Universe to thank for my life just always ‘working out’. Don’t get me wrong, I love it that way, but it’s risky.

AND, I’ve had enough almost-rock-bottoms to know that when it manifests physically in my body or infiltrates in to my relationships, I know it’s time to pay attention. This is exactly how I got sober; it wasn’t rock bottom but I skipped along it for a while.

And so, now I’m here on Day 1 of a Debt Diary. Let’s get mighty real here because being totally honest is really the only way I know how to bring the monster out from under the bed. That monster for me, and probably most of us with self-medicating and/or money issues, is shame. There’s no doubt I have made money mistakes to get me to where I am today however, that IS what they are. Mistakes.

Mis-takes. We get re-takes.

I am going to share all the numbers and my plan but first I’ll give you a little history.

I am the daughter of a financial planner. In my dad’s defense, he tried to teach me all the right ways to spend and save with all of his yellow legal pads, four of the same sentences he said over and over (that I mostly rolled my eyes at), a demonstration of compound interest, the percentages of each paycheck that should be going to savings, bills, housing and investments, etc. He also led by example and can do all the things he wants because he is truly financially free.

I thought I knew better than him.

I didn’t.

As soon as I could (at 17) I moved in to my first apartment with a friend working two jobs and still ended up not being able to cover rent. I got behind, had to crawl to daddy to bail me out of a $740 back rent issue and basically lost a friendship over spending more than I made. Fast forward a few years and I left for Army National Guard Basic training where I left my mom with all my bills and a plea to help me pay off $5000 worth of credit card debt and a real-bad vacuum purchase. I came home and married the man of my dreams who had $20k in the bank and promised me a wrap-around porch. I thought all my money woes were gone…somebody to save and take care of me. Yay.

Wrong.

Our newly-wedded bliss was sprinkled with the excitement of entrepreneurship and big commission checks only to be tainted by a $30k IRS tax bill we didn’t save for and $20k worth of credit card debt that bought what-I-don’t-know. (This was another one of those yellow legal pad lessons I ignored: save 30% for taxes when you’re self-employed. Whoops.) We had to crawl to my in-laws this time and graciously they bailed us out. And then, we bought a house high and took a bath on it in 2008. This time my in-laws bailed us out again by letting us live in their basement for two and a half years with our 6-week old son until that house sold for $30k less than we bought it for. But Dale had a good job and we had few bills so I thought we could get ahead a little.

Not so much.

(Geez. This is difficult to write out. I’m starting to sweat.)

We finally sold our house, moved in to a modest ranch, put some sweat equity in to it and then did a big remodel borrowing the money for that from my mom. When we sold that house we were able to pay her back and put a down payment on a new house (with a porch). We were pretty stretched but not enough to start paying attention.

It was fine.

Within five years we started a wine bar business which included purchasing a commercial building. The fact that I had the balls to even go to the bank made me pretty proud. The business actually made quite a profit during the pandemic and spending was fun so we bought a coffeeshop business. Both of those things fueled my confidence in business ownership enough to open an ice cream shop/candy store, purchase another commercial building and quit my real job. My husband left his real job and we both became 100% self-employed overnight.

The thing that no one tells you about a service based business like a bar, coffeeshop or ice cream store is that over everything else: staffing, rent, cash flow, product, inventory, customers, all of it, the number one energy and money suck are appliances. Freezers, coolers, blenders, panini makers, beer tappers, dipping coolers, microwaves, soup kettles. And the dishwashers. The fucking dishwashers. In less than 4 years I paid over $20k for new dishwashers.

Guess where all of those purchases went?

Right on to shiny, pretty, platinum-plastic credit cards. And because revenue was high and the construction market was great, I thought we deserved a retreat and I convinced us a little cabin 30 minutes from our house would be another successful business venture (AirBnB). So we tied up a significant amount of cash for the down payment and committed to another monthly payment.

Then we sold a business, got a nice chunk of change and instead of saving it or paying down our debt, we sunk it in to another expansion and remodel. I actually think this was one of our better business/financial decisions and we’ve already seen the fruits of that labor, however, it left us very, very house rich and cash poor. And with inflation at 18% over 3 years, our cash flow stopped flowing.

