I’ve been in spiraling debt for the last three years. I moved to a new city where the cost of living was much higher than I’d ever experienced. I worked less after this initial move, draining my savings and maxing out credit cards. When I took a full-time job, the pay was far less than I’d expected and between taxes and my own poor management I was living paycheck to paycheck. I was in school part-time. Three years ago, I had less than $2,000 in student loans. At the peak of debt in mid-2017, I was approaching $20,000 in debt, and that was just combined credit card and personal loan debt. Student loans were rapidly accruing.
I never regretted my big move because my life really changed and I love who I’ve become, but I had lived beyond my means for the entire time and had yet to find my place or purpose. Like most early-twenty-somethings in an entry-level job, I hated it but had become complacent. I knew what I wanted to study in school to finish my degree and decided that the first step towards feeling okay about abandoning the corporate ship was to start managing my money and work on my debt.
In September 2017, I started researching debt tactics which was actually pretty interesting. My parents are in dire straits financially and have been for years. No advice for or example of financial security was given. I grew up just assuming I’d be good with money when I had some, which turned out to be very wrong. This sub was one of the first places I poked around, and the information was incredibly enlightening to say the least. I wanted tangible advice as well and borrowed How to Get Out of Debt, Stay Out of Debt, and Live Prosperously by Jerrold Mundis. I really liked the AA-style mantras, the casual tone, and the emphasis on what prosperity actually means. (Some might find it hokey–you have to buy into it.) Across the board, though, the initial advice was the same: find out how much you owe and stop debting.
I can’t stress how different my finances are eight months later. Some things I did to help boost my progress:
- Wrote down (in excruciating detail and in multiple notebooks, computer files, etc.) exactly how much I owed and to whom as well as assets, credit score info, credit limit. The whole shebang. It took an entire afternoon and was so painful. It’s not really a problem until you see and comprehend it. This was the biggest catalyst for change and surprisingly emotional for me. I really had no idea how much money and my debts had been affecting me. (At the time I would’ve first pointed to relationship issues, job dissatisfaction, family strife, etc.)
- I stopped debting. This is the advice I saw everywhere. So simple, so effective, but so difficult if you think of your available credit limit as income like I did. I had four credit cards and each was maxed out when I started to address my problem. I was really enticed by the rewards systems, but I can’t tell you how many times I cashed in my reward money to pay down the balance. So I just stopped using them. I thought about cutting them but instead tucked them away. (There’s a part of me that hopes I’ll be responsible enough in the near future to use them again, but I can’t chance it now.)
- Stopped debting from myself. No more dipping into savings! Sheesh.
- Speaking of saving, I started doing so, even when it was only $5 or $10 a month. At this point I don’t have a formal savings account–just mattress money–because previously I couldn’t keep from touching my savings account. That’ll be my next big step forward.
- Made a fun Excel sheet to track my spending and income. It sounds silly, but having a well-functioning and appealing spreadsheet made me excited about entering my expenses and income. It’s now a daily habit.
- Upped my payments to creditors to be above the minimum, even when I’m strapped and it’s only by a few dollars. Initially, I didn’t think paying two or three dollars more would make a difference, but over time (and by looking at nifty amortization tables) I’ve seen the impact.
- Cleaned out my room (including my clothes) to see what I could part with. It’s not that I had a lot of expensive stuff, I just had things I didn’t need. Some of them were reminders of my earlier reckless spending. So I sold, gave away, or donated them.
- Started going to therapy. Luckily I receive this service for free at my university, but I would happily pay for it. Like I said above, I had no idea how much of a grip money had on my life, even indirectly. This helps.
- I cheated a little to stop the bleeding: a family member paid off my worst credit card to stop the 24.99% interest on a several-thousand dollar balance from accruing. I still make monthly payments, but now they’re to him and mercifully interest-free.
- To expand on the above, I ‘fessed up and told people what I was dealing with. Not everyone, mind you, and not all of the details, but I got over my pride and told close friends and family that I had debt to pay off. Just putting it out there helped so much and it made it feel like more of a real responsibility that needed to be addressed. Debt can be so isolating, which seems wrong considering that most everyone is shouldering some.
My journey’s not over, but I’m currently under $12,000 in non-student loan debt! I’m still working on budgeting–for whatever reason setting and keeping to a budget has been hard to stick to, which is weird because I’m more than happy to track my spending, I just haven’t been strong-willed in setting it. But beyond having a clear picture of my finances and finally feeling in control, I’m motivated to work on money management because of how positively the rest of my life has been impacted. I know what school will cost and can work to offset that debt now, while I’m still exempt from making payments. My boyfriend and I are planning for our third trip in just this year because we worked and scrimped and saved money for realistic adventures. I not only see a light at the end of the tunnel, but I also see that the road to a $0 doesn’t have to be as scary or deprived as I initially believed and that in the long run, my decisions are helping me build the future I want.