When easy money was at its height, newly divorced Maggie McGuane found herself unable to get credit. Now she counts it as a blessing in disguise.
Photographed by Kurt Markus.
Almost six years ago, sitting at my kitchen table, I was listening to a financial guru on the radio bemoan the fact that banks were operating far too fast and loose with their lending practices. The forecast for a downturn blared from the radio through my bare house, furnished with a few hand-me-downs—a velvet sofa, two rattan porch chairs, a lovely kitchen table bought from an antiques shop on sale because someone had carved a Social Security number into it. While the rest of America was apparently enjoying an orgy of spending, pulling into their driveways in shiny new cars and fixing up second homes bought using mortgages with 5 percent interest rates, I felt like I was sitting at home on a Saturday night while all the popular people were at a glamorous cocktail party.
The coming recession forecast by the money whiz had visited me ahead of schedule. Newly divorced, I had just moved out of a sprawling ranch with a guest cabin, a train caboose/guesthouse, and a cast-iron bathtub that looked out the window onto hundreds of acres of grassland, and into a foursquare house on a busy street in my small Montana hometown. Now I had neighbors opposite who liked to drink beer for breakfast (they were often very thirsty after a night of screaming obscenities at each other) and decorated their yard with empty Happy Meal boxes. My evenings were spent trying to coax the family dog away from their dropped French fries.
Sitting in grim judgment of my situation was a small piece of plastic: I had just applied for and received my own first line of credit, in the form of a Capital One credit card. It had become a canvas for my imagination—in my daydreams I'd already made a thousand make-believe purchases, expensed plane tickets to exotic locales, and slipped the card to waiters in far-off restaurants after six-course meals. These thoughts were pure fantasy. The spending limit on my credit card was $500.
How I came to have less money—and less still available to borrow—is now of little interest to me. I am not a saint or a martyr. It was of great interest to me back then, and I spent many hours stewing, conniving, self-pitying. Suffice to say that the end of my marriage is central to the story of my own financial crisis. Divorce breaks the hearts of men and women time and time again, but nothing in the end is more damaged than their bank accounts.
There were other contributing factors, none of them particularly unique in the narratives of the newly insolvent—a child with a chronic illness, plenty of impulsive purchases, and the habit of leaving a pile of mail unopened by the front door. Nor did I have role models of frugality to draw on: My mother, who raised me with both an excess of funds and socialist-leaning ideals, likes to joke that she considers wealth the way most view bacterial infections—to be gotten rid of, before it has a chance to grow. By the time I finished high school, her money was gone. And so I sat in my empty house, listening to my $19.95 radio from Target, realizing that my Capital One card, which once seemed to hold so much promise, was maybe not so great. The euphoria of casual credit was over for me.
Five hundred dollars was actually very generous, if not a little irresponsible, on the part of Capital One. At the time of my application I had no job, no savings, and debt from the power company to Denver Children's Hospital to Barneys—as I mentioned, I am neither saint nor martyr. Even more damning, I had no history of employment. Raising a family doesn't leave much in the way of a paper trail.
Wasn't I entitled to an endless stream of borrowed money to buoy me through these hard times? How was I ever going to get back to life on a ranch, or at least a little cottage out of town away from my scrapping neighbors, when a mortgage was unattainable? How was I supposed to pay my share of the visit to yet another medical center with my daughter to treat the symptoms of her vascular disorder? Wasn't that, at the very least, my right?
These questions weighed heavily on me, but my greatest burden was not the bad credit or the medical debt or the cost of living. I was weighed down by an oppressive sense of entitlement. My expectations brought chronic disappointment. Clearly, I needed to reappraise them. This realization was the first big blow that would mark the beginning of the end of my affair with the almighty dollar. Until my personal credit crisis, money had romanced me with promises, like a bad fairy-tale prince riding up on a big white steed offering the world on a silver platter. What I discovered was that he was a ne'er-do-well charmer who had no intention of sticking it out through thick and thin.
