Way back in June, I asked whether any of you would be willing to have your photos on the cover of PARADE. I needed “credit card stories” — real life thumbnails that would help me make vivid for PARADE’s 41 million households the pitfalls and possibilities of credit card use.
You were terrific, time has marched on, and Sunday, if your local paper carries PARADE, several of you will see your beautiful selves on its cover or in its pages.
But as generous as PARADE’s editors were in allotting space to this story, many of your stories didn’t make the cut. Which pained me, because many of them were so interesting or instructive — or just compellingly “real.” (How often do we get to look into a stranger’s wallet?)
In 1985 Paul and Cher Jakubowski had about 20 credit cards. They were living large but didn’t think they had a problem. Indeed, they were paying more than the required monthly minimums on all the cards — and feeling “smugly responsible” about that. They both had good jobs (he’s a tech support manager, she’s a pre-school teacher), and one of the last things these Texans worried about was money. “Whenever we needed something,” says Paul, “we called for a credit increase. And since the bank(s) always gave it to us, we figured we could afford whatever they’d ‘give’ us.”
One month, though, one of the bills looked awfully high. Paul asked Cher how much she had “spent on the credit cards.” (That’s how they thought of it at the time — they “spent on the cards” rather than on the goods and services the cards bought.) “About $350,” guessed Cher. But Paul got out his calculator and found that her spending had totaled over $800 that month. His own had topped $600.
“Now, I’m not a stupid person,” says Paul (whose Mensa Membership number is 1134149), “but some things come slowly to me. Even though no one had ever taken the time to teach me about money, I could tell that spending $1,400 when we would have estimated $750 was out of line.”
He bought one of those early computer software money-management programs (using a credit card!) and was amazed. “Once I got done setting it up and looked at our ‘Net Worth’ for the first time,” he says, “I lost my breath. We had a NEGATIVE Net Worth! I couldn’t believe it.” But there was no arguing with the dismal picture it painted. They went on a budget. “It felt awful not to be able to buy whatever we wanted whenever we wanted and just sign our names. It was excruciating to cut up all but two credit cards. That was almost like putting a beloved pet to sleep — our self image was so tied up in the ‘status’ they conveyed.” Fortunately, both their careers continued to progress, and after three or four years, the cards were paid off.
Today, they keep just two credit cards, a Discover Private Issue that they use for everything they can, and a Visa for the rest. They charge everything possible — from groceries and gas to college tuition. Discover’s 2% cash rebate comes in March of each year.
“The financial freedom we now enjoy is in stark contrast to where we were, and where we would be today if we had not come to our senses and put our affairs in order. Today, a budget is about possibilities, not constraints, and credit cards are mere tools to achieve those possibilities rather than status symbols of an irresponsible way of life.”
If you can, check out this Sunday’s (November 1) PARADE.
Next week: some more of these stories.
Quote of the Day
What's so fair about eliminating the interest deduction on your first car but not on your second home?~Murray Weidenbaum
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