Debt: Getting in and getting out

A bunch of years ago, I worked for an IT department at one of the big five Canadian banks. It was probably the worst job I have ever had and I lasted about eight months.

As soon as I got there, they explained to me about the awesome perks of staff banking – no fees and the offer of a huge, unsecured line of credit at the bank's prime interest rate. I was making more money than I had ever made before (or have ever made since) and like a fool, I accepted their offer of the giant line of credit. 

Falling in, Crawling out

I racked that line of credit up about halfway - paid it off - and then racked it right up to the hilt. The money went to tuition when I was in school in Toronto, it went to rent, taxes, emergencies, meals out, trips and all kinds of "wotthehell" moments. 

I can be quite undisciplined about money. I'm in good health, I see many working years ahead of me and I have no dependents or other pressing responsibilities. This encourages me to throw my money around - I love feeling open-handed and relaxed about money. I come by this honestly, since my family is full of people who fit the description: "last of the big-time spenders". We are generous to a fault. This is something I rather like about us. It's really fun to live that way. But when the money behind that lifestyle is borrowed money, there's a dark side.

After I quit that job at the bank, the interest started to climb. They put it up and up, and with the balance climbing as well, it all got more and more painful. Eventually, it has come to feel like the proverbial albatross. 

In over my head

I'm not going to reveal the shocking amount that I owe, but suffice it to say that I've spoken to many telephone bankers over the years who are simply amazed (and probably appalled) when they realize that my line of credit is not secured against a house or other asset.

The bank bet only on my honesty and sense of responsibility when they loaned me that money. And it was a good bet. I borrowed that money in full, adult knowledge of what I was doing and I'm committed to paying it back. I got myself in and I'm going to get myself out again.

This time for keeps. 

This year, I made a plan to reduce my debt by 5,000 bucks every year until it is gone. And to protect myself against my own profligacy, I am going to have the bank reduce the limit on my line of credit by that amount each year. Hilariously, I have to fill in paperwork to ASK the bank (perhaps BEG would be a more appropriate word) to reduce the limit. Please don't let me borrow any more money from you. PLEASE!

I wasn't sure I was going to be able to fulfill my goal this year. As usual, I've made some less-than-responsible decisions with my money lately. But, work and decreased living expenses, in combination with a surprise gift from one of my generous family members, has put me in a position to meet my goal. Tomorrow morning I have an appointment at the bank to fill in the paperwork that will relinquish five grand of borrowing power. I'm painfully aware that that could be a massive trip or a down payment on a small Nova Scotian house. However, I'm also aware that I'm paying about half that amount in interest each year for the privilege of being so far in the hole.

Here's to debt freedom, folks! Five grand at a time!

How's your household debt situation? Any plans or resolutions to get out of the hole? Feel welcome to share your thoughts in the comments.