I’ve been writing about private finance for over a decade. I know how to come up with the best budget, all the “right” tactics for saving for emergencies, and the complex contribution regulations for 401(k) and 529 savings plans. . And yet, in my career as a money editor, I went into debt twice.
I found it difficult to share my debt story publicly. But I’ve learned that one of the most productive tactics for readers is to share not only the wisdom I’ve gained, but also the mistakes I’ve made and the classes I’ve taken. I’ve learned. I also hope it alleviates the stigma surrounding debt and inspires others to communicate their own experiences.
Ready? This is my story.
It was 2004 and I had just graduated from school, ten years away from becoming a financial editor and without any private finance education despite my degree. (Financial literacy deserves to be a key component of our curriculum, but that’s a talk for another time. ) I had a vague feeling that credit card debt was “bad,” but it was very easy to put that plastic in and around it, especially when I didn’t perceive the risks of compound interest. One night here, a new outfit there: about $20 each, each purchase seemed minor at the time. But those “small” acquisitions totaled about $10,000 in debt.
After graduating, I temporarily learned that my starting salary wasn’t enough to cover the debt I had accumulated. I stayed afloat with minimal bills for a few years, thinking I was doing the right thing, but eventually found that I was stuck in a never-ending cycle of growing interest and didn’t know how to get out of it.
Making only minimal bills on your credit card balance is “like wanting to eat a bowl of rice with chopsticks, one grain at a time,” said Todd Christensen, director of education for Money Fit, a nonprofit debt relief program. your abdomen is empty at all times. “
Christensen added that it can take 15 to 25 years to get out of that debt if the minimum amount owed is paid, and that can lock you into a debt loop like the one I experienced.
I needed help, fast. I signed up for a payment plan with a nonprofit credit counseling organization, and over the next few years, I paid off my debt diligently. I also paid off my car loan. When the last payment was made, I felt excited and in a position to use the cash I had freed up to temporarily pay off the last debt my then-husband had also accumulated.
Then it happened.
Without warning, my husband’s physical condition deteriorated. He was diagnosed with a chronic illness and had to stop working. She applied for disability benefits, a procedure that can take years, and in the meantime, her medical expenses were mounting. I stopped writing and editing. The task was to resume my old career in the legal field, placing myself in a company that provided me with a greater source of income but also bad pressure.
The strain of keeping our house afloat exacerbated some of my own fitness issues, and after months of trying to make it all work, I had to take short-term disability leave. Before we knew it, our emergency savings were gone, and the debts I had worked so hard to be transparent began to pile up again.
I felt like a fraud and a failure. I had done a lot of things “right” and yet we were one again.
Looking back, there’s something you may have done differently. I may have created a bigger emergency fund instead of spending all my extra money on paying off my debts as temporarily as possible. I may have simply kept my old job, rather than going back into the legal field, which is less lucrative but better for my intellectual health. I may have also discovered less difficult tactics to make ends meet, such as dedicating myself to painting aspects when I had the time.
But the fact is that anyone can face debt, even if they have met all the requirements. A single expensive medical bill is enough to ruin your finances. And if that happens, the best path forward is to have the right equipment to get back on track.
Right now, I’ve consolidated my existing credit card debt into a private loan with a low APR and I’m paying it off aggressively. I’m also taking steps to put myself in this situation, no matter what happens in the future. But if I go back into debt, I now have better methods of dealing with them.
That’s how I pay my debt differently.
We are simply human, which means we make decisions that are not perfect. AndArray life has the power to derail even our best-laid plans.
Alaina Fingal, owner of The Organized Money and a member of CNET’s currency review board, said that for many of her clients, debt is the result of “a major life event: job loss, medical emergency, death of someone who was offering a source of income. “income for your family. And then that misfortune comes because you feel like you deserve to be able to get by. But it’s not just that you’re bad with money.
If you’re struggling with your finances, no matter how you’ve been hit here, blaming yourself for it doesn’t help. In fact, it can make things worse and leave you more isolated. Instead, what can you do now to recover?Know that you are not alone.
I became so focused on paying off my initial debt that I didn’t put enough cash into our emergency fund. If we had had the 3-6 month expenses that the experts proposed saving for, it could have given us the wiggle room we needed. Think again about our scenario when my husband gets sick and expand a larger course of action.
Now, I’m making a concerted effort to build up my emergency savings and pay off my remaining debt. To free up the budget needed for this purpose, I check out every trick in the frugality playbook, from situations that demand savings to joining my local Buy Nothing group. Things will seem a little tense for a little longer, but in the end, it will be worth it.
Financial fitness does not exist in a vacuum. Your physical and intellectual fitness can have a huge effect on your ability to earn money and make money decisions, and it can also lead to expensive medical bills. While there’s nothing you can do to avoid chronic disease, you can invest in your overall fitness by acknowledging your limitations and not sacrificing your self-maintenance for excessive goals. If you don’t, it can hurt your finances for years to come.
The fact that cash is a taboo subject for many other people (and women in particular are less likely to feel comfortable talking about it) can make it difficult to stick to our financial resolutions. Many other people, I’ve learned to embrace the noisy budget philosophy. I still haven’t found anyone to judge me because I wanted to be more frugal. In fact, most people admit that they do better doing the same.
“It turns out that on social media a lot of other people have noticed, but in reality, other people pretend to have it all figured out,” Fingal said. “I don’t think we have enough conversations about this procedure or this trip. We’re seeing stories of good fortune explode, and they’re very engaging and funny, yet the slow process of budgeting each month or living within your means is rarely as much fun or as popularized, so it turns out that everyone gets by. “
I also learned that sharing your currency struggles, not just your monetary goals and victories, can be invaluable. I was embarrassed to admit the full extent of my situation to my friends or family, but letting in a few trusted people may have simply reduced my tension and helped me think of better solutions. Even if I hadn’t felt comfortable with it, there are plenty of teams and online forums that I might have turned to to feel less alone.
“We have a lot of judgment when it comes to debt, and in the afterlife we’ve had a lot of money educators who have shamed us and made us feel like it was our fault that something happened or that we weren’t prepared for this. situation-specific life event,” Fingal said. It’s caused more people to withdraw and not talk about it, and a lot of other people are going through the same thing. “
When it comes to paying off debt, the most productive strategy for you depends on your financial situation. Some people use private loans, some use credit counseling agencies, and others use balance transfers. The important thing is to find the solution that works best for you. It fits into your current budget and helps you eliminate your debt temporarily without hurting your current and long-term monetary goals. You shouldn’t feel bad about employing one strategy over another – the vital thing is that you take steps to improve your monetary situation.
In the meantime, be kind to yourself. You’ll be surprised how many other people find themselves in a situation.
The editorial content on this page is based solely on objective and independent evaluations by our editors and is not influenced by advertising or associations. It was not provided or solicited through a third party. However, we may get a refund when you click on links to products or presented through our partners.
CNET’s editors independently decide each and every product and service we cover. While we can’t review every single corporate or monetary offering available, we try to make thorough and rigorous comparisons to highlight the most productive ones. From those products and services, we earn a commission. The refund we obtain could affect the appearance of the products and links on our site.