Dirty Debt Secrets, Part 2- Conquering Debt

In Part 1 of Dirty Debt Secrets I shared my personal story of how I got in over my head with credit card debt. It’s never something we consciously set out to do, but without proper monitoring and having a budget in place it can easily get out of hand. Before we know it we’re drowning our sorrows in a bottle of wine on the couch wondering how we could have been so careless. I am very much still in the process of my debt payoff, but have noticed what key things helped me make some major progress. So put the bottle of wine down and log into your account because it’s time to tackle that outstanding balance! Yea it sucks, but you know what’s worse? Not doing anything about it.

How I’ve Been Conquering My Debt Payoff

Read this book, no seriously read it.

If you’re facing debt issues, both big and small, then Dave Ramsey’s “The Total Money Makeover” is a must-read for you. In this book he offers no-nonsense advice and strategies for how to manage and pay down your debt. Best of all, it’s packed full of success stories from people in WAY worse situations than you, so you can feel a little bit better about yourself along the way. One of my favorite strategies of his is the Snowball Method, which is especially effective when your debt is coming from a few different places and not just one source. Instead of tackling all outstanding debt sources equally, or focusing on the one with the highest interest rate first, Dave recommends putting your most efforts into the smallest amount of debt first. Pay that off, then move onto the next smallest, adding the amount of $ you were paying on first one now to the next source of debt. By starting with the lowest amount of debt first and working your way up it allows you to have mini wins along the way. Obviously keep paying ALL of your debt bills each month, but really focus in and pay in as MUCH as you can to that one with the smallest balance. I used this method since my non-student loan debt was located in a few different places and it really helped me to stay motivated. Nothing feels better than seeing that $0 outstanding balance, it only hypes you up to put as much as you can toward the next source so you can get that next win. Since starting the Snowball Method I completely paid off two different sources of debt, and I’m telling you, it’s addictive. I am now down to my one last area of non-student loan debt, and in the last 6 months have paid off 70% of it. It is actually exciting now to drop a few hundred $$ after a paycheck onto my credit card and see that balance jump down more and more.

Start Saying No and Decrease Your Social Spending

Remember in Part 1 when I mentioned how no one likes to be the cheap friend, the one who has to say no? Well it’s time for you to embrace your frugalness and the word no! If you want to make REAL progress in paying off your debt then you won’t be able to do all the things your friends do, wear the latest fashion trends, or drive a nice new car-  and you need to start being comfortable with that. Each time you stay in instead of going out, just order 1 drink instead of 4, or turn down an invite to a concert, that’s more money in your pocket to put towards getting rid of that debt. If your friends are true friends they will fully understand and support you. If they don’t understand and still pressure you then they suck. Kidding, but not really kidding. When I was still living in Atlanta one of my close friends and I loved just chilling on the couch on a Saturday night with a bottle of wine together. WAY cheaper than going out, we didn’t have to spend money on uber, and we got to be in our PJs.

Pretty much any night where you can get drunk with good company in your PJs and barely spend money is a fantastic night as you get older.

Decreasing my social spending also became a lot easier when I came back from Europe and was no longer living in the city. I was living with Stephen, about 35 min outside of Atlanta, and our days were usually made up of work, cooking at home and just spending time together. I would still get into town, see friends and have a social life- but it was less frequent and a hell of a lot easier to spend less when I wasn’t living so close to all the fun. I could no longer just uber from home for a night out, which meant I had to drive, which also meant I had to limit the amount of drinks I ordered. All of those factors together made saving money on social spending a much more doable task for me.

Reevaluate Your Rent Choices

A huge influence on the success of my debt payoff came from giving up my apartment and no longer living on my own. Rent and all the bills that came with it were my biggest monthly expense followed by my student loan payments. Rent is usually most people’s biggest monthly payment, and if there is anything you can do to decrease it then definitely consider it. I had already gotten rid of all my furniture and 70% of my ‘stuff’ before traveling overseas, so when I returned it made staying with Stephen an easy transition for both of us. Stephen teases me now because when we first started dating I said I was NOT going to live with a boyfriend, it’s even more funny now that I live across the world with him. But in the long run it made sense to break one of my ‘rules’ in exchange for a long term financial advantage. I am not saying everyone should go move in together, seriously don’t even consider it if you can’t see this person as a lifelong partner, but sharing the burden of living expenses can help a lot so you can put more money towards debt. Another option is living with a family member, even if it’s just for 6 months or a year, so you can make those bigger payments. After Stephen moved back to Australia I lived with my mom for a few months until my move so I was able to continue with the higher debt payments. I couldn’t believe I was living with my mom again at almost 30 years old, even if it was only temporary. But sometimes you need to swallow your pride and get creative with options for cutting large costs. The year I spent not having my own place saved me over $12,000 which I was able to use elsewhere. Not too shabby. If these are not doable options for you then look at how to still decrease your living expenses- ditch the cable and just rock the Netflix, move a little bit out of town or get a smaller place where rent is cheaper, get a roommate instead of living by yourself. There are always ways to cut costs, you just have to be a little creative and get outside your comfort zone. It’ll be worth it in the long run.