And so, just like anytime one gets rid of a deadbeat boyfriend, I mourned the loss for a little while, moping around and longing for what I once had, and then I moved on to a better relationship. I had two young children to raise, a daughter and a son, whose nerves were as jangled as mine every time the phone rang and they would hear me yelp, "Don't answer that!" when the caller was identified as "unavailable," which we all knew to be a bill collector. They, too, saw the growing pile of unopened mail in the hall and knew those weren't friendly letters piling up. I also had a new (real) relationship with a local firefighter and the two adolescent sons who came with him, all of whom had managed to sidestep the mania for acquiring the unneeded. My boyfriend teased me about my "champagne taste" when my budget was decidedly beer.
I realized I had to take action in short order. Initially, I set out on a series of adventures in a futile attempt to raise more capital. I started my own retail business, a little shop in town selling a carefully edited mix of gifts, housewares, and clothing that I had lots of fun buying, but it at best broke even. To increase my inventory and make it more profitable would have required investment funds I didn't have. I attempted to sell a field adjoining my old ranch that was deeded to me in my divorce agreement, but a lone offer got tangled in red tape and fell through. I hired a baby-sitter and went to work on a movie set assisting the makeup artist—a job that consisted of applying ChapStick to the lips of 100 extras, but my child-care costs exceeded my take-home pay.
In lieu of significantly increasing my income, or winning the lottery, I needed to learn how to "make do," a concept so entirely out of fashion that the phrase connotes English war brides or repressed 1950s housewives. There was that empty house to make into a home. There were family dinners to prepare, first for three, then six. Most important, there was the task of creating a life going forward that was just as rich and full as it had been when money was more plentiful.
Luxuries I'd once deemed necessities, from organic baby greens to face lotion from the depths of the ocean, were placed back in the category where they belonged. I was forced to admit that although I wanted some things very much, I was not entitled to them. A running ledger of needs versus wants was kept in my head, and sometimes I struggled to sort through the list. Did I really have to repair my worn-out fence? Did I need to travel to New York for writing work? Did my children need to stay in private school?
My town, where a significant number of kids live well below the poverty line, is a pretty tough place to feel sorry for yourself just because a full kitchen renovation is not in the forecast. And it's not as though I had nothing—my household budget, including child-support payments, was probably not that different from what I spent when I was comfortably married, minus the groovy assets like the ranch, the housekeeper, the vintage jewelry (I sold it). But without my ex-husband and his earning power, the notion that there was more where that came from was gone. Below the surface ran a swift current of fear. My cracked tooth and subsequent crown turned the family finances back into a downward spiral. The mail, which I now opened regularly, still made my stomach twist up, particularly if the return address was from a medical institution. My safety net, even if it was an imagined one, was no longer in place.
Slowly, my focus shifted from getting money to spending less—I had to save if, in a pinch, I couldn't borrow. The transition was not always smooth, and on occasion feelings of regret and of opportunity lost (to save money, to get ahead) overwhelmed me. For years, I'd acquired things that I not only didn't need but didn't much like after they were acquired. These former objects of desire now reproached me from the linen drawer, the kitchen cabinet, and the closet. A pair of boots from a shop on Rodeo Drive, bought the year my marriage collapsed, once whispered to me from my shelf, "You are not a frumpy mom; you're a glamorous sophisticate." Now, every time I reached for my tennis shoes, they shouted at me, "What were you thinking? That money could have paid for two months' worth of groceries!"
