Debt Breakdown Part III : Personal Loan

When I got my first full time job out of college, I was so determined to get my debt paid off. At the time, I probably had about $10k in credit card debts - other than Visa, Master Card and Amex. I also had Best Buy, Nordstroms and a gas card from Shell. I wasn't reading any PF blogs at the time but mostly CNN money or MSN Money where they give little tid-bits on what to do with CC debt etc. I thought it would be a great idea to consolidate into a personal loan since my bank was offering me a great APR. I thought this will give me an actual time frame to pay off debt. I borrowed against my car about the time I paid it off.

That obviously did not happen to plan - what happened was the now "paid off" credit cards were used to keep up with the Joneses. I felt like I had so much more room to spend money on - It started with a full on new work wardrobe, Traveling since I get two weeks off from my full time jobs, eating at these schmacy restaurants etc.- all courtesy of American Express, Visa and MasterCard. Thanks guys! I felt like I was on top of the world because now I can 'afford' everything and at this time, I was getting paid more.

The whole vicious cycle happened again and now I am back to square 'two' lol. My second consolidation happened exactly last year to get these credit cards paid off - obviously there were some leaks again because as you can see I have credit card payments within my totals. I am waiting for the day to pay off this current personal loan.

Lesson Learned 
I promised myself that this was going to be the last time I will take out a personal loan to consolidate credit cards. I am determined to pay this off now before paying off CC#1 just to get it off my back.







Have you ever used a personal loan to consolidate credit cards?

Debt Breakdown Part II : Car Loan

not the actual car*

I first got my license when I was a senior in high school and my parents gave me a 1988 Honda Prelude. At the time, I thought they got it for me because I was their favorite daughter =) but come to realize that whole summer I became their errand girl. I wasn't really the kid that went out a lot - I was scared of getting pulled over, so I never drank and drove. My parents also paid for gas. I think their only caveat was for me to concentrate on school. I started Junior College at the time - my parents paid for school, books and gas (I remembered gas at 95c - the lowest me and my BFF found). I had the job at the retail store, but eventually quit after a couple of months.

not the actual car*

After two 1/2 years in a Junior College, I had to transfer into a University - about 35 miles from home. At this time the Honda was in bad shape (I cant even drive it on the freeway), I did not have much credit and my dad thought I was not responsible or probably did not have enough money to pay for a new car. So he gave me a 'deal' - I was going to take their 1999 Toyota Camry which had about a couple of months until its paid off. I thought "Ugh, I am driving an old people car!" - I wanted to be cool... I needed to be cool. After driving the "old people car" for almost 2 years. I begged my dad to co-sign a car loan with me. I gave him the most ridiculous reasons why I needed a new car ... there was a loud noise (break pads changed!), the car wouldn't start (battery changed!), the A/C wasn't working - well he told me to put up with it! But eventually, the car gave out (there was some kind of recall too from what I remembered).

not the actual car*

I told him I wanted a TRUCK, so they took me to a dealership. They co-signed a loan with me through their credit union (this is how I became a member), but they never told me how much the credit unions loan we got approved of (My parents never really talked about money with us). Toyota trucks were nixed off my list at first - they were expensive! I asked my dad if I can just get a Ford Ranger - but he had a preconceived idea that fords aren't reliable, I checked out and test drove a Nissan Frontier - my dad DID NOT like it (huh?). So we went back to the Toyota dealership and got me a 2005 Toyota Tacoma. Still at this point I did not have any idea what the total loan was - My dad asked me if I can afford the $450/mo payments and I said yes! I signed the loooooooong papers along with my parents - didn't even know how the negotiations went. Plus, I did not even get to drive the car off the lot - thanks dad!

Car loan $25,000* - Trade in Camry $4,000* = $21,000* + taxes $3,000*

First car loan while in college $24,000* with a part-time job as a server at a local restaurant. What a smart cookie!







What was your first car? How much was your first car loan?

Debt Breakdown Part I : Credit Cards

My first 'real' job was at a retail store around Christmas time my first year in college. I had to beg my dad that I NEED a job. I told him that I want to start paying for my own gas (he gave me my first car) and have allowance for school. I don't know why I wanted to grow up so fast... I regret that to this day! I think I just wanted a job because I wanted to be able to buy that things that my friends parents were able to get to them. I remember feeling so exhausted on my first day and kept telling myself that this better be worth it! The pain went away after getting my first check for... dun dun dun.... $300. I felt like a bazillionaire and off to the mall I went... it was gone before the next check came along and the vicious cycle started.

My friend told me that she got approved for a credit card and treated us out for lunch and dinners here and there She was able to buy anything she wanted when we went shopping. I was jealous - I wanted to keep up with he, so I opened my first credit card from Capital One Visa with a $500 limit. Off to the mall I went again and again and again - I probably maxed it out within months of having the card. But not to fret, I was only paying $50/mo for the card and when I paid the minimum for the month I was able to squeeze in a lunch or dinner for $20... then its MAXED out again.

Then I got approved for another visa card for $1000. I have probably opened 3 or 4 more credit cards after that where the limit ranged from $1000-$3000 - all almost maxed out by around the time I got my first full time job out of college. I used to travel a lot with them and the per diem was paid back to us after we do our expense reports (I hate expense reports!). I was on a spending spree - Bought knick kacks as souvenirs, shopped and ate out - A LOT (The only thing that the company reimbursed me for) On top of that, I had a car payment to pay and the lovely student loans kicked in. I was broke! The first job out of college was only paying me $40k and I wanted a way out.

This was when I started to make some changes. The first financial book I read was Robert Kiyosaki "Rich Dad, Poor Dad". I don't remember details from the book at all but   From what I remembered my debt breakdown were approx $46,000

Car Loan	20,000.00*
Student Loan	16,000.00*
Credit Cards	10,000.00*
TOTAL	46,000.00*

How did you get into debt?