My Personal Debt Journey

The other day I got a message from a friend asking for some more insight into one of my posts.  I have been pretty open about my consumer debt, and they wanted some advice and/or tips to getting their own head above water.  I was incredibly flattered to be approached at all, and decided I’d share more openly about my debt experience.  Because debt is a lot like assholes, everybody has one. Or some. Or… anyway, let’s move on... Debt. I have it! I have student loan debt, and I have credit card debt.  I think it’s high time we shout our debt and share with others.  Too many people are suffering in silence without realizing they’re not alone.  One in four Americans carry consumer debt with folks under the age of 35 carrying an average of $67,000.  It can seem insurmountable, but as someone who’s looked at a number just as daunting, I can share how I’ve dealt with my debt-free plan.

First of all, forgive yourself

Debt can happen for various reasons.  Sometimes, you’re starting a new business and investing more than you’re currently recouping. Sometimes you’re on lean financial times. Sometimes shopping is your anxiety relief. Whatever the reason, it’s all good.  The key is, once you realize you’re in a hole, stop digging.  Cursing yourself and the hole will not get you out of there any sooner.  When my payments were a huge chunk of my income, I remember feeling like I was punishing myself.  My self talk would be ‘Of course you can’t get that coffee, stupid, you’re in a ton of debt.  You must suffer!’  So now, I’m tired, and mad at myself for being in debt. Nice, huh?  I personally don’t believe in punishing your past financial indiscretions with years of ramen and socks with holes in them.  There is absolutely a way to get out of debt without living like a monk for years and years.  Numbers are just numbers, and money is a social construct anyway, so… forgive yourself, dangit!

Look at the Numbers
June 22, 2017.  I will forever remember that as the day I was looking at four nearly maxed out cards, and a rejection for a personal loan to cover them.  I had no buffer, no way out. I was completely humiliated. First I cried, then I looked at every credit card statement, wrote down every balance, and every interest rate.  It was a big number, but now I had a better idea of what was going on.  Some of us take the head in the sand approach to our debt, and to that I say… ‘Quit it!’ We are far too badass and brave to be scared by a bunch of numbers on the screen.  Once you know what you’re dealing with, you can better manage it.  Once you have a plan as to how it pay off, you can work your budget around that.  Decide how much of your income you’re willing to devote to debt repayment. As I said, I don’t think it’s great to force yourself to eat ramen to get out of debt faster.  Find a time towards debt-free that is balanced with a monthly payment that you’re okay with, and commit to it.  Understand that debt will not go away in a short amount of time.  It’s okay.  As long as you’re chipping away at the old block, you are making progress.
This year I had to make some financial decisions in regards to this. I wanted to be debt free by the end of the year. But I’m also saving for a wedding in January.  Doing both of these things this year would mean I had very little left for myself in the year ahead.  I made the decision to delay my debt repayment so that I could save for my wedding and still enjoy my year as an engaged lady.  Deciding how aggressive you want to be with your debt plan is personal.  Take your quality of life into account as you map your plan.

Budget!
If there is any app I could force everyone to use it would be YNAB (You Need a Budget). Created by the debt master, Dave Ramsey, it is by far the most effective budgeter.  The trick is, with this app you can’t budget for money you don’t have.  So, while allocating $200 for groceries, and $1,000 for rent is all well and good, you may not make that much in a month.  So with YNAB you can only budget with what you have.  The app also has helpful videos like ‘How to Budget When You’re Broke’ which will walk you through making a budget when you literally have to choose between rent, gas, and food.  It does cost money, but it’s WORTH IT.  My favorite is how it handles debt.  If you have credit card debt, you can set a goal for when you want your balance paid, say January 2020.  It will tell you how much you need to pay each month to achieve your goal. Any interest or purchases are added on top of that.  It’s a great way to ‘set it and forget it.’  Now, I know exactly how much I need to pay, and my debt will be gone by my decided time. The other great thing about YNAB, is that if you go over budget (which we inevitably do) you then have to pull your funds from somewhere else. So you know full well that dress at Anthroplogie is taking money from your travel budget.  And if you’re cool with that, then go for it! It is wonderfully empowering.  It also tracks the age of your money, so the more days your money stays in your account, the better off you are, the more cushion you have.

Whatever app (or spreadsheet) you wanna use, just track it. What gets measured gets managed.  Just by tracking what you spend you can better control how you’re spending it.  And again, you will go over budget.  Don’t sweat it, just move some money around and keep going.

