Monday, June 8, 2009

The Dog Ate My Credit Card

I am lucky. And it is pure luck--no forethought or planning or even common sense has given me what so many out there long to have: zero credit card debt. That's right. I am one of those. Every month when the credit card bill comes (and there is only one card) it is immediately paid off. To the penny. 

And it is through no doing of my own that I am in this fortunate state.

I have to give my man props here. He is financially responsible to a fault. No money in the budget for a new couch? Forget it, man--you're living with sofa circa 1999. Want that cool round dining table from Pottery Barn? Save for it. You can do it--just trim the grocery budget a bit and put the excess aside (I've been trying that for about 4 years now, and still have only managed to save about 25 cents). Vacation? If the dough ain't there, it ain't happenin', baby. Sorry. Get use to the view from the patio.

I'm not complaining--altho I must admit, that during the heady days of 2004 - 2007, I complained alot. Everyone I knew was upgrading this and refurnishing that, buying that shoe and going to that place. I remember bugging my husband endlessly for that round black Pottery Barn table, and protesting his "save for it" attitude angrily. After all, we were using (and still are, hardy-har-har on me) the table he and his first wife used  for the seven-plus years they were married.  

But in those same years, we upgraded the kitchen and put in a fab new pool, using funds he'd carefully budgeted. It was okay. It worked. And now, with daily newspaper reports of people mired in seemingly inescapable debt, I find myself eating a bit of financial crow. Had it not been for the clear-eyed pragmatism of the man I married, I could very well have been in that same situation myself. 

However, conversely, over the years we developed the habit of buying everything from gas to gum to groceries with credit cards. My husband insisted we use the card on any purchase over$10. In retrospect: huh?? If I spent $10.50 on Starbucks coffee for a meeting, I had to use the credit card. Movie tickets, mani/pedis, jaunts to the drug store, you name it. I got used to using the card for everything over time. But as you might predict, something happened--I began to lose track of a credit card as real money. I mean, what's $20 more bucks for a pair of sandals for the girls from Target, right? It's only $20 bucks. It wasn't like I was going about and spending huge money on something (like that Pottery Barn table...). Just a tiny bit extra here and there.

And as long as the bill was paid off every month and we earned the airline miles and special rewards, it was all good. Plus, with the cool Quicken computer program that enabled us to download our credit card purchases to our computer, we could easily see what we were buying--how often and how much it cost. The credit card company made it very easy to become very reliant on them--even for a financially savvy guy like mine who made sure the debt never carried over.

But the recession has changed things for us. Like many out there, my husband is compensated partly in bonuses. And like many out there, his company has cut bonuses. Add to that the  inescapable fact that I'm not making what I imagined I would by now as a freelancer (leave it to me to re-start my freelancing gig smack dab in the middle of the worst recession in 80 years), and you see a couple with decreased spending power but the same spending habits.

And for the first time ever, when the credit card bill came in, we were in real danger of not being able to pay it off. We did, but it meant a much tighter month. So I proposed to my husband an idea that he latched onto right away (something of a surprise, given that his opinion of my financial skills is pretty low).  

I suggested we go on an all-cash basis. Yup. All cash. He would give me a certain amount every two weeks to manage all the household/kids' activities/parties/pets stuff that I am in charge of. Everything but gas. I wasn't really sure he would agree to it; after all, he'd run things his way for the last 10 years and it had worked out pretty well, over all. But he recognized the same thing I did-- that those extra "$20" here and $30" there days had to end. It wasn't just me picking up a cute dress at Target for one of the girls, or stopping at Barnes and Noble spur of the moment to by the latest edition of "Writer's Market." It was him, too--a new game for the Wii here, a $300 trip to Cosco--you bought what?? Using the credit card made it waaaayyyy too easy to spend more on crap. I mean, really. You should see my daughters' closets. Does any kid under 10 really need 13 pairs of shoes? Really

So I took my credit card and stuffed it way down deep in my wallet, behind the store club cards, business cards I've picked up here and there, ancient receipts, and the like. I really jammed it in there, so pulling it out to pay for stuff is not nearly as easy as it used to be--either figuratively or literally. And I'm trying to organize what seems like a huge amount of cash (which I am keeping in a bank vault 10 stories underground at Gringotts, guarded by terrible and menacing trolls which will not hesitate to put a serious hurt on anyone besides me who comes close to my stash--including my husband. In other words, a bank account) Just seeing that amount of "real cash money"--which was determined by the average amount I spent each month on household "necessities"--was daunting. How could I possibly spend it all? Yet I did, with my good friend the credit card. Every month. Yikes. 

I'm feeling optimistic about the new all-cash plan. It will mean less spur-of-the-moment purchases, fewer spontaneous trips to the mall. But it may also mean that we save more--and that I may be able to get that cool round black dining table from Pottery Barn after all. 

check out these cool sites on budgeting, by the by. They've been a huge inspiration.

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