 

Having an understanding and super supportive partner.

I could not have asked for a better support system than my boyfriend Stephen. I remember before I opened up about my debt situation with him, I felt like it was this major baggage I was embarrassed to ever mention. Have you seen the episode of ‘How I Met Your Mother’ where Lily doesn’t want to tell Marshall about all the CC debt she’s been hiding? Yep, that’s how I felt. I thought exposing this secret about myself would be a total turn off. I’m sure no one WANTS to date someone in debt (especially credit card debt), it’s way easier to be with someone with no money baggage. We talked about it a little, but later into our relationship we started to have open discussions about it- exactly how much it was and what to do about it. His influence, money outlook and support has been the #1 thing that’s helped me come this far. Stephen is the perfect example of someone living within their means. Like me, he didn’t have someone to pay for his education or support him during those young adult years, but the way he handles money is something I aspire to be like. I mean for crying out loud we’re talking about a guy who lived off of $1,200 total for 3 months while traveling around France and Spain surfing, living in his car. He doesn’t believe in spending money he doesn’t have, to the point where it’s slightly annoying sometimes. He does have credit cards now, but it is solely for gaining points to use for flight purchases and he only charges to the card if he has the money waiting in his checking/savings account. Definitely the way a credit card should be handled.

On a recent trip to Melbourne Stephen and I were talking about future vacations (I know right, talking about the next vacation while on vacation). He is also a travel addict and maintains a separate savings account just for traveling, because you know, he’s responsible and stuff. He said I should look at my budget and think about how much I could actually afford to set aside each month for future trips, no matter how small, so we could figure out finances together. I told him it really doesn’t make sense for me to put anything aside for traveling, at all, until my credit card debt was GONE. If in the next few months he wanted to go somewhere, he would just have to go alone. For me to say that was a huge step forward. He was really proud of me, and together we worked out a way for me to be 100% CC debt free by the end of 2017. The plan includes me completely cutting out ALL unnecessary spending- no shopping for the house, no buying clothes, getting my nails done, eating out, nothing until the debt was gone. All of my income right now is going toward regular bills (phone, student loans, health insurance, etc), setting aside just a tiny bit for necessities like gas, and then everything else goes towards the credit card. Seem pretty hardcore? Kind of, but the way I am looking at it is it’s short term pain for an amazing long term gain. Stephen is completely holding me accountable for this commitment, and having someone who knows my situation and who supports me without judging has been key for keeping me on track.

 

Get a Debt Gym Buddy

You know how they tell you having a gym buddy will make you go to the gym more often than if you were attempting to go all on your own? You have someone checking in, asking you to join them and holding you accountable. Make someone in your life your debt gym buddy. For me that person is Stephen for sure. Your partner is the perfect person to be your debt gym buddy since they are already such a big part of your life. If you haven’t already, open up to them about your situation and ask them to be there to cheer you on and support you when you’re feeling like giving up. If you’re living the single life consider confiding in a close friend or family member- let them know what you’re dealing with and that you want their support with making it happen. I also confided in a few close friends of mine when I decided to get really serious about my debt and it felt really good to be transparent. If you and your partner are both in similar debt situations, then you already have your debt gym buddy! Just make sure you are both staying accountable instead of going back down the rabbit hole together.