Looking back did not serve me, so I forged ahead with the task of trimming our expenses. Some budget cuts were relatively painless—nobody was bothered when we stopped eating out regularly on weekends. Other decisions were harder to swallow. My biggest expenditure to confront, both financially and emotionally, was my children's education at a private Montessori school. Tuition, at about $500 a month per child, constituted more than a third of our monthly budget. Over the course of an entire summer I spent dozens of hours on the phone to other parents on both sides of the fence, and heard everything from "Go hungry before you sacrifice your children's education!" to "Stop being such a panicked snob; you're not sacrificing anything!" Ultimately, economics won out over emotion, and in mid-August, I enrolled the kids in public school. They loved it from day one. Their teachers were as excited about the learning process as any I'd ever met in expensive private schools. Sure, there weren't as many field trips to museums or feel-good community-service projects, but I learned to improvise. We went to the museum as a family on rainy Saturdays, and the kids enrolled in a junior volunteer program at the local Humane Society. I spent more time reading to them in the evening—made easier, I'll admit, by the fact that I'd had our cable service shut off. No longer resting on the notion of "I am paying for their education, therefore it must be good," I became a more attentive parent, and with all the extra money in our checking account, a more relaxed one, as well.
Every little thing helped us to save, and so I toiled at mastering the family budget like a jigsaw puzzle—trying different pieces until I found the ones that fit. I turned the thermostat down, way down—there's a photo of our last family Thanksgiving in which we're all wearing our coats at the dinner table. I stocked the Deepfreeze with homemade pesto and handpicked mushrooms and local game so we weren't tempted by an empty fridge to eat out. I bought in bulk and in season—salmon from a neighbor with an Alaskan fishing business, honey from a beekeeper down the valley. When gas prices soared, I rode my bike to the grocery store. When heating costs rose due to deregulation, I started heating the house with wood. My boyfriend and I installed the chimney by ourselves after Googling instructions. In fact, the Internet was my tool for repairing all sorts of things: my vacuum, a faulty drain system, my fence. In place of money spent, my children and I now spent time together, making brittle in the kitchen for Christmas gifts, growing raspberries in the summer, canning jams and jellies in autumn.
I did not, however, become a total ascetic. I still crave beautiful things; I just wait a little longer to get them. When I visit New York, I always make a point of stopping at Ted Muehling's shop downtown, and had long admired a pair of delicate, articulated gold cross earrings. In a previous era, I would have charged the $300 the first time I tried them on, and worried about paying for them later. Instead, I had plenty of time to decide that they were a necessary indulgence. When I finally bought them last summer, the saleswoman was as thrilled as I was and clapped her hands in delight when I put them on and walked out onto the street.
Eventually, I realized that I had taken charge of my destiny. It felt like achievement. My part of the medical debt was chipped away at like an iceberg until the last little remnants melted into infinity. Some lucky breaks—including, finally, the sale of my field—allowed me to gain a foothold in my savings. I went to work as a substitute teacher at the local high school, going to class in the morning, cup of coffee in hand, in a sensible knee-length denim skirt from the Gap and those nagging boots from Rodeo Drive. My family still travels and eats good food and celebrates—but often our alfresco meals are alongside a river, not a boulevard. Our vacations include tents, not hotel suites. The kids have lost the worried looks on their faces, and I have gained a new identity as someone who "makes do" very well.
Toward the end of this transformation, a photo crew from an interiors magazine came to take pictures for a lifestyle page. (A friend of mine worked at the magazine, and they needed regional participants.) They'd traveled from New York, where the recession was still unforeseen, and they were surprised by my ingenuity. Looking around at my now full house, they used words like crafty and quaint to describe it, words I'd once cringed at but now tried to wear like a badge of honor.
The feeling that I was missing a big party still lingered. I looked at the photographer, in her thick, cabled cashmere sweater and beautifully draping trousers, with some heartache. For a moment, I was chagrined by what I couldn't have. Comparison is lethal to contentment, though, and I fought off the urge to measure my well-being against that of others. Instead, I practiced the art of reveling in what I did have—two wonderful kids, a charming home, some very lively neighbors, whom my dog absolutely adored—and packed the entire photo crew off for a swim at a spot in the river where hot water flowed into the icy current. They were enchanted.
As the recession grinds on and working families are forced from their homes, I realize how lucky I am. Had I not been pushed into a cash economy, I have no doubt I'd be at high risk for losing my home. My diminished possibilities are now negligible when compared with those of many Americans, and I no longer envy people with credit and a sky-high spending limit. The two-inch by three-inch reminder that blessings come in the least expected packages, my $500 Capital One card, is still the only credit card in my wallet. Steadier satisfaction now comes to me from a life under control.
