In the Beginning: The Pre-Debt Era

In the beginning, we had no debt. But you have to look pretty far back for this--in fact, before there was even a "we"--it was just me.

I moved out from my parents house, where I grew up, when I was about 20-years-old, and rented a reasonable sized apartment for about $1,000 per month. I was still going to college at the time, and was working at a part-time job, which paid enough to cover the rent and basic living expenses.

At that point, I had absolutely no financial worries, and the thought of accumulating some debt seemed perfectly fine. After all, my income would keep going up, and there would be plenty of time to pay things off. So, I started to make purchases without a second thought. Small, medium, large and really large.

I regularly ate out for lunch and dinner, either fast food or restaurants, most days. I bought plenty of computer and technology gear. I subscribed to the premium TV package, including an excessive amount of sports channels, for well over $100 per month. I leased a brand new sporty car for almost $500 per month. I went on several vacations, staying in nice hotels, and eating in nice restaurants. Basically, if something came to mind that I liked, I bought it on the spot.

Over the months, the balances on my credit cards began to rise, to the point where there was something like $20,000 in debt on them. I easily made the minimum payments, and didn't give a second thought to the interest I was paying, which was about 20% per year. I realized I was paying it, but oddly, was completely fine with this expense.

When I look back on this time of my life, the time when I first ventured out on my own, it is painfully obviously how easy it would have been for me to never have accumulated any debt at all. As many personal finance experts point out, not accumulating debt is all about spending less than you make (duh), and delaying purchases long enough that you always obey this rule. Oh, to have the benefit of hindsight when you first arrive in the world of financial responsibility!

But alas, lamenting the past will certainly not improve the future. And as silly as the above behaviour may seem, it pales in comparison to what comes next. More on that next time.