 

Get a Side Hustle

Side hustles have become a growing trend these days. So many people have them and it’s a fantastic way to earn extra cash when your salary is limited by one employer. All those years I was working full-time for one company I almost always had some sort of side hustle to increase my overall income. Over the years I’ve had side jobs for graphic design, social media, marketing-  I even went back to waiting tables at some point for a couple nights a week. It can get exhausting, commuting, working an 8 hour day, and then having to work more at night or on the weekends… but it’s worth it in the end. You can choose to either use that side income only for debt payoff, or use the extra money for your regular spending so you can put almost all your main income toward debt. I’ve kind of flip flopped over the years how I’ve structured it, usually in the past the extra income was used for traveling or something I didn’t actually need. My first international trip to Costa Rica with Under30Experiences was paid for by side projects. Since I left the 9-5 and started working for myself the side hustles and main income kind of all got mixed into one- my business. But I still have my main regular clients which support all of my living expenses, student loan payments and credit card payments. But now the little, not-so-regular projects are all going straight toward, you guessed it, the credit card!

 

Hitting $0 and Moving Forward

This coming New Years will be a milestone for me because it will be the first time in many years I’ll be starting a year with no credit card debt. That goal alone is what makes shutting down any little spending thoughts that creep into my head so much easier. I am dying to decorate my new home office, to get a few more lamps and pieces for the house, and OMG my nails look like sh!t and need a professional makeover. But it’s these small choices to say no and put my money elsewhere that is making it possible for me to be done with the CC debt at the end of this year. Once that balance hits zero and my next paycheck comes in you better believe I’ll be at the nail salon and buying some damn throw pillows. But after this year my debt journey is still not over unfortunately. Next up is the student loan debt, which I will tackle full force. Okay, so I probably won’t be quite as hardcore about cutting spending as I’ve been lately, but my goal is to double my monthly payments to speed things up. And when that day comes when I am completely, 100% debt free, O what an indescribable feeling it will be.

Dirty Debt Secrets, My Story- Part 1

Credit card debt is like a dirty little secret we carry around with us and don’t want anyone to know about. Like if we don’t talk about it it’s almost like it doesn’t exist. On the surface it looks like we have our sh!t together and life is grand. But in reality, we cringe everytime we have to face our account balance- we have no extra money and the thought of fully paying it off feels impossible.  It wasn’t always like that though- at first we felt in control, only really spent what we had or what was on its way, and paid it off each month. Then our budget gets tighter, emergencies pop up we don’t have the cash for, we get used to seeing a regular CC balance and start only paying minimums each month. We thought we were more responsible than this and could manage things better, then the feelings of shame and disappointment settle in. I have gone through this and felt this way for years now until finally I was ready to face my secret head on.

In this post series I am going totally transparent with you to share my own experience and advice on overcoming. I realize this is opening myself up for criticism and being viewed as irresponsible, a failure, immature, the list can go on. But I know I am not those things, even though certain choices I’ve made in the past may have been. Everyone makes mistakes, it’s how we reflect on them, make changes and grow in a positive direction from them that shows who we are. I hope this resonates with anyone who has found themselves in a similar situation, and if you aren’t making changes already make this your “sign” to do so.

Some of you may be thinking, OOO so that’s how she went off traveling through Europe! I can proudly say that trip was completely paid for by me, no credit cards allowed. By that time I was already frustrated with my debt situation and was determined to not let the amazing Europe experience be tainted by the regret of more debt later. I was extremely frugal 90% of my time overseas and spent cash I actually had. I could have eaten out WAY more, gone to the bars at night, done more shopping or stayed at nicer places. I treated myself once in awhile, usually my last night in a city, but day-to-day I was a total cheapo! If you think you need a lot of money to travel Europe, you’re wrong.

My Dirty Debt Story

Like so many others I already had/have student debt from college. I’ve been working since I was 15 (technically 12 if you count babysitting) have been 100% on my own since I was 18, put myself through college, paid for all my art supplies (can you say $$$), my own rent and all of my own bills. I used to be jealous of friends of mine whose parents were able to put them through school, who didn’t graduate with a huge burden on their shoulders, who didn’t know the feelings I was feeling. Maybe if I had that I wouldn’t have been so tight financially and wouldn’t have been “pushed” into “needing” a credit card to get me by (notice the quotation marks because it’s total BS what we tell ourselves sometimes). First of all jealousy is a wasted feeling- we are all different and you should never hold negative feelings towards others who are simply in a different situation than you. Second of all, instead of feeling sorry for myself I should have been feeling proud, how freaking badass was I for making it happen all on my own all those years. I remember calling my mom for money ONCE- I was $50 short of making rent and had no other option. Another time I almost ran out of gas driving, I had no money to get gas until I worked again waiting tables. The only money I had was a tiny amount in a savings account I only had access to via a written check, which gas stations don’t take. I didn’t have a smartphone yet to transfer money right then and there, I just sat there in the parking lot feeling helpless. Luckily my car made it home, barely, and I was able to transfer some cash from my computer and get refueled. Definitely some poor planning and a learning experience. While it was hard, really hard sometimes, I look back now and see how it pushed me to be resourceful, a really hard worker, to be more determined, and it instilled in me that your life is YOUR responsibility. But towards the end of college and after, when I should have really been budgeting, I made a different decision.