Photo: Maggie McGuane, center, in Montana with her children, Maisie, ten, and Charlie, seven.
"Reality Check" has been edited for Style.com; the complete story appears in the July 2009 issue of Vogue.
The coming recession forecast by the money whiz had visited me ahead of schedule. Newly divorced, I had just moved out of a sprawling ranch with a guest cabin, a train caboose/guesthouse, and a cast-iron bathtub that looked out the window onto hundreds of acres of grassland, and into a foursquare house on a busy street in my small Montana hometown. Now I had neighbors opposite who liked to drink beer for breakfast (they were often very thirsty after a night of screaming obscenities at each other) and decorated their yard with empty Happy Meal boxes. My evenings were spent trying to coax the family dog away from their dropped French fries.
Sitting in grim judgment of my situation was a small piece of plastic: I had just applied for and received my own first line of credit, in the form of a Capital One credit card. It had become a canvas for my imagination—in my daydreams I'd already made a thousand make-believe purchases, expensed plane tickets to exotic locales, and slipped the card to waiters in far-off restaurants after six-course meals. These thoughts were pure fantasy. The spending limit on my credit card was $500.
How I came to have less money—and less still available to borrow—is now of little interest to me. I am not a saint or a martyr. It was of great interest to me back then, and I spent many hours stewing, conniving, self-pitying. Suffice to say that the end of my marriage is central to the story of my own financial crisis. Divorce breaks the hearts of men and women time and time again, but nothing in the end is more damaged than their bank accounts.
There were other contributing factors, none of them particularly unique in the narratives of the newly insolvent—a child with a chronic illness, plenty of impulsive purchases, and the habit of leaving a pile of mail unopened by the front door. Nor did I have role models of frugality to draw on: My mother, who raised me with both an excess of funds and socialist-leaning ideals, likes to joke that she considers wealth the way most view bacterial infections—to be gotten rid of, before it has a chance to grow. By the time I finished high school, her money was gone. And so I sat in my empty house, listening to my $19.95 radio from Target, realizing that my Capital One card, which once seemed to hold so much promise, was maybe not so great. The euphoria of casual credit was over for me.
Five hundred dollars was actually very generous, if not a little irresponsible, on the part of Capital One. At the time of my application I had no job, no savings, and debt from the power company to Denver Children's Hospital to Barneys—as I mentioned, I am neither saint nor martyr. Even more damning, I had no history of employment. Raising a family doesn't leave much in the way of a paper trail.
Wasn't I entitled to an endless stream of borrowed money to buoy me through these hard times? How was I ever going to get back to life on a ranch, or at least a little cottage out of town away from my scrapping neighbors, when a mortgage was unattainable? How was I supposed to pay my share of the visit to yet another medical center with my daughter to treat the symptoms of her vascular disorder? Wasn't that, at the very least, my right?
These questions weighed heavily on me, but my greatest burden was not the bad credit or the medical debt or the cost of living. I was weighed down by an oppressive sense of entitlement. My expectations brought chronic disappointment. Clearly, I needed to reappraise them. This realization was the first big blow that would mark the beginning of the end of my affair with the almighty dollar. Until my personal credit crisis, money had romanced me with promises, like a bad fairy-tale prince riding up on a big white steed offering the world on a silver platter. What I discovered was that he was a ne'er-do-well charmer who had no intention of sticking it out through thick and thin.
And so, just like anytime one gets rid of a deadbeat boyfriend, I mourned the loss for a little while, moping around and longing for what I once had, and then I moved on to a better relationship. I had two young children to raise, a daughter and a son, whose nerves were as jangled as mine every time the phone rang and they would hear me yelp, "Don't answer that!" when the caller was identified as "unavailable," which we all knew to be a bill collector. They, too, saw the growing pile of unopened mail in the hall and knew those weren't friendly letters piling up. I also had a new (real) relationship with a local firefighter and the two adolescent sons who came with him, all of whom had managed to sidestep the mania for acquiring the unneeded. My boyfriend teased me about my "champagne taste" when my budget was decidedly beer.
