Once upon a time in a faraway land, there lived an 18 year old girl named Jane on the greatest adventure of her life: college.
Things were going great. But Jane was ill-prepared for this first step towards independence. Jane knew NOTHING about how to handle her money. The only thing she knew was that she wasn’t to touch her savings account, because as soon as she did, she knew that money was gone forever.
One night while out for pizza, Jane and her friends were approached by casually dressed men and women. “Free pizza for signing up for a credit card!”
Hey now…Free! Jane and friends were so in!
And just a few days later, Jane had $500 in her hands in the form of brand new shiny, shiny plastic. Jane thought, “Gee, I can use this in case of in emergency so I don’t have to touch my savings!” And thus the slow tumble into trouble began.
Because “emergency” when you’re a college student can be as simple as, “I ran out of money. Instead of waiting three days for my parents to put more money in my account, I’ll just buy this DVD now and pay it off next week.”
Only she didn’t pay it off. And when the bill came at the end of the month, it was over $200! Jane didn’t have $200. But that’s okay, because she could just pay the minimum payment of $20. “Wow,” she thought, “This is great!” All the while completely ignoring the $4 in interest she was charged that month on her purchases. After all, it was just a few dollars, and she’ll have it paid off next month.
Only it wasn’t paid off the next month either. And Jane continued to ignore the charges. In fact, a few months later, Jane signed up for another credit card! This time for a couple of gift vouchers for free admission to the movie theatre. Yeah!!
“And why not?” she told herself, “The laptop I have is literally melting on the bottom. I need a new one, and I just can’t use up my savings!”
If only poor Jane had stopped there. But the credit limit on the new card wasn’t enough to buy the customized Dell Laptop she wanted. So a few months later, she applied for (and was unfortunately approved) for a third credit card!
It was now July, and in 10 months, Jane, a girl with no job to speak of, was turned down by no one and approved for 3 credit cards, granted a sum total of $1500 worth of credit!
But Jane still needed a laptop, so she used her savings to buy the reasonable, used laptop she should have bought in the first place.
And now she had done it: she touched her savings. And those savings would only go down from there as Jane, a girl with no money sense and a healthy addiction to buying stuff, started spending money like she rolling in it and spending money she didn’t have.