Author Topic: "How the Pandemic Enabled Me to Pay Off $5,500 Worth of Credit Card Debt"  (Read 1929 times)

Dicey

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There is so much head-bang worthy stuff in this article! Yahoo has closed down comments, so I figured I'd drag it over here for the mockery it deserves. I can't even...

https://www.yahoo.com/lifestyle/pandemic-enabled-pay-off-5-195500850.html


Life in Balance

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I don't want to seem contrary, but it seems to me like this person is actually making headway in setting up their financial foundation.  Yes, they had credit card debt to start with, but they've paid it off by working a second job and putting their unemployment and stimulus checks toward debt and an e-fund.  Yes, they "rewarded" themselves with some purchases along the way, but spending $500 while paying off over $5000 and saving over $5000 in an e-fund seems like good progress. 

Dicey

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I don't want to seem contrary, but it seems to me like this person is actually making headway in setting up their financial foundation.  Yes, they had credit card debt to start with, but they've paid it off by working a second job and putting their unemployment and stimulus checks toward debt and an e-fund.  Yes, they "rewarded" themselves with some purchases along the way, but spending $500 while paying off over $5000 and saving over $5000 in an e-fund seems like good progress.
On the face of it, it's great, but dig down and you'll find this is not a financial redemption tale by any means. They really blew $500 on shiny shit to "celebrate"? Did you read what they got for $500? Totally unnecessary crap! (BTW, I'll bet there was sales tax, so the $500 was probably closer to $550, but what's fifty bucks to someone who is still in hair-on-fire debt?)

Note the part where their income DOUBLED thanks to federally stimulated unemployment checks?

Note they did this "amazing" thing in part by letting mommy and daddy foot their bills?

Note they still have $30k in student debt?

Basically, they saved the unexpected windfall and now they're bragging about it. You know, the windfall that the rest of us are paying for...


Life in Balance

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I don't want to seem contrary, but it seems to me like this person is actually making headway in setting up their financial foundation.  Yes, they had credit card debt to start with, but they've paid it off by working a second job and putting their unemployment and stimulus checks toward debt and an e-fund.  Yes, they "rewarded" themselves with some purchases along the way, but spending $500 while paying off over $5000 and saving over $5000 in an e-fund seems like good progress.
On the face of it, it's great, but dig down and you'll find this is not a financial redemption tale by any means. They really blew $500 on shiny shit to "celebrate"? Did you read what they got for $500? Totally unnecessary crap! (BTW, I'll bet there was sales tax, so the $500 was probably closer to $550, but what's fifty bucks to someone who is still in hair-on-fire debt?)

Note the part where their income DOUBLED thanks to federally stimulated unemployment checks?

Note they did this "amazing" thing in part by letting mommy and daddy foot their bills?

Note they still have $30k in student debt?

Basically, they saved the unexpected windfall and now they're bragging about it. You know, the windfall that the rest of us are paying for...

I caught all of that on the first read, so no digging required.  It sounds to me like a young person just out of college having to make decisions about how to fix their finances.  I work with college students.  This is some good decision-making for a recent grad.  Yes, they've benefited from unprecedented financial windfalls, but they've made the decision to mostly put that windfall toward debt.  With their normal income (very low for NYC), they would not have made this progress.  I guess I prefer to see the positive side of this case.

ixtap

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My ILs spent their stimulus check on a brand new car for their eldest. I don't know who is going to pay the upkeep and  insurance, but Grandma paid the drivers ed course so that the new car owner could get a license.

I have a lot of respect for anyone who uses a windfall to pay down debt.

bigblock440

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I don't want to seem contrary, but it seems to me like this person is actually making headway in setting up their financial foundation.  Yes, they had credit card debt to start with, but they've paid it off by working a second job and putting their unemployment and stimulus checks toward debt and an e-fund.  Yes, they "rewarded" themselves with some purchases along the way, but spending $500 while paying off over $5000 and saving over $5000 in an e-fund seems like good progress.
On the face of it, it's great, but dig down and you'll find this is not a financial redemption tale by any means. They really blew $500 on shiny shit to "celebrate"? Did you read what they got for $500? Totally unnecessary crap! (BTW, I'll bet there was sales tax, so the $500 was probably closer to $550, but what's fifty bucks to someone who is still in hair-on-fire debt?)

Note the part where their income DOUBLED thanks to federally stimulated unemployment checks?

Note they did this "amazing" thing in part by letting mommy and daddy foot their bills?