I realized I had to take action in short order. Initially, I set out on a series of adventures in a futile attempt to raise more capital. I started my own retail business, a little shop in town selling a carefully edited mix of gifts, housewares, and clothing that I had lots of fun buying, but it at best broke even. To increase my inventory and make it more profitable would have required investment funds I didn't have. I attempted to sell a field adjoining my old ranch that was deeded to me in my divorce agreement, but a lone offer got tangled in red tape and fell through. I hired a baby-sitter and went to work on a movie set assisting the makeup artist—a job that consisted of applying ChapStick to the lips of 100 extras, but my child-care costs exceeded my take-home pay.
In lieu of significantly increasing my income, or winning the lottery, I needed to learn how to "make do," a concept so entirely out of fashion that the phrase connotes English war brides or repressed 1950s housewives. There was that empty house to make into a home. There were family dinners to prepare, first for three, then six. Most important, there was the task of creating a life going forward that was just as rich and full as it had been when money was more plentiful.
Luxuries I'd once deemed necessities, from organic baby greens to face lotion from the depths of the ocean, were placed back in the category where they belonged. I was forced to admit that although I wanted some things very much, I was not entitled to them. A running ledger of needs versus wants was kept in my head, and sometimes I struggled to sort through the list. Did I really have to repair my worn-out fence? Did I need to travel to New York for writing work? Did my children need to stay in private school?
My town, where a significant number of kids live well below the poverty line, is a pretty tough place to feel sorry for yourself just because a full kitchen renovation is not in the forecast. And it's not as though I had nothing—my household budget, including child-support payments, was probably not that different from what I spent when I was comfortably married, minus the groovy assets like the ranch, the housekeeper, the vintage jewelry (I sold it). But without my ex-husband and his earning power, the notion that there was more where that came from was gone. Below the surface ran a swift current of fear. My cracked tooth and subsequent crown turned the family finances back into a downward spiral. The mail, which I now opened regularly, still made my stomach twist up, particularly if the return address was from a medical institution. My safety net, even if it was an imagined one, was no longer in place.
Slowly, my focus shifted from getting money to spending less—I had to save if, in a pinch, I couldn't borrow. The transition was not always smooth, and on occasion feelings of regret and of opportunity lost (to save money, to get ahead) overwhelmed me. For years, I'd acquired things that I not only didn't need but didn't much like after they were acquired. These former objects of desire now reproached me from the linen drawer, the kitchen cabinet, and the closet. A pair of boots from a shop on Rodeo Drive, bought the year my marriage collapsed, once whispered to me from my shelf, "You are not a frumpy mom; you're a glamorous sophisticate." Now, every time I reached for my tennis shoes, they shouted at me, "What were you thinking? That money could have paid for two months' worth of groceries!"
Looking back did not serve me, so I forged ahead with the task of trimming our expenses. Some budget cuts were relatively painless—nobody was bothered when we stopped eating out regularly on weekends. Other decisions were harder to swallow. My biggest expenditure to confront, both financially and emotionally, was my children's education at a private Montessori school. Tuition, at about $500 a month per child, constituted more than a third of our monthly budget. Over the course of an entire summer I spent dozens of hours on the phone to other parents on both sides of the fence, and heard everything from "Go hungry before you sacrifice your children's education!" to "Stop being such a panicked snob; you're not sacrificing anything!" Ultimately, economics won out over emotion, and in mid-August, I enrolled the kids in public school. They loved it from day one. Their teachers were as excited about the learning process as any I'd ever met in expensive private schools. Sure, there weren't as many field trips to museums or feel-good community-service projects, but I learned to improvise. We went to the museum as a family on rainy Saturdays, and the kids enrolled in a junior volunteer program at the local Humane Society. I spent more time reading to them in the evening—made easier, I'll admit, by the fact that I'd had our cable service shut off. No longer resting on the notion of "I am paying for their education, therefore it must be good," I became a more attentive parent, and with all the extra money in our checking account, a more relaxed one, as well.
