What if the Recession never happened?

Two and a half years ago I was a mess. I had no savings account. I had no emergency fund. I spent every dollar I had and then some. My credit card was maxed. I “got by” on fortuitous gifts of money from family. Every dollar I got I spent just as soon as it hit the checking account. Mostly because I had gotten myself so deep in to debt that each dollar went to debt payment before my paycheck could even clear.

I had to open up a new line of credit for every emergency, simply because I didn’t have any cash to pay for any of these things.

My only back up in case of hard times was about $25,000 in stocks and mutual funds that I hesitated to touch.

A great thing happened to me about the point where I had maxed my credit card, taken out 4 other lines of credit, and would finish up the last two weeks of each month with maybe $20 for the entire two week period because of my debt: The Recession.

I know that most people probably think of the down turn of the economy as a terrible thing to happen. But for me, financially, the recession was in fact the single best thing that could have happened. My stocks and mutual funds took a huge dip and suddenly I didn’t have enough money in them to pay off my debt anymore. My $25,000 in investments were now only worth $13,000 (and dropping).

Realizing I was worth less than I owed scared the crap out me. And I began to reconsider how I viewed money.

Anyone reading this blog for a while knows that this journey hasn’t been easy and it hasn’t been quick. But I’ve been able to save large sums of money for my emergency fund, to move, for a wonderful vacation with my grandmother. And best of all I’ve started to actually turn myself around.

When I started this blog I was “worth” a negative $18,779 – and went another $2,000 lower in the 3-6 months that followed because of the economy. Two and a half years later I’m approaching the $0 mark (I’m currently at -$2,932). This is a huge amount of change on my part.

I know that recessions are supposed to be bad things. I know that I’m supposed to hope for economic growth and recovery. But this recession has been the best thing that ever happened to me. I was forced to take control of my finances. I was forced to face my debt. I was forced to change my lifestyle. And I’m so glad that I did.

What if the recession had never happened? I wonder how long it would have taken me to figure all of this out… if I ever did. How much more debt would I have gotten before I finally caved? A lot more I’d imagine. A lot.

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12 Responses to What if the Recession never happened?

  1. Yay for taking a setback and turning it into an opportunity!

  2. 2blu2btru says:

    I feel the opposite way, lol. I was always focused on getting rid of my debt as soon as I got out of school. I had a plan to ensure I didn’t increase my expenses (i.e., stay in cheap apartment housing and keep my car) until I’d at least significantly lowered my debt. But I graduated in the recession, so I didn’t have the great job opportunities a bachelor’s degree should have afforded me (which were already pretty modest, considering my area of study and the fact it’s still just a bachelor’s). Even without expanding my expenses in areas I could control, I started out (and continue to be) upside down in all debt repayment goals. I blame the recession for scaling down my opportunities significantly (doing away with the growth in teaching, hitting the already beleagured publishing market, and with failing banks making it impossible for me to catch a break financially or qualify for anything, it crippled me). I work in a position anyone with a high school diploma or GED could get because it was the best I could find in a state especially hit hard (FL). I like the benefits and the job, but I could have started a few positions up making thousands more in better times.

    I’m glad the recession was a good thing for someone, though.

  3. In every cloud there is a silver lining. Love this post.

    The recession made me buckle down too.

  4. laura says:

    Love this too…..here’s to crossing the zero line 🙂

  5. Jen says:

    Realizing that my net worth was in the negatives was also what woke me up to my $29,000 debt. What was scary was that I fooled myself into believing I was good with money the whole time I was happily acquiring this debt.

    Good luck crossing the zero line!!

    http://www.shebloggs.com/

  6. Pingback: Money on my Mind Part II: When Life Gives You Lemons… « Indigo Moods

  7. eemusings says:

    Man, oh man.

    It brought me nothing but heartache. It knocked T entirely off a career path, set us back financially, saw him unemployed during the most stressful final year of my degree.

    It couldn’t have come at a worse time.

  8. Serendipity says:

    The recession sucked for me and my company. Rambo lost his job, couldn’t break into his would be career field. But, it did make me realize how wasteful I was being and how I needed to shape up with my reckless money ways.

  9. Mercedes says:

    Here’s to moving into the black! Hopefully a lot more of the population can say the same!

  10. LBC Teacher says:

    I totally agree! Mine happened because I got a layoff notice, which was eventually rescinded. But, it was a shock to realize I had not savings and lots of debt…not a good combo when you’re facing joblessness.

  11. People are gonna hate me… But I don’t think the recession affected me much compared to other people. I was more stressed and there was a lot of pressures from work but financially I wasn’t any better or worse.

  12. Revanche says:

    The recession was incredibly aggravating and fairly destructive to my portfolio but since I was already used to working under fairly straitened conditions, the biggest impact was probably that I had a much harder time when I was looking for a new job. That may not have been the worst thing in the world, I ended up in the right area instead of NYC to be with PiC full-time which is actually a really great thing for us. I didn’t realize how important it would be until we realized it worked very well for us.

    I’m still trying to figure out how to overcome the career/salary setback, though. These were what I considered my prime earning/ladder climbing years and taking steps backward at this stage worries me about the long-term effects.

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