Note they still have $30k in student debt?

Basically, they saved the unexpected windfall and now they're bragging about it. You know, the windfall that the rest of us are paying for...

They could have bought dirtbikes. 

But it sounded like they got the savings bug and were able to see the results, hopefully they'll figure out to invest it and catch the compounding bug.  The pandemic has been profitable for quite a lot of people so far.

Alternatepriorities

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I'm with Dicey, the author is entirely to self congratulatory about paying off ~1/6 of their debt with a small windfall they did zero to generate. I've watched similar stories play out in person and they've all repeated the cycle. Maybe the author won't. but I don't see blowing $500 on shiny things while mooching off parents as good preparation to move back to NY and make ends meet once the easy money is gone.

Given the standard American behavior the author probably deserves some praise for not blowing the entire windfall on new things with payment plans... So I'll paraphrase Boggle, it wasn't the most effective way to use the windfall, but there are an infinite number of worse options.

mountain mustache

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Honestly I am not bothered at all by the fact that this person got unemployment, or a stimulus check, or that they used it to pay off debt.

I do think that they obviously don't want to take responsibility for the spending habits that got them in this place. In the beginning of the article it says something like " I don't have a shopping problem, or issues with spending too much money" and then goes on to state that they racked up $5500 of CC debt because of "event heavy NYC and too many brunches"....how is that not an issue with spending too much money? Those things are not required to live in NYC.

Also yeah, the $500 of useless purchases as a "treat" is also another indicator of a spending problem IMO. A dinner out for $20 to celebrate a debt payoff? Awesome! I think that is totally deserved...a $500 shopping spree? That is kind of crazy.

mm1970

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I don't want to seem contrary, but it seems to me like this person is actually making headway in setting up their financial foundation.  Yes, they had credit card debt to start with, but they've paid it off by working a second job and putting their unemployment and stimulus checks toward debt and an e-fund.  Yes, they "rewarded" themselves with some purchases along the way, but spending $500 while paying off over $5000 and saving over $5000 in an e-fund seems like good progress.
On the face of it, it's great, but dig down and you'll find this is not a financial redemption tale by any means. They really blew $500 on shiny shit to "celebrate"? Did you read what they got for $500? Totally unnecessary crap! (BTW, I'll bet there was sales tax, so the $500 was probably closer to $550, but what's fifty bucks to someone who is still in hair-on-fire debt?)

Note the part where their income DOUBLED thanks to federally stimulated unemployment checks?

Note they did this "amazing" thing in part by letting mommy and daddy foot their bills?

Note they still have $30k in student debt?

Basically, they saved the unexpected windfall and now they're bragging about it. You know, the windfall that the rest of us are paying for...

They could have bought dirtbikes. 

But it sounded like they got the savings bug and were able to see the results, hopefully they'll figure out to invest it and catch the compounding bug.  The pandemic has been profitable for quite a lot of people so far.
Yeah, personally...

If this means they "get the savings bug" and stop spending stupid money (that $500 is a one time thing, I hope), then I consider it a small price to pay, as a taxpayer, to get a young person to be financially responsible.

remizidae

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I'm going to pay off one of my student loans thanks to the pandemic. I don't think a high-income person like me should have gotten a stimulus check or loan payment suspension--and I've actuallly written to politicians to express that opinion--but hey, as long as I'm getting those benefits I'm going to take advantage of them.

By the River

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My senior in college received the $600 extra in unemployment which meant he was making more than working.  I know he bought some shares of Carnival (he worked for a contractor for them before), a couple of ETFs,  donated money to the Innocence Project and saved the rest for this year.  I pretty proud of how he handled it.   

RainyDay

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The article's author may not be the best example of how the pandemic is helping people pay off debt, but it HAS helped in some cases.  My SO just paid off his cc debt at the end of July (and I couldn't be prouder!).  He has not traditionally been great with money so this was a big step for him.

He used the $1200 stimulus check and put it toward the debt.
Because restaurants closed, he stopped eating lunch out during the day, and taking his son out to eat all the time.
Summer is usually his busy time and he's been extra busy this summer, so he put all that toward the debt as well.
Extras that we normally split (visits to wineries, dinners out, etc) were no longer happening. 

Mostly I think this has given him the awareness of where his money was actually going and that he does indeed have control over it.
He had started paying off the cc debt late last summer, but for a long time I think he had felt that it was just too overwhelming and he'd never get it paid off, so he didn't even try.  (He was no longer charging anything too it...just letting the interest charges add up.)