Optimism is usually a trait that I try cultivate within myself. Without being a Pollyanna, I do try keep negativity at bay in my life. For one thing, I don’t think it is helpful to myself to be negative, especially on a regular basis. I deal with anxiety and depression, and a negative attitude will bring on a bout of depression every. single. time. If I’m having a tough time being positive about a difficult situation, I try to have a realistic outlook if I can’t manage a positive one. Positivity is a trait that I try to have and to cultivate in my children.
But there is one area of my life I found an optimistic outlook to be damaging.
That area of life is finance.
Now, I am not saying that you shouldn’t be hopeful about paying a mountain of debt. You absolutely should be willing to work toward a goal like paying off even huge debts. Having a positive picture in your head of what being debt-free looks like in your life is a huge motivation. Picturing myself and my family without debt is a huge motivator for me. Being free of the added daily stress that comes from being under credit card debt, huge student loans, and a car payment is a positive thing–with no downside!
Being optimistic about getting out of debt, then having a plan to get there, is definitely helpful.
I was simply too optimistic about my finances at the wrong time of my life–my twenties.
Especially my early twenties.
In high school, I worked hard to get into college, and when I did, one of my top colleges offered me a full academic scholarship. I went there, and between a handful of other grants and scholarships, my room and board were also paid for. All of this was great, but I had zero spending money, so I worked as a resident assistant as soon as I was eligible. I also did odd jobs at festivals and things that were hosted on my campus.
Money was tight, but all my needs were met, and I was working hard towards my double major.
I also saved up money and bought a used car with my mother’s help. And by help I mean that she helped me test drive it and secure a loan for it–I only had a small amount for a down payment. It was a little blue Saturn coup, and I loved it, as you can only love your first car. Payments were reasonable, but it would have been much better to own a car outright, especially on my very limited budget.
But I was optimistic.
Sometime early in my college life, little official-looking envelopes began to arrive in my student mail box. “Zero interest!” “No annual fee!” “Buy now, pay later!” These envelopes called to me. Money was tight, and I had no idea what I would do in an emergency–like if I got a flat tire. It was also tough being broke all the time. Turning down invitations to eat off-campus and never getting to buy a new shirt gets old, fast.
Somehow, I felt that these little envelopes held glimpses into my future. You’ll be financially comfortable in a few years, they seemed to say to me. You are working hard–of course you’ll be able to pay me off almost as soon as you graduate!
I felt like the credit card companies must have known I was a good bet–that somehow they knew that I was a hard worker and smart. Did they know that I had graduated as valedictorian at my high school? That I had high grades in college? That I was going for a double major?
To me, it seemed like they must have known me personally, and knew that I would be able to pay them back. In full. In the near future. Why else would I have all of these shiny offers of credit?
Of course, I know now that I was duped. No credit card company knows my grades. Or, if they do, they don’t care. They just knew that I was 18, in college, and ripe for the picking. They lured me in the way they lure in many college students–they warned that I needed to build credit and now was the time to do so, because I had my whole future ahead of me.
At the time, that seemed really positive to me. Now it seems a bit sinister.
Yep, my whole. entire. future.
If I hadn’t been so optimistic, I wouldn’t have gotten myself over my head financially so early in life. If my attitude had been more cautious, more realistic, I may have avoided credit cards altogether at that stage.
But instead, I had three different pieces of plastic with my name on them when I was only 21.
While still in college, I did begin to panic my senior year about the rising balance on a store card. I immediately stopped using it and paid off the nearly $500 I owed months before I graduated. That felt really, really good, and it was a good lesson on what I can do when I focus on a financial goal.
I did, however, have a rising balance on a credit card. by the time I graduated, I owed about $2000. At the time, it thought that was manageable, and, hey, I still had my whole life ahead of me! I was just starting out, so of course I needed new clothes for work, needed to network over dinners, and needed that little piece of plastic to help me along my way.
Of course, with a higher credit card payment comes higher minimum payments, and soon I had a hard time making these payments after paying for rent, groceries, gas, car payment, and insurance.
Looking back, I need a spending freeze and to focus on paying that card off.
I should have become a Negative Nancy about the credit cards, right then and there. I should have changed my attitude–after all, credit card bills were becoming painful to open. I should have seem them as sinister and done all I could to get out from under them.
And at some point in there, I did stop using them for shopping and eating out. I did, however, keep them for emergencies.
About the time I was 23, emergencies rained down on me. My mother got cancer, and I was two states away in graduate school, newly married, with an internship and large student loans. I had no money to buy plane tickets back home to see my mother as she waned, but I went anyway.
As I should have.
But since I was emotional and panicked and didn’t know how else to pay for travel expenses, everything went on a credit card.
I’m still paying off those last trips to spend time with my mom, over ten years later. Her illness lasted for over a year, and although I took a leave of absence from school and got two jobs in the meantime, I wasn’t managing money well enough to really make paying off a credit card a major goal. Yes, I wanted to pay them off, and I the rising balances nagged at me, but I was still putting all my hope into some still unspecified, rosy financial future of mine.
Well, I am here to tell you that the rosy financial future never arrived.
I graduated from grad school a few months after my mother died with a theology degree. I got my first job, bought a house, and the the Great Recession hit. Since my first job was incredibly stressful, I went to another job for a company that closed, then to another, which I loved, but paid very little. Now, I am a stay at home mom of two kids, I write, I do occasional odd jobs. I tell you this not to complain–I actually really love what I do right now–but I NEVER pictured this as my life when I was in college or grad school.
It is easy to look back at my younger self and think what was I thinking? But I know what I was thinking–I was optimistic about my future. I never pictured myself as married, a stay at home mom, and with all of the responsibilities that being in my mid-thirties brings. I do wish that I would have been smarter with money and credit cards much sooner in my life, but instead, I have to be realistic now and as hard-working and focused as I can be to make sure that my forties aren’t as financially thin.
And above all, when my own children go off to college, they will go with a warning about those little white envelopes with their shiny promises.