When I first got my credit card it had a $800 limit and for a while everything was just fine. Now it has a $14,000 limit, even though I never asked for or approved a limit increase. At some point I should have told them to stop periodically increasing my limit, but I ignored it and just let it happen. I got to the debt breaking point when it reached around $10k and knew I couldn’t continue to block it out of my mind. I don’t even want to know how much interest I have paid now, it would just be depressing. I would say around 25% of the debt came from things I genuinely needed but didn’t have the money – things like mechanic bills to fix my car and keep it running. The rest, it amazes me how so many small things can get out of control. If you know me personally you know I am not strutting around in the latest fashion trends, designer clothes, perfectly manicured from head to toe,  or have a nice, new car. So where did all the money go?

After college I got my first Jr. Designer job, and was slowly climbing that designer ladder (which as you can probably guess usually is not a high paying one by any means, until later… maybe). I learned quickly if I was going to be as successful as I wanted I would need to push my career path into another direction, but more on that later. A few years later I got my own apartment and was roommate-less for the first time. I have such mixed feelings about this now- on one hand living alone was one of the best experiences for me. I absolutely loved it and feel during that time I learned so much about myself and really grew into my own. In a lot of ways I became someone I am truly proud of during that time. On the other hand, I was not financially ready, and so the snowball of debt seemed to pick up speed from there. I already was carrying some CC debt that wasn’t paid off beforehand, now add on all the expenses of living alone, with a less than impressive income, while keeping almost the same spending habits- not a good recipe. I really don’t regret living on my own, but I should have had a well constructed, strict budget instead of ignoring it.

I 100% got accustomed to and was maintaining a lifestyle I could not afford yet. It’s the dinners and drinks with friends at cool places around town too many times, buying a round of drinks when I had no business doing so, taking uber too often, going on a few little trips and paying for airfare, car rentals and dining out.

Shopping a little and telling myself because it’s cheap and it’s a deal it’s fine, when in reality, it’s NOT a good deal when you’re charging it to a credit card you have no ability to pay off.

None of it was extravagant, but when you’re in CC debt anything extra is outside your means. No one likes being the cheap friend, the one who has to say no. The one who maybe should eat at home before going out and just come out for a beer instead of that o-so-yummy glass of N.Z. Sauv Blanc you really want… which is twice the price of a beer… which you order anyways… and then order another… and then maybe another. At some point something’s got to give when you’re living outside your means, but at the time I was not ready to give it up yet.

When the debt reached around $10k and I started to be honest with myself about the problem I was in the midst of transitioning my career into what I really wanted. Working for myself remotely, with freedom to take the business wherever I chose instead of being confined by an employer- waiting for that next step up or the next little raise. Also around this time I was preparing to leave for 3 months in Europe. I am sure many would wonder how I could been considering going to Europe at all in my situation, but I had this overwhelming need inside of me to experience the world. I knew I could always use money as an excuse to not go and it would never happen. I made sure I was so careful to do it without the help of credit cards and working remotely along the way made that possible. I made a promise to myself for those 3 months abroad I would keep my minimum payments going, but when I returned my focus was getting rid of that debt and changing my lifestyle. Literally the best decision I ever made- the trip changed me, added so much richness to my life beyond any amount of money, and I returned feeling so fulfilled and ready to knuckle down.

While overseas I remember feeling so disgusted and frustrated by the amount of money I was being drained of by debt each month. Partly the credit card but also the student loan debt- just all of it. I was robbing myself of feeling successful because so much of my income was gone immediately. I would think about all the things I COULD be using my earnings for, but I had to pay off my bad choices before being able to live that way. In part 2 of Dirty Debt Secrets I’ll be sharing with you what has truly helped me make big changes towards CC debt payoff, and debt payoff in general.

Have you found yourself lost in the debt downslide? Are you in a similar situation now and continue to ignore it? Maybe your debt is much smaller than mine was, maybe it’s WAY bigger. Regardless though make this your time to start making positive changes in your life to rid yourself of that burden. Comment below with a declaration of change for accountability, or reflect, be honest with yourself and stay tuned for Part 2.

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