Living On A Credit Line

My worst financial train wreck is the reason why I enjoy Mint so much: it reminds me to keep my finances in control.

A couple of years ago I had a really great job, paying great money. My problem was that I thought I should live according to how much money I made. I got a huge apartment that cost tons of money. I spent my money as freely as possible. Then I decided to get a credit card for emergencies because I wasn’t saving a dime. I started using the credit card as my overdraft protection; big mistake! I was overdrawn every month. The fees were outrageous. At the time I never looked at my bank statement because I was afraid of what I would see. I just kept spending. I don’t even remember what I bought. I not only used my credit card for overdraft, but when I ran out of money I would withdraw from it. I could barely afford groceries most months.

Here’s an example of how much I knew about my finances. One month I put my rent check in the manager’s box and said, “Well at least I could pay that.” I walked away and forgot about it. A month later I paid my rent again. I got a letter in the mail from the bank. I opened it reluctantly and it said my account was overdrawn by $2000! I had no idea what had happened. I said there was no way I could have gone over by that much. I looked online and realized the manager of my apartment had put through this month’s rent check as well as last month’s. I had spent last month’s rent money without even noticing it hadn’t gone through. I called the manager and asked her why she did that. She said my check fell behind her desk. If I would have watched my bank account I would have noticed right away that it didn’t clear and called her. Now I was -$2000 and had to do something about it fast.

I finally gained control of my finances. I took a copy of my bank statement and went over every single line. I realized where all my money was going. I was wasting hundreds of dollars just in fees and interest alone. I quickly got my act together. I make less money then I used to but now I have more of it. I live a more “rich” life on less. It feels really good to finally have control of my finances.

Train Wreck Tuesdays are a weekly post of horrible financial mistakes. They are posted anonymously. Submit your story; if you’re selected, you get a free personal finance book. The best comment gets the same prize! Check out past Train Wreck stories here.