Thursday, January 20, 2011

Day Care Debt & Family Finance Plans

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Once upon a time, I decided to do something. My day care gave me the option of paying by check or using a credit card to charge the oh-so-incredibly-painfully-large monthly fee on a monthly basis.

The credit card I had was a rewards card. It earned miles and points based on the monthly charges. At the rate I was going to be using it, I thought I'd be banking enough miles to get plan tickets for the whole family to go on a fun vacation -- that I couldn't afford because I spent all my money on day care.

So I signed up. It was brilliant, right? It was money I was spending anyway and now I'd be getting something for me. Pat on the back for little ol' me. Since it was on a credit card if I had to, I could always carry a little over from month to month if I had to. No big deal. I could deal with the interest. Such a good idea.

At the end of every month that big day care charge hit. Sometimes I paid it all. Sometimes I didn't. I didn't worry. I'd catch up.

Then another baby arrived. My expenses went up. My cash flow went down. Interest went up. Late fees went up.

Do you see where this is going? I'm sure you do. I didn't.

In hindsight, it's all crystal clear. I was digging myself in a hole I was going to have to struggle for years to get myself out of. I'm still there. But at the time, I just couldn't see it, or maybe didn't want to see it.

Needless to say, I don't charge my day care bill any longer. If something comes up where I can't pay the bill in full, I make a point to make it up the following one. I actually don't charge anything anymore. It's too easy to charge $50.00 in groceries here and $25.00 for a school fundraiser there. I know I'm not alone in this. Credit has been too easy to get, too easy to use and too hard to recover from for a lot of people. So I'm proclaiming 2011 the year of cash. Who's with me?

Photo via bfishadow/Flickr

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