Living On A Credit Line
- Train Wreck Tuesday
- Our Train Wreck series features stories of financial woe submitted anonymously by our readers. Submit your own story, and if selected, you'll win a Mint t-shirt!
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.
Good for you! I hate checks because of that reason. Some people hold checks or forget to deposit them.
Next time just use online bill pay or a money order. I made a lot of mistakes in my 20s, now at 34 I am financially savvy. But I would not be this way had I not made financial mistakes.
Sometimes it’s good to make mistakes so you can learn from them.
Our landlord sometimes holds our rent checks for three or four months. We don’t evne bother to have OD protection because we never, ever bounce checks.
We just live by our handwritten check register, not by ATM slips or whatever it says our account balance is online. So it doesn’t matter if the ATM says we have 10 grand in our checking account - we know if there is really only 100 in there that’s free to use.
We have friends who never use a check register and bounce checks or are overdrawn constantly because they are too lazy to write down the checks they wrote and withdrawals they made. So they pay huge fees all the time and are always whining that they are overdrawn yet again. And they are not young, they are in their 50s - so youth is no excuse for their stupid behavior with their checking accounts.
The simplest way to avoid being overdrawn is just to WRITE EVERY CHECK DOWN and every other transaction as well. It’s definitely worth the effort to make it a habit.
Checks suck. Avoid them at all costs. I pay rent via direct ACH online transfer. 5 minutes after an ATM withdrawal, and I see it listed online. Thus online = how much I have right now.