Every little thing helped us to save, and so I toiled at mastering the family budget like a jigsaw puzzle—trying different pieces until I found the ones that fit. I turned the thermostat down, way down—there's a photo of our last family Thanksgiving in which we're all wearing our coats at the dinner table. I stocked the Deepfreeze with homemade pesto and handpicked mushrooms and local game so we weren't tempted by an empty fridge to eat out. I bought in bulk and in season—salmon from a neighbor with an Alaskan fishing business, honey from a beekeeper down the valley. When gas prices soared, I rode my bike to the grocery store. When heating costs rose due to deregulation, I started heating the house with wood. My boyfriend and I installed the chimney by ourselves after Googling instructions. In fact, the Internet was my tool for repairing all sorts of things: my vacuum, a faulty drain system, my fence. In place of money spent, my children and I now spent time together, making brittle in the kitchen for Christmas gifts, growing raspberries in the summer, canning jams and jellies in autumn.
I did not, however, become a total ascetic. I still crave beautiful things; I just wait a little longer to get them. When I visit New York, I always make a point of stopping at Ted Muehling's shop downtown, and had long admired a pair of delicate, articulated gold cross earrings. In a previous era, I would have charged the $300 the first time I tried them on, and worried about paying for them later. Instead, I had plenty of time to decide that they were a necessary indulgence. When I finally bought them last summer, the saleswoman was as thrilled as I was and clapped her hands in delight when I put them on and walked out onto the street.
Eventually, I realized that I had taken charge of my destiny. It felt like achievement. My part of the medical debt was chipped away at like an iceberg until the last little remnants melted into infinity. Some lucky breaks—including, finally, the sale of my field—allowed me to gain a foothold in my savings. I went to work as a substitute teacher at the local high school, going to class in the morning, cup of coffee in hand, in a sensible knee-length denim skirt from the Gap and those nagging boots from Rodeo Drive. My family still travels and eats good food and celebrates—but often our alfresco meals are alongside a river, not a boulevard. Our vacations include tents, not hotel suites. The kids have lost the worried looks on their faces, and I have gained a new identity as someone who "makes do" very well.
Toward the end of this transformation, a photo crew from an interiors magazine came to take pictures for a lifestyle page. (A friend of mine worked at the magazine, and they needed regional participants.) They'd traveled from New York, where the recession was still unforeseen, and they were surprised by my ingenuity. Looking around at my now full house, they used words like crafty and quaint to describe it, words I'd once cringed at but now tried to wear like a badge of honor.
The feeling that I was missing a big party still lingered. I looked at the photographer, in her thick, cabled cashmere sweater and beautifully draping trousers, with some heartache. For a moment, I was chagrined by what I couldn't have. Comparison is lethal to contentment, though, and I fought off the urge to measure my well-being against that of others. Instead, I practiced the art of reveling in what I did have—two wonderful kids, a charming home, some very lively neighbors, whom my dog absolutely adored—and packed the entire photo crew off for a swim at a spot in the river where hot water flowed into the icy current. They were enchanted.
As the recession grinds on and working families are forced from their homes, I realize how lucky I am. Had I not been pushed into a cash economy, I have no doubt I'd be at high risk for losing my home. My diminished possibilities are now negligible when compared with those of many Americans, and I no longer envy people with credit and a sky-high spending limit. The two-inch by three-inch reminder that blessings come in the least expected packages, my $500 Capital One card, is still the only credit card in my wallet. Steadier satisfaction now comes to me from a life under control.
Photo: Maggie McGuane, center, in Montana with her children, Maisie, ten, and Charlie, seven.
"Reality Check" has been edited for Style.com; the complete story appears in the July 2009 issue of Vogue.
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