How I Managed to Rack Up $17,000 In Credit Card Debt at 23

April 13, 2017

In previous posts, I mentioned that fun time period when I was 23 and managed to rack up $17,000 worth of credit card debt. I would love to say this is an intriguing story of a misguided youth trapped in a vicious cycle going down the wrong path.  It’s more of a story about me acting like a complete entitled brat after college, but enjoyable nonetheless.  You have to admit, stupid money mistakes make people feel better when it wasn’t them that made them.  So this post should make you feel Grrrrreat! 

I did some really dumb things as a young 20 something and I hope at the very least you can learn from what I did and never go down that road. These mistakes aren’t only relevant for those coming out of college but are applicable to any time period in your life.  Below are the reasons I managed to rack up that much debt so you can cringe along with me and never make the same mistakes. 

Keeping up with the Joneses

This was my #1 mistake.  I got caught up in a lifestyle I couldn’t afford.  My friends were really into the party scene (ok fine it was ME that was really into the party scene), so we went out almost every single night of the week.  If we weren’t going out to a bar we were inviting people over and serving drinks on our back porch.  Weekends were the worst because that’s when went out to non-happy hours and paid an absolute fortune for drinks and food.  Looking back on these days I can’t really explain my behavior towards spending as anything other than completely idiotic.  All together I had about $50K in credit card limits and took pride in the amount I was able to spend.  I spend on absolutely everything to make sure my friends and coworkers knew I was able to keep up and be in the cool group.

I remember having a playful competition with one of my roommates about how many boxes we would order offline and who ordered the most each week.  Everything I ordered was something I 100% didn’t need.  Another new shirt I wouldn’t wear or more cheap jewelry that would break after one use.  I steadily racked up debt one swipe at a time because my friends thought it was cool I had such high limit and could spend on what I wanted and had so many miles.  Oh the miles …

I booked a lot of trips with those miles because I thought I could afford them.  If the flight was free the trip was justified in my mind.  I went to Europe multiple times using my credit card.  On one trip I spent over $3,000 while I was there for a week (not including the flight).  I shopped constantly and ate out irresponsibly because I was on vacation and vacation means you spend whatever you want.  I treated myself like a queen because I wanted people to think I had this amazing life, living in a big city, traveling around the world.  In reality I was making $40,000 a year as a legal assistant and living wildly above my means.

Small expenses really matter

About three years into my spending black hole I realized my debt was a problem.  I started having trouble paying the minimum payments on all my cards.  How could this possibly have happened?? I began to wonder why none of my friends seemed to have this problem.  How did they have so much money leftover and I had to resort to my credit cards all the time?? I began to pay more attention to their money habits and a whole new reality was revealed to me.  I had never noticed when one roommate would eat at home and only order drinks when we went out or that another friend would order the cheapest beer and snack on free bread.  I was the only one ordering the lobster pasta and $12 cocktails.  We also shopped at the same places but I didn’t realize they would only scour only the sale racks while I was in the storefront windows.

I looked at them in a whole new light.  When someone ordered a beer at happy hour I always said to myself well a cocktail is only $2 more than a beer so what difference will that make?  Or the sale shirt is $10 but the regular price is $25 and $15 seems so small it doesn’t even matter.  When you add a few dollars to everything you buy it REALLY adds up fast. I remember at one point looking at one of my restaurant tabs and complaining that I had no idea how I spent $50 on a dinner and my roommate replied that she didn’t either because she had only spent $20.  I feel like we had always been on par with our spending but I was about to realize my problem with tacking on a little more at each outing.  A coffee that costs a little more, and a shirt that’s a few more dollars, really makes a difference overall.  When I would look at my credit card statements it didn’t seem like I was spending like crazy it was $10 here, $20 there, but how did those possibly add up to so much?  One Saturday I spent the day with a friend and secretly monitored her spending to see how different our spending could possibly be.  I don’t remember the exact situation but it went something like this:

What I spent on a typical Saturday:

$4 at Starbucks on a latte

$25 on a shirt at H&M

$40 dinner with friends where I purchased the lobster pasta and an appetizer

$40 for four cocktails after dinner

= $109 TOTAL

What my friend spent:

$0.50 making coffee at home

$10 on a sale shirt at H&M

$20 dinner with friends where they purchased an appetizer and soup

$24 for four beers after dinner

= $54.50 TOTAL

I spent roughly 50% more than she did on all of the purchases that day.  If that was about the average I was overspending, over the course of the year that amount adds up to roughly $2,800!  Just for that one day of the week!! That overspend calculated for the rest of the week is exactly how I had accumulated so much debt. I was shocked and horrified at what I had been doing without noticing.  Those little add on’s had been my downfall.  I finally realized that small things make a HUGE difference when you add them all together.

These were my two biggest life blunders that left me in a deep hole that took years to dig out of.  What mistakes have you made in your life that took you down a dark financial path?



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    1. Thanks for sharing your story! That is quite a hole to dig yourself out of, especially considering the high interest rates associated with credit cards. Lifestyle inflation, or keeping up with the Joneses, can definitely bust a budget.

      My financial misstep was financing a new car a few years after college. While I’m still driving the same care 15 years later, I sure could have put those car payments to better use.

      1. Ouch! Car payments will definitely do the trick. Glad to see you’re still driving it and didn’t continue the cycle and keep getting a new one! We live and we learn.

    1. We all make mistakes! Thankfully you learned from it and can now move on. My biggest financial blunder was trying to invest in risky stocks that eventually tanked. As it turns out, when they say “high risk, high reward”, you shouldn’t only pay attention to the “high reward” part of that equation. The “high risk” part could bite you in the ass!

      1. Nice lesson! You sometimes have to learn the hard way unfortunately but you’ve clearly come out on top!

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