Rock Bottom

Photo: Just a picture of water flowing over rocks.

Anyone who changes anything at some point will hit rock bottom.  This happens with alcoholics, gambling addicts, and over-spenders.  This is the story that turned my financial life around.  Before we get to the story, we must get some background.  

My College Years

I felt like I was a pretty normal college student, I worked in the summers.  My summer job paid for my summer tuition, but I didn’t keep up with that intensity during the fall and spring semesters.  I took out college loans and purchased items with my credit cards.  The worst thing that I remember doing was a daily ritual.  I would stop at a little convenience store in my apartment complex on campus and purchase items with the student card.  These purchases were later billed to my student account and they added up.  Each month I would pay them off with a credit card.  Looking back on my college years, I see a person who could not control his spending and somebody who had no self control. 

Another stupid move that I made was the purchase of a laptop as a sophomore in college.  My desktop computer quit working and I knew that I needed a new computer, but I decided to get a top of the line computer with all of the bells and whistles.  I purchased a $2,200 laptop, which included a set of speakers.  The cost of that computer was outrageous, but I also had to finance the computer through Dell (I didn’t finish paying off this computer until after hitting rock bottom).

In my college years, I never hit rock bottom and always had enough money to keep going.  I had an on campus job working at the dining hall, but always had debt.  This is something that is very common in America today, with many students getting into credit card and student debt.  Continually staying in debt will be one way to assure that you will never reach financial independence, but I didn’t know this in college.

My Early Working Years (2009 – 2011)

I moved to Houston in 2009, but before I moved, I decided to buy a new car.  I felt like my 1998 Ford Tempo would not make it to Houston.  So, I purchased a 2005 Pontiac Grand Prix for $11,000 on a loan from a credit union.  In the spring of 2010, I purchased new furniture.  The furniture was on sale and I needed a new couch.  The 3-piece set of furniture was put on my credit card (notice: I stated that I needed a new couch, when in all reality, we didn't need it because I couldn't afford.)

In the fall of 2010, I went on a trip to Seattle.  My Dad and I went to watch a Nebraska football game.  Seattle was beautiful and we had a great time watching Nebraska beat Washington, but I financed that trip by putting the whole thing on my credit card.  In my early working years, I would spend more than I made, pay my monthly minimum debt payments and live basically month to month.  This trend would continue until the spring of 2011.

In the spring of 2011, I went to visit my sister in Tucson, Arizona.  She was in Arizona on an internship.  I spent a week in Arizona, spent more money than I should have and had a good time.  This next part is where I hit rock bottom.  I left Arizona and drove back to Houston.  On this trip, I was probably five hours from Houston, when I blew out a tire going 80 miles per hour.  I pulled over to the shoulder, got out my spare and changed the tire.  

I drove 17 miles on the spare and pulled into an auto repair shop.  I was nervous, because I had no money left on my credit card and I didn’t have enough in my bank account to pay for two new tires.  The cost of these tires was $350.  I couldn’t afford $350 tires.  

So, with $150 in my bank account, I called Wells Fargo Bank.  They had recently started doing something called Direct Deposit Advance.  This program advances money to customers who have established a trend of receiving direct deposits monthly.  The direct deposit advance is basically a payday lender.  They agreed to advance me $300 and charged me $22.50 for the advance.  This charge was basically 90% interest annually.

I did the one thing that I will never do again in my life.  I basically used a payday lender to fund the purchase of $350 tires.  It hurts writing that sentence, but it took using a payday lender to spark my financial turnover.