An Uptown lifestyle built on credit cards

Holly Lesmeister is young and single, and she earns a respectable salary of about $35,000 as a graphic designer. Problem is, she's $64,000 in debt.

Her money woes started in college and have worsened in recent years with a tendency toward BCBG dresses and pricey dinners with friends.

Now, Lesmeister, 30, says she's ready to change her free-spending ways. Top on her list of dreams: buying a condominium.

Lesmeister graduated with $50,000 in loans, some at interest rates as high as 10 percent. She had tried a different school and a global-studies major before settling on graphic design at Arts Institutes International Minnesota.

She ate, shopped and traveled her way into credit-card debt, including taking trips to Central America and to Rome. But most of the total came from her $300 monthly fashion habit. At the mall, she'd pull out the plastic to buy French Connection shirts, J. Crew pants, or those BCBG dresses.

Sometimes she'd leave a store unaware of what she'd just spent. Credit cards make it easy to "spend blindly," as she calls it. She says she'd think: " 'Oh, I'll put it on the credit card now and then I'll pay it down' and it never actually happens and you have all these credit cards everywhere."

Lesmeister also is accustomed to eating appetizers and drinking crown sours and vodka tonics at places like Auriga, Duplex, and Solera. But she had no idea how much she was spending until she and her boss printed out her debit card transactions and added up the tabs. Her monthly food and drink total, including groceries, came to $400 per month, an amount Lesmeister calls "ridiculous."

After a night out, she and her boyfriend enjoy going out for breakfast, but "only on weekends." Fast food will not do. A recent meal she shared at Duplex with her roommate cost her $30. She knew she couldn't afford it, but it was "worth it."

Part of her problem is location. Although her share of the upstairs duplex she rents is only $450, its central Uptown location means easy access to stores, bars, and restaurants.

But part of it is her friends. "I know we spend a lot of money going out all the time," she says. "The group I run with -- that's what we do." What they don't do is talk money. Lesmeister says they'll often complain about being "broke," but they never seriously discuss finances and she figures some of her friends are better off than she is, some worse.

Her monthly discretionary spending can add up to as much as $700. Her current monthly savings is less than a tenth of that amount.

She has built up $14,000 in credit card debt. Until recently, some cards had interest rates of 20 percent. Then her dad learned her rates and "he freaked out," she recalls. "He says that 30 years ago, [20 percent interest] would have been considered criminal." Today, interest rates of as high as 30 percent are charged.

In July, her parents stepped in and consolidated her credit card debt onto a single card at 8 percent interest in her mother's name. She's still responsible for the balance, for which she currently pays just the $230 minimum. She tries not to use the cards anymore, but paying only the minimum means she won't mail in her last payment until 2013.

On Wednesday, Holly meets with Minnetonka financial adviser Echo Huang, who says Holly needs to choose between her long-term goals and her lifestyle.