BankerGirl

Posted by Heidi on November 19th, 2007 in About BankerGirl, credit cards, debt

Trent at The Simple Dollar recently published an article about dealing with personal financial shame.  That piece really hit a nerve with me - I don’t want to tell anyone who actually knows me about my blog because I am so ashamed of the huge debt load I’ve acquired - but the point of the blog is to give me some personal accountability.

So without further ado, here it is, in all of its ugly glory (is that an oxymoron?).  The truth about my finances (all numbers are as of 10/24/07):

Expense	Total Outstanding	Monthly Payment
Mortgage	162,115.90	1,450.00*
Car	18,028.74	450.00
State Student Loan	1,123.24	50.00
Federal Student Loan	64,194.80	315.00
WaMu Credit Card	5,948.10	300.00
HSBC Credit Card	4,541.46	150.00
Chase Credit Card	3,461.30	200.00
Bank Credit Card	3,299.82	100.00
Retail Credit Card	320.00	50.00
Totals	$263,033.36	$3065.00

*The mortgage payment includes principal, interest, taxes, and PMI. 

The above debt is 100% mine.  My fiancé had a home of his own when I bought the house we live in now, so we agreed that I should make this purchase in my name only.  I don’t believe in consolidated debt and I know that I have the responsibility to pay it off myself.  I am not going to get into the interest rates on each of these expenses, but two of the credit cards are well over 20%, so that has been my top priority. 

What this chart tells you - I have a lot of debt.  Over a quarter of a million dollars.  It’s a very humbling number.  The other thing you probably figured out is that in order to meet my monthly obligations (and I haven’t missed a payment in years),  I must make a pretty decent salary.  And I do.  Between my full-time job and the money I make teaching, I am pulling in just barely shy of six figures before taxes - a very nice living for someone living in my neck of the woods.  Subtract taxes, daily living expenses like food, gas, and utilites, and you can see why I have been researching ways to live more frugally.  I don’t exactly have a ton of “discretionary” cash left over at the end of the month.

What this chart doesn’t tell you: I have only managed to pay $6800 off the principal of this total debt since the first of the year - the rest has gone to interest.  Assuming my monthly payments have been flat for 11 months, that chart represents $33,700 in payments in 2007 - and yet only $6800 have reduced my principal.  Yikes!    

When it comes to money, my personal mantra has always been “I can make more.”  Thanks to a couple of 50% raises in my past, that has been true to a point, but I think the subliminal subtext to that mantra is “I can always borrow more.” 

I don’t know why it’s taken me so long to be bothered by the crushing debt that has been following me around for the last decade.  I guess it didn’t seem so bad until I became a homeowner - and then I figured I could sell my house for a profit and my equity would set me free (thank you, subprime securitization, for pulling the market out from under me). 

So now you have a better idea of just how badly I have managed to screw myself.  Part of the banker in me says “just declare bankruptcy - your credit will be fixed faster than you can possibly pay this off,” but I can’t do it, it feels immoral. 

And so, it’s time to hunker down and get serious about reeling in my spending.

Stumble it!