I am not a very smart brotha. If I was a smart brotha, I would not have buried myself $26,000 in debt in one uninhibited binge spending weekend of ignorance.
Have you ever made it rain?
For those of you that have never made it rain, let me briefly describe it for you: It’s spiritual. Making it rain is a personally transformative experience. This is why I suggest you never start a rainstorm. In my three-decades of life, I have never made a positive decision that involved withdrawing cash from an ATM after 12:01am. Early morning ATM withdraws are a gateway debit to a lifetime of ignorant spending.
When "raining", an action typically experienced best at gentlemen's clubs, each bill cascades through the air like a beautiful Black Swan pirouette before falling tragically to rest in peace from its predestined interpretative dance towards its Final Destination. During the making of rain, "Father Stretch My Hands" plays as a captive audience rejoices around you while greenbacks fall like snowflakes onto the heads, faces, and depending on the club dress code, other exposed areas of epidermis.
Many great philosophers have walked this Earth but only one has managed to sum up my $26,000 quiet storm in one word.
“Sensational.” - Future Hendrix
You might be wondering, “Where did the money come from?”
Well, this year the average college student will graduate with over $37,000 in college loan debt. When I graduated, I had $9,000, mostly allocated to personal credit cards that I acquired for the low price of my soul and a few free T-shirts emblazoned with logos from the various credit card representatives that graced my campus first semester.
How did I get into $9,000 debt in the first place? I honestly have no idea. Given my favorite college activities: drinking, spending irresponsibly, and partying, one must assume my accumulated debt was a result of the lifestyle I had become accustomed to. With only one-fourth the debt of the average student, several banking institutions deemed me worthy of “pre-approved consolidation loans” post-graduation. I didn’t even know what a consolidation loan was, so naturally I applied for the loan with the most attractive marketing and moved on with life.
Imagine my surprise when 3-5 business days later, a check arrived in the mail for $10,000. I think I was supposed to consolidate my three credit cards into one low monthly payment but…
iMADE IT RAIN!
If I wasn’t in a relationship, I would have embraced my inner Lil Wayne by driving around campus to “flirt with the hood rats” and then pop bottles. Instead, being a man of principle and commitment, I took college-BAE on a several hundred dollar shopping spree. We also went to various clubs buying every lavish-colored liquor we could consume before losing consciousness. Because I hadn’t completely spent the $10,000 “blank check,” I did the next rational thing: I went shopping for a new car with rims. I settled upon a used 2002 Toyota Camry for $13,000 on 20s. Ok, they were 16s but I KEPT THEM CLEAN!
I put $2,000 cash towards the down payment. I bought the car at sticker price (without negotiation), because negotiating sticker prices was for brokebois who didn’t have $10,000 in their checking accounts, unlike myself, a baller.
Because I’m the responsible type, I used the remaining consolidation loan to pay off the lesser two of my three credit cards. For those of you keeping track at home: in less than 72 hours I went from $9,000 in debt to about $26,000 and that was before I decided to buy one of those new $3,000 flat screen TVs a few months later for “0% interest.”
Pros: It was the most fun I’ve ever had spending money that wasn’t my own.
Cons: It would take over 7 years to pay off a 72-hour experience. I’d love to tell you that I immediately learned my lesson and this was the last time I made a stupid financial decision.
I don’t want to lie to you, dear friends.
After a few thousand more dollars in debt were tacked on, I found myself living paycheck-to-paycheck fighting back tears as I literally begged a creditor from my knees for another consolidation loan as I teetered on the brink of possible bankruptcy at the age of 25. It took a quarter century for me to become fiscally responsible, but I was forced to make a decision to change. I made a lot of difficult changes over the years but for your benefit I’ll hit the highlight reel:
- When digging a hole, the easiest way to get out is to stop digging. First, I made the decision to get out of debt by any means necessary.
- I had so much miscellaneous consumer debt floating around I didn’t have an honest account of how much debt I truly had in my name. This needed to change. Second, I requested my free federally mandated credit report from all three major credit bureaus from AnnualCreditReport.com.
- I had never created a budget in my entire adult life. When I needed more money, rather than spend less or track my income and expenses like a responsible person, I worked more hours or took on another part-time job. Not only was this unsustainable, it also made my life miserable. Third, I created a budget that tracked all of my monthly income and expenses. You can also use automated tools. I use Mint but hear positive reviews by users of YNAB, Level, EveryDollar, and Prism.
- A declaration is nice. A plan is even better. Many people think declaring their debt free resolution is enough. I disagree. You need an action plan to make your resolution come true and hold yourself accountable. Fourth, you need to create a debt payment plan. Originally, I used Bankrate’s debt payment calculators, because they’re free and I’m cheap (now). I also recommend Ready For Zero, MoneySavingsPro, and SimpleDollar.
Look, money is meant for spending. Even after all of my struggles with money, one of my favorite quotes is still, “if you didn’t help me make it, don’t tell me how to spend it.” Today I’m still not perfect. I still make financial mistakes, just far less than I used to. Living within your budget and living life are not mutually exclusive. You can do both and hopefully you don’t have to waste $26,000 and seven years of your life to figure that out.
Marcus Garrett is an auditor turned author of Debt Free or Die Trying: How I Buried Myself in Over $30,000 in Debt and Dug My Way Out By Age 30 and co-host of Paychecks & Balances where we share free advice to help young professionals raise their paychecks and lower their balances so they can live the lives they want. You can find us on Twitter @PayBalances and Facebook: PaychecksAndBalances.