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24

My Debt Story (Part Two): The Long Road Ahead

This is part two of a three-part series on how I got out of, and into, debt. If you haven’t already read it, go to part one here.

Namaste and Me

In the last post, I talked about how I got into debt. I also discussed the reasons so many Americans find themselves in debt and the pressures surrounding us to “buy, buy buy!” Now that we’ve seen how to get into debt, and why to avoid it, let’s talk about the choice to get out of debt and the hard work that goes into actually implementing that decision.

The Long Road Ahead

By the time 2006 rolled around I was nearly $8,000 in debt. For someone taking home around $26k after taxes, it was a seemingly unfathomable amount to owe. A co-worker lent me The Automatic Millionaire by David Bach (which he later let me keep) and I wanted to get out of debt. I read all about debt-reduction online and I bought Smart Women Finish Rich (also by Bach) and read it over and over and over and over… The problem was, I wouldn’t let go of my spending habits, or my desire to appear rich.

I was also completely attached to my job because I had to earn money to pay off the credit cards. I was a slave to my job, and it was making me miserable - despite my insistence that I loved my job. I was split in two about my job because while I loved it, it was also eating me alive. I didn’t have many choices about moving companies, though; I was only 20 and most hiring companies asked for more experience than I had.

This dilemma about my job was overwhelming and difficult for me, at 20. I LOVED my job, but it was also eating me alive, and I spent most of my days debating whether to leave or not. By mid-2006 I was making $32k/year and taking home about $27k after taxes. I gave interviews at dozens of other jobs but either I was told I needed more experience or I hated the job after interviewing for it and didn’t want to take it. There was one post in my livejournal where I talked about this and many other things I will discuss in this post. On work:

02. SGF
Work tears me in two right now. I love my job - it’s crazy, fast-paced, progressive and ever-changing, and challenging. But it’s also endlessly frustrating and complicated in ways it shouldn’t be. I’m surrounded by two kinds of people: those who know their shit and pull things off that we all thought impossible, and those who are full of BS and don’t do anything as efficiently or realistically as they should. I’m really tired of the latter, and I fear that when I move over and up, even out of this job, that in the corporate world I’m just going to be facing the same kind of idiocy over and over again. But then I think, well isn’t that the whole world? I WILL have to deal with people that are morons no matter where I go or what I do, no? Bah - and then I’m back at square one, caring about being happy with everything and at the same time knowing that there will always be annoying things that I cannot change.

I’m still hoping that maybe this [new] job [...] will happen, but that’s sort of ambiguous and slow-going right now, and I really don’t want to be counting on it. That would probably just lead to disappointment. I also don’t honestly want to start applying for more jobs right now, either. It’s such a grueling process and it will probably yield nothing anyway, and I wonder what’s the point of it all if I’m “comfortable” at my job now?

And so it went. I decided to stay at the company for then, and look for alternate streams of income instead. I started doing web-design part-time in the evenings. Remember that self-loathing I mentioned in the last installment of my debt story? Being in debt really got to my head. I am honestly very talented in web design, but I beat myself up over it and everything else nonetheless. The debt was bombarding my psyche with “you fail, you fail” all day, every day. From the same livejournal entry:

03. Web Design
This has actually taken off in numerous ways and I’m having a lot of fun. I am plagued with self-doubt though, thinking perpetually that I’m not good enough and that I’ll never find it lucrative enough to be a full-time thing. I get all annoyed with myself for thinking these things, and then proud that I think them because that leads to growth, and then annoyed again that I keep turning everything into self-improvement lessons instead of just being and seeing where things go. I guess the only thing I can do with this is keep learning and reviewing and hopefully keep getting better at what I’m doing, in the hopes that things keep going as well as they have been.

In addition to trying to earn more money (which I did), I continued to try and pay off the credit cards. Over the course of 2006 I made dozens of half-realized attempts at paying off the debt. I paid more than the minimum on many of the cards, but never enough to really keep up the rate of interest I was paying. Most of the cards I had were at 23%! And no matter how much I paid I continued to lose the race:

04. Debt
When will it finally end?! AGH! *pulls out hair*
I feel like no matter how little I spend and how hard I work to pay it off, debt goes down so slowly that it’ll never be gone. I hate this place, and I don’t want to be here. The easiest solution is to just make more money and keep paying everything I earn to the CC companies, but that brings me round to problems 2 and 3 again, and I’m lost on those two still.

