7 Things I Learned From Ruining My Credit:
Hi guys it’s kelsey from the financial diet and today i’m going to be telling you a little story about myself that you already have heard a little bit about i’ve spoken before on the channel about how i ruined my credit at 18 and how that’s a big part of the reason why i like to help other people get better with money now and i’ve even done a whole video which i’ll
Link to in the description where i talked about kind of what i learned from it and how i got out of it but i’ve never really told the full story of how i actually ruined my credit and as with most money things the story is really both practical and emotional there were a lot of clear tangible choices i made that led to me ruining my credit but there was also a lot
Of emotion behind it and my theory about money is that if you don’t deal with the emotion surrounding it you’ll never actually fix the problem so to tell you the story of how i ruined my credit we have to start at the fact that i was 18 years old and this was the pre-2008 era where banks would literally set up these booths in high school cafeterias or at least mine
Anyway where you would be encouraged to sign up for a credit card and get one and do whatever you wanted with which looking back now is obviously insane because no high school seniors should be able to mess up their financial lives that much and i was actually 17 in high school so i was really frustrated that i wouldn’t be able to get one with everyone else so the
Day i turned 18 i was like to the bank and went and got my credit card and it should be noted that my credit card was actually a hello kitty branded credit card it had a large picture of hello kitty on it and pink writing with my name it was all very mature and financially responsible but so long story short i got the credit card because everyone was doing it and
I really did not understand the concept of this is money that you take because you’re going to pay it back i had no concept of building credit or how you could use it to your advantage or points or a credit score or any of that stuff i really looked at it like it was one of those visa gift cards your grandmother gives you a christmas it’s just like you use it at
A store or a restaurant and then you throw it away but at the time none of that was important i didn’t need a parent to cosign which all my parents would not have co-signed on my 18 year old self getting a credit card and i didn’t read the terms of the agreement or any details about it i didn’t even know what the interest rate was i didn’t even know what interest
Meant so i had my credit card and what is an eighteen year old with no sense of responsibility a ton of insecurity and no self-control do they spend it on frivolous i grew up in a town that was very wealthy and i was never one of those very wealthy people so even though i should have been happy being you know a middle-class happy family i always felt lesser than
Because of that i always wanted to keep up and a credit card to me felt like my first opportunity to go get all of those things i was never able to get at the risk of really exposing myself here i think the very first purchase i made on it was a pair of those camel colored of boots that were very ubiquitous in 2007 i essentially threw my financial future in the
Garbage for a pair of uggs so unpack that however you’d like i also use the credit card for things like restaurants with friends or overnight trips or basically anything you can think of that an 18 year old has no real business doing the point is that the credit card for me felt like this fake fairy money that i could use to become closer to the person i wanted
To be and the person i had in my head and i think a lot of people look at credit that way when we look at the circumstances that got us into the 2008 crash a huge pattern in america was living well beyond one’s means and paying for it with credit obviously me at 18 years old with a $500 hello kitty credit card is not the same as a family getting a house and two
Cars and all of the other stuff they can’t afford but it’s the same disease it’s the perception that so many of us have that there’s a person that we could be if we could afford it and i can say firsthand that that free money notion is intoxicating if you feeling secure so i maxed out my credit card and threw it away and within a few months the bills and the late
Notices and eventually the collection call started rolling in and then it became a shameful secret and that experience again mirrors a much bigger american phenomenon it varies from year to year but there are about 40% of americans who live with revolving credit card debt and i don’t mean that all of them have thrown away their credit card with no intention to pay
It but for them debt is something that they live with on a daily basis the feeling of owing money and either not paying it or not being able to pay it is emotionally crushing the collection agencies harass you the bills pile up and you feel like you’ve now got this huge secret on top of the financial burden so i avoided the issue completely and i have even looking at
My credit score for several years it wasn’t until i was 22 that i finally paid off that debt and also found out that my credit score at the time was about as low as the credit score can be it was like 400 i ruined my credit the way a lot of people do but you don’t have to totally ruin your credit to make a lot of those same mistakes the point is if your expectations
For yourself exceed the amount of money you have to pay for them you’re basically doomed to fail and more importantly if your image of yourself and your value of yourself is based on the things you can buy money won’t be able to help you over the past month i’ve experienced a couple big disappointments some of which were financial and all of them have the ability
To impact how i perceive myself and how everyone else looks at me i’m not going to lie and say that the thought of what will people think doesn’t still go through my mind but i can say that i never have the temptation to spend money i don’t have so that people will think differently of me i have several credit cards that total a pretty high limit and i’m never
Really tempted to use them emotion and bad choices caused me to ruin my credit and i can’t say i’ll never have money problems again but i can say i’ve pretty successfully taken the emotion out of them so as always thank you for watching and don’t forget to hit the subscribe button and to go to the financial diet.com for more bye
Transcribed from video
How I Ruined My Credit In Three Months | The Financial Diet By The Financial Diet
