Given her limited experience in the land of the working, Jane thought $8 an hour was rich! After all, the best offer she had was $7 for a job at a daycare — a job she most definitely hadn’t wanted! Lucky for Jane, they took so long to call her back, she had forgotten where they were and showed up fifteen minutes late to the interview.
So, here was Jane, working for her parents, feeling like a complete failure in life. But hey, she could pay all of her bills (most months) and had found a nice, barely affordable apartment with a spectacular view of a gorgeous little duck-filled pond. Life wasn’t just too bad. Not yet.
But lurking the shadows of the future was Jane’s stupid tax from college: $9,600 in the form of students loans. The first payment of $120 was due December 1st.
Jane didn’t have $120 extra dollars in her budget; she had NO extra money in her budget. In fact, the poor girl was already $50 in the hole most months! She was making ends meet with credit cards because she just knew there was a higher paying job on the horizon. This situation was temporary — at least that’s what she told herself every month when she sat down to write the check for her rent and wipe her account down to pennies.
Every so often during that first year out of college, Jane was asked about her finances because her mother found a credit card bill at the house that summer with Jane’s name on it. And every time, Jane would miss another perfect opportunity to come clean and get help, opting instead to do the adult (aka “independent”) thing and deal with the problem herself. So she would lie and say, “Everything is fine. I have everything under control. Fa-la-la.”
Under control things were not. And the next spring, Jane finally buckled under the stress, came clean, and her loving parents bailed her out nearly $11,000 in credit debt with one condition: Jane close ALL of her credit cards but one. To help her out further, her father told her he would take over the student loan payments indefinitely.
With tears drying in her eyes, Jane could breathe at last! She cancelled and paid off all of cards, keeping one “for emergencies only.”
If only that had solved Jane’s problem. Unfortunately, it didn’t. She still wasn’t making enough money to make ends meet despite having no cable and the most basic cellular plan available. She rarely ate or even went out because she couldn’t afford it, and back then, Jane didn’t even think about going on vacation.
To avoid using her “emergency only” card (the limit of which had now reached over $5000 thanks to her “being responsible” and paying off all of her debt), Jane applied for another card that summer with a 0% introductory rate to help her cover her monthly expenses. Because of her love affair with debt, Jane had “good credit” and was granted a starting limit of $4000! She was rich! She was going to make it!
Too bad Jane acted like she was actually rich and ran up her card. No matter, she’ll simply get “one more” to maintain her breathing room. And that fall, despite her low income, Jane was approved for yet another $4000 limit credit card.
But she was going to be responsible now. She was going to only use them on those months when the electric bill was too high, those months she needed to put a second tank of gas in her car, those months she wouldn’t quite be able to pay to her rent unless she charged something else she needed like groceries.
Too bad this turned out to be nearly every month thanks to a $25 increase in her rent — another special surprise from life Jane hadn’t known about. Rent goes up? Air conditioning is more expensive in the summer time? Poor Jane!