Cue: construction market slow-down because of the interest rates.

Ironically, my 2024 resolution was to pay attention to our finances. I don’t know if this coming-to-Jesus is because I opened my eyes and it’s been this bad before when I had my head in the sand or it just happened to get this bad while I was watching. Either way, I am actually grateful it worked out the way it did.

About a month ago, I could see in my husband’s eyes that he was scared. He came in to the bedroom and he looked so sad and defeated I actually said out loud, “Do you want me to be worried?” And he said, “I think it’s time.”

Even as I write this I just sighed really loud.

It was the wake up call I needed. I knew I would need a plan of action so I followed the steps below:

1. Called my sister and showed her all of my finances. Everything. I had avoided her help for fear of judgement for too long. She’s been through this, on a smaller scale, but understands the behavior changes that are needed. And she loves me so she just wants me to be happy. I know that now.
2. I wrote down every single thing we owe and since January I have been tracking our spending habits so May will begin a new spending plan (aka budget)
3. We had a serious conversation and decided selling the cabin was the wisest decision for us. We hope to get around $35k back after all taxes and closing costs.
4. I closed out my 401k and a $20k is on the way.
5. We toyed with the idea of asking a parent for another loan to get out from under the extremely high interest rates of the credit cards but in the end, I NEED to do this on my own. Getting bailed out, even if it will save us money or is deemed the “smart” thing to do by society standards, will not solve this issue. I have 14 paragraphs of proof above here. I had to beg my husband to trust me to do this. That was hard. Staying in debt is harder.
6. I started taking intentional action; from the littlest things to the more aggressive. I saw a penny on the floor of our cabin that was just about to be picked up by the Roomba. I stopped it, picked it up and put it on my phone so I could take it home. I took the change cup from my desk and traded it in for bills: $42 that has just been sitting there on my desk. I folded it neatly and in order and put it in my wallet. I started this journal in hopes that putting it out to the world wide web will bring the accountability I need to keep going. We cleaned the cabin, made some repairs and brought personal items home in preparation for listing it this week.
7. I reframed my mindset around self-care. Financial security is one of the values I have been waiting for from someone else almost my entire life. I don’t need to be saved. I’ll be doing the rescuing myself from now on.

Here are the big picture steps you can use to customize your own plan:

1. Continue Open Communication: Maintain open and honest conversations with your support system about your finances. Their support and understanding can be invaluable.
2. Consolidate Your Debts: Consider consolidating your high-interest debts into a lower-interest loan if possible. This can make repayment more manageable and save money on interest over time. Beware that this is not a “bail-out”.
3. Create a Detailed Spending Plan: Utilize the information you’ve gathered from tracking your spending (start tracking now) to create a comprehensive plan until your debt is paid off. Allocate funds for essential expenses and prioritize debt repayment.
4. Utilize Windfall Funds Wisely: If you come in to a big chuck of change, use it wisely.
5. Avoid Further Borrowing: Resist the temptation to seek additional loans, even from family members, to address your debt. Focus on managing your existing debt responsibly and developing healthy financial habits.
6. Embrace Small Wins: Celebrate small victories along the way, such as finding spare change or converting it into bills. Every effort counts towards your goal of financial freedom.
7. Stay Accountable: Journal your progress and share your journey with others for added accountability and support. Consider joining online communities or support groups focused on debt repayment for additional encouragement.
8. Prioritize Self-Care: Remember to prioritize self-care throughout this process. Recognize that financial security is a personal responsibility, and empower yourself to take control of your financial future.
9. Seek Professional Guidance: Consider consulting with a financial advisor or debt counselor for personalized guidance and strategies tailored to your specific situation. They can offer expert advice and help you develop a realistic plan for achieving your financial goals.

By following these steps and remaining committed to your goal, you can gradually work towards becoming debt-free and achieving greater financial stability. Keep believing in yourself and the progress you’ve already made. You’ve got this!

If you’ve made it this far, you’re probably interested in the down and dirty numbers huh? Stay tuned for Day 2.