True confession! I am about to share with you a part of my life that I am not proud of, but it's a story that needs to be shared. Most of you don't know it, but for 18½ years I served as a Roman Catholic priest. In 2001, I left the priesthood in excellent standing to pursue other avenues in life. When I left however, I was deep in credit card debt. I dug myself out eventually, but looking back at my situation, I marvel at how easy it was to get into debt in the first place.
It used to be that every Catholic priest lived in a rectory, had a housekeeper, a cook and a maintenance man on premises. However, let me assure you, times have changed. Today the rectories are very often uninhabited, the cooks are gone and the maintenance man could very well be the priest himself. Clearly, the life of today's typical priest mirrors the reality of his parishioners, including the fact that it's often full of financial difficulty.
When I was ordained in 1983, I earned $8,400/year. When I left in 2001, I earned (after taxes, Social Security and Medicare) $18,000/year. Out of this salary I had to pay for my car, car insurance, life insurance, clothing and personal care expenses, not to mention an annual deduction for health and dental care. When all was said and done, I was left with an average of $11,000/year to live on, which did not leave much for pursuing more in life than sitting in my room, which some unenlightened Catholics feel a priest should do anyway. So, what did I do? I got credit, of course!
In late 1983, I was so proud to receive my first credit card from a major bank. I got the card, which had a $1,000 credit limit, through the assistance of a friend's sister, as I clearly did not qualify. I swore I would only use it for extreme necessities. However, soon after getting that first card, I began to receive offers for more and more of them. I thought, what could be the harm of having some additional credit cards? After all, I had no savings and made very little money, so the cards would provide me with a "cushion" in times of need. Unfortunately however, I began to rationalize those "times of need" as a dinner here and there, new clothes, and other "essentials."
I faithfully paid the minimum due on each card every month and was never late with a payment. In return, I was rewarded with increases in my credit limits. Remember that first credit card with a $1000 limit? It soon had a $10,000 limit. However, I did not have to use that card only because I quickly acquired twelve cards! I was credit card rich.
Ah, but then came judgment day. On the day I informed my Bishop that I was leaving active priestly ministry, I took a close look at my finances and discovered that I had accumulated more than $54,000 in credit card debt! I realized that if I stopped using the cards and paid the minimum on each, I would not be out of debt until I was 92 years of age. However, I wasn't worried. I told myself that because I was single and had no responsibilities other than taking care of myself, my credit card debt was really not a problem. And so I kept using the cards. Then, two years after I left the priesthood, I fell in love and got married. I now owed a whopping $67,500 in credit card debt and realized I was in serious financial trouble.
So I decided it was time to be an adult and climb out of the deep hole I was in. With the help of a non-profit debt consolidation organization I begin paying down my card balances. I gave myself five years to become credit card debt free and I resolved never to use credit cards again, no matter what.
Four and a half years later, I had paid off every single credit card and returned all but one to the lender. Getting to this point meant curtailing dinners out and ending elaborate vacations not to mention swallowing my pride more than once, but I knew that my wife did not deserve to live with my debt and that I did not want to be burdened by it any longer. It was about this time that I became serious about pursuing a career in the financial services industry beyond my work in banking and I began preparing to become a financial advisor. Since then, I have counseled countless clients in credit card debt to do what it takes to pay off their balances.
Today I have no credit card debt and have stayed "debt sober" for over 5 years. Yes, I've had to make adjustments in my lifestyle, but thankfully, I now make more than $18,000/year so I am able to spend money and enjoy life, although I am careful. I guess you could call me a "credit card vigilante"! As they say, there is nothing worse than a recovering whatever-it-is. So what is the lesson in my story? No matter who you are, what you do for a living, or what stage of life you are in -- stop the madness and say "no" to credit card debt! There is a far better way.
Philip Cioppa is Managing Principal and Chief Investment Officer of Arbol Financial Strategies, LLC.
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