I’ve been reflecting on this subject for the entire last month and putting fingers to keys is long overdue.

2012 was a year of both very good and very bad for me. It included some very bad financial behavior but I learned a tremendous amount about myself at the same time. When all is taken into account, the scales of 2012 tip much more on the positive side than the negative.

The Good Stuff

Retirement: I started the year off owing $13,500 on my credit card and I decided I’d paid down enough debt (approx. $26,500) that I should start rebuilding my retirement savings. I learned a lot about investing, made modest but consistent contributions, and ended up making smart choices that ultimately delivered a 13.4% return for the year. That pretty much matched the S&P 500, and was a lot more than I expected.

Savings: I actually got consistent about saving and in addition to a baby emergency fund attached to my checking account, I also started a longer term emergency fund in a high interest savings account (PAUSE… while I smile to myself at what constitutes “high interest” these days). Although I chose to use a good chunk of the long-term fund to throw at the credit card this Autumn and the emergency fund was thankfully in place to help cover a massive medical bill at the end of the year, a good habit was established and, slow and steady, the funds are being replenished. While I’d obviously like the balances to be higher, it finally sunk in that savings go hand in hand with debt repayment so along with the consistency of the habit, this is a big win.

Debt: Surprisingly, my debt does actually fall heavier into positive recap of 2012. I learned the tools the first time I started Operation Kill Debt in 2011, but I did not learn the lesson. Although 2012 ended with me significantly more in debt than it started, it became blindingly obvious WHY I hadn’t succeeded the first time. As a result, Operation Kill Debt: Part Deux started on a much more solid and realistic foundation. Big wins for 2012 in the debt category are:

  1. Downgraded AMEX card from Platinum to Green; received refund on ridiculous annual fee.
  2. Aside from a couple of travel expenses that were already in the works and hit at the very beginning of October, no credit card use since the end of September.
  3. Cancelled all remaining auto-pays of expenses to credit cards; eliminated the unnecessary expenses, set the rest to deduct from checking. No charges have been made to any card since November 23.
  4. Cut up ALL credit cards (this is technically my biggest and proudest achievement of 2012, but I’m going in chronological order here…).
  5. Reduced outstanding credit card debt from $52,371.30 on September 23 to $38,775 on December 31.

As ridiculous as this sounds, I would rather be in the position I am now – owing $38,775 on the credit cards – than had I just paid off the $13,500 that I owed at the start of the year. The latter outcome would have left me in a much more vulnerable position, as I hadn’t acknowledged that credit cards MUST be eliminated from my life. I needed to feel some pain and some failure to put me in a better place for long-term success.

Hi, my name is Ha’penny Bits and I am a compulsive spender who cannot manage credit. Period.

Employment: This is a post unto itself, but for now I’ll just say I overcame a lot of fear and anxiety and proved to myself more of who I am and what I CAN do, rather than stressing over who I’m not and what I can’t. I also got to travel a lot, see new places in the world, as well as meet some fantastic new people along the way.

Health: I completely overhauled my diet and began consistent exercising in 2012. I implemented these changes to improve my overall health, physical fitness and mental wellbeing. It worked and it became yet another habit that’s stuck.

The Bad Stuff

This section is going to be short because there is no benefit to excessive dwelling on past behavior or handing over a lot of time and energy to regrets.

Debt: Goes without saying that running up my cards AGAIN was not a good decision. I have a closet – hell, make that a house – full of stuff that feels stifling, and my current and future self will be paying for all that shit for the next two years. Side note: eBay sales began in 2012 with many more to come in 2013.

Savings: Precariously low balances, which is even more scary as for the first time in 17-years I can’t reach for a credit card to use in case of an emergency (although that’s a big YEAH!!).

Retirement: Pitiful retirement savings for someone in her mid-30’s.

In summary, I acknowledge my mistakes but feel blessed that a course-correction occurred and I continue to take steps to rectify my situation. And with that, 2012 will always be remembered fondly.