In an attempt to jump-start my prosperity, I opened a Roth IRA with Fidelity. This was a good move in some ways, but instead of putting extra income on the debt, I was now sure it would be better for me to put it in the IRA. Even now, I wouldn’t call this a mistake, only a poor choice. Looking back, I know I paid thousands of dollars in interest that could have been avoided, had I decided to pay off the cards sooner.

I also didn’t stop spending, which, of course, didn’t help. Whenever I would make any progress in my debt, I would feel like I was rich again and dismiss the debt as something that was now going away on it’s own. Big mistake. I bought a couch and even financed a vacation I had planned a couple of years prior. I continued to spend at a breakneck speed whenever I got the opportunity. The problem for me was that debt-payoff seemed to take so long. And it did! But I wasn’t able to stand it.

In addition to buying big things, every couple of months I would get sick of “depriving” myself, and would go out on a shopping binge and spend a half thousand on clothes and shoes. I was filling the self-loathing void with things, and going further into debt for it.

This all culminated in a little tally I did in the fall of 2006. By my numbers, I had, in ten months, become $12,000 in debt. Alarmingly, I also figured that I had paid off almost $7,000 toward the credit cards that year. I was disgusted. And that’s when it all changed.

I met a man named Glenn on the phone, of all places, when he called into my work with a question. We clicked like *that* and decided to exchange phone numbers. After a month of phone calls, we decided to meet in person. We went to a popular Thai restaurant near his home and I rapidly fell in love with him. The relationship would end up not being realized, but what became of us was more important than the romantic relationship I would have loved to have with him: we became dear friends and close confidants.

One night after a great vegan dinner and a well-aged bottle of wine, he confessed to me that he was $200k in debt. My jaw dropped. We cried. And I told him that I couldn’t believe he could even hold his head up high. From my own experience, debt was a huge weight, and mine was already crushing me at only $12k. That night I decided to get out of debt forever.

What was a short conversation between close friends became a catalyst for massive change in my life. I wasn’t making any more money. I wasn’t immune to my cravings to spend. And I wasn’t any closer to being wealthy. What changed?

I found hope.

A Desire to Change

With a small sparkle of hope in my heart (yes, it sounds corny, but that’s what it was), I went forth into the big world with a desire for the debt to END. I quit spending. I just QUIT. It actually wasn’t that hard. But this shift was very important: rather than just thinking about frugality, I started to live frugally.

With resolve and a concrete goal in mind, anything is possible. But sacrifices are required. I found, though, that with hope, didn’t mind sacrificing anymore. I learned how to live below my means, and therefore ended living paycheck-to-paycheck.
Queen Anne Apartment I had moved in with my boyfriend the middle of 2006 (I got back together with the one I broke up with the year before) and after he moved out in the fall of 2006 (again), I was paying $1000 a month for the apartment (I kept it, he moved out). It was a gorgeous, spacious, and very conveniently-located apartment and I didn’t want to let go of it. Instead of sacrificing the apartment, I sacrificed my space. I asked my best friend Samantha to move in with me. We were both attempting to live frugally and spend less, while maintaining a life in the city.

There was a large walk-in closet off of the living room, and she moved in to the closet Because she had no real bedroom, all of her things were stored in the dining room, which I used as an art room. My space was completely gone - Samantha was usually home and her boyfriend was over often. But rather than loathing the loss of space, I embraced it the best I could. We three spent a lot of time together in 2007 after she moved in.

In addition to giving up my space to split the $1000 rent, I stopped buying anything I didn’t need. Again, I just STOPPED.

With new resolve, a plan in place, and a determination to be free, I moved into the final stage of the debt story: A Life of Frugal Abundance.

This final stage is all about finding joy in life rather than in things, and about loving yourself and making the most of your life.

I hope you’ll join me in this path to success!

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Filed Under Just My Life - Stories, Etc., Self-Help and Personal Progress, money and finance

Comments

One Response to “My Debt Story (Part Two): The Long Road Ahead”

Emily on February 25th, 2008 5:37 am

I am really enjoying your story and that you’re opening up with such honesty.

We’re a lot alike, you and I so I enjoy reading - even about your cothes I am forcing myself not to go on ebay and buy your stuff LOL

My debt figure was $12K also while making about $26K/year to pay it off.