Earn More Money
Did that make you laugh? I hope so.  I read that after googling ‘How to get out of credit card debt.’  I laughed and thought ‘Okay, but if I made more money, I wouldn’t be in this mess, would I?!’  Maybe not. But also, maybe so.  The current income from my network marketing business is solely devoted to debt repayment, and savings for my wedding.  My primary income covers everything else.  That extra bit of cash a month releases a huge chokehold on my budget, and feels damn good.  There are so many ways to earn a little side hustle money.  Etsy, Fiverr, Lyft, Network Marketing Companies, whatever.  If you want to pay off debt faster or feel like less of a slave to it, add another income stream, and make it your debt repayment plan.  I can’t recommend this enough.  Pay day is my favorite day. I immediately transfer all the money to my credit cards and wedding account. I love watching the numbers go down, and I love knowing my efforts with my online job are taking me one step closer to freedom.  Find a side hustle you can fit into your life, and go for it.  Or, if you’re in a position to negotiate a raise or add a shift to your schedule, do it.  You can spend the whole extra brunch shift reminding yourself it is getting you out of debt.  It feels good!

Money Issues?
In all of my personal development readings, money is the most loaded issue.  People have stories around money.  Stories like ‘Rich people are evil’ or ‘People in debt are idiots’ or whatever fun stuff we may have.  Take this journey out of debt as a chance to work on your relationship with money.  Money is simply energy.  If you have a negative energy around money, that will only perpetuate more of the same.  It’s why a lot of lotto winners end up losing the money so quickly.  Take a deep look at your relationship with money. It’s one of the best things you can do for your life.  Two books I’ve loved for my financial journey are ‘The Law of Divine Compensation’ by Marianne Williamson, and ‘You Are a Badass at Making Money’ by Jen Sincero.  Dave Ramsey, the YNAB creator also has great resources, but I haven’t read them yet.  Figure out how you feel about money and heal that shit.
To prove just some of the fun ways the universe can help you out when you have a good energy surrounding money, here are just a few things that have happened to me in my debt journey.  One of my credit card companies sent me an email with an advertisement for a balance transfer that said ‘0% interest for the life of the balance.'  For the life of the balance?! Say what?! I called the bank to see if this email was real, and while it was in fact a typo they honored it.  Most of my credit card debt today has 0% interest because of this email!!!!  Also, I have been absentmindedly putting money into a mutual fund every month for the last 12 years.  One day I decided to take a look at how much I had in there, and guess what—I had enough money to knock out my two worst credit card balances.  I know not everyone has a windfall like that tucked away, but you’ll be surprised where money will turn up as you take a step towards financial freedom.

Share your Debt Experience
I can still remember my father looking at me when I was young and saying ‘Whatever you do, Katie, don’t get into credit card debt. Never spend more than you have.’  And for the first half of my twenties, I didn’t! I felt so smart and so virtuous and so ‘together.’  And then… Well, I quit my job before my business had replaced my income, and then ignored my rising credit card balances until that awful day where I finally realized the financial hole I was in.  Entrepreneurs are bound to incur a little bit of debt while they build their business, but this was beyond a few big purchases here and there. I had lived in a deficit for a year in New York, and ignored it.  The only person who knew how bad my debt was was my then boyfriend (now fiancé. Yay!) He had gotten himself into debt in his younger years and worked himself out of it.  He was understanding and knew I’d get out of it.  For about a year I didn’t tell anyone else how bad it was.  I was certainly never going to tell my parents.  I had made up in my mind that my lack of debt was the ultimate sign of my success. To tell my parents I had committed the cardinal sin of overspending would be to admit failure. Failure for myself and failure of themselves as parents.  A bit dramatic, no?  What I didn’t understand about my dad saying those words of wisdom to me, is that he said them with the gravitas of a man who had made that mistake himself, and didn’t want his child to suffer through it as well.
In true Katie Bland fashion, I didn’t tell my parents until I saw a light at the end of the tunnel and had it ‘handled’—almost two years later.  They were not in any way disappointed.  They were mostly sad that I had kept it to myself and didn’t feel comfortable sharing with them.  They have been in debt, too! And not like they could have helped me out of it, but they could have understood and consoled me.  Everyone, even the ‘smart’ or ‘rich’ people around you, have probably dealt with debt of some sort.  There is zero shame in debt.  It’s something you can get out of, and it’s something you can learn from.  What a gift debt can be to learn how to budget better and fix your stories about money, right?
If you feel compelled to share your debt stories, I’d love to hear them.  As of now, I am about halfway out of my debt hole.  I have a totally doable plan, and I see a light at the end of the tunnel. I have a long way to go, but I feel empowered and in control, and that is key. I hope this has helped you navigate your own financial journey.  Now go out there and tackle that debt!

---