I’m in pretty serious credit-card debt. I owe $15,000 across nine different cards, which basically started accumulating when I applied for my first card as a college freshman. I’m not alone: 73% of Americans die with debt — an average of about $62,000. But admitting I’m underwater is something with which I’ve only recently become comfortable.
I’m 30 years old and have been living in the red for over a decade while many of my friends and peers have been saving for or buying homes, taking regular vacations, and earning six-figure salaries. I had hoped to be where they are now by my 30th birthday. Instead, two years ago, I dropped everything to start a new career without a safety net or plan. A tidal wave of roadblocks has prevented me from achieving my financial and professional goals in the past few years, namely six surgeries and the subsequent effect on my mental health and ability to work, but my money problem began long before the hospital stays.
From the age of 14, I’ve always held down a job, beginning with babysitting and working the counter at a local bakery. My parents made it clear that I was responsible for funding my social life, as well as essentials like gas money and train fare. I was taught to be responsible, not frivolous. If I wanted the $100 jeans instead of the $30 pair, I had to make up the difference. While understanding the need to pay for nonessentials on my own stuck with me through college, my ability to pay for them did not.
I attended a prestigious college for both my bachelor’s and master’s degrees, with tuition for six years costing $300,000. The university gave little in the way of financial aid and scholarships, neither of which I qualified for, anyway. I was extremely fortunate in that my parents were able to cover tuition (everything else was on me). Unfortunately, college was where I started to become obsessed with keeping up appearances, which I definitely couldn't afford. It wasn’t rare to see a student lugging a $3,000 handbag to class, overflowing with books and stained with ink from leaky pens. Nearly every night of the week, I joined friends at clubs with hefty covers for drinks that were as expensive as they were weak. Participating in these outings also required a variety of wardrobe options. I couldn’t keep up. I needed a credit card.
On top of charging my nights out, I began adding hundreds of dollars worth of clothing to my card. I also developed a habit of shopping any time I suffered a blow to my self-esteem. Spending became so closely tied to my self-worth. But it was a farce.
As I aged, my bank account dwindled. I began suffering panic attacks when I looked at my credit-card bills, so I ignored them. I continued buying $18 cocktails and $200 jeans.
I began suffering panic attacks when I looked at my credit-card bills, so I ignored them.
Then my cards started getting declined. By not looking at my statements, I fooled myself into thinking they’d just pay themselves. Instead, they were incurring monthly interest and late fees. When you’re trying to keep up with your financially stable friends, trying to use a maxed-out credit card is mortifying. Even if they’re not judging you — most of the time, my friends were kind enough to cover me until I could pay them back — it’s an awful feeling to be denied.
Around the same time my debts imploded, I started to incur massive healthcare bills. I had insurance that covered the majority of my procedures, but between steep premiums for the fancy insurance I now required and the high deductibles, I was drowning in bills for something I actually needed. Something needed to change; I couldn’t wait to win the lottery or land a high-paying media job because, let’s be honest, those don’t really exist.
I stopped socializing because I simply could not afford to and ate a lot of instant ramen. Instead of crawling into my hole of shame and online shopping, I finally admitted I had a problem. I sold my furniture and moved in with my parents (saving me $1,600 each month), froze my credit cards, took a part-time job for minimum wage to supplement my freelancer’s pittance, created a budget, and educated myself on how to regain my financial health.
Despite always having a job and being taught (and reminded regularly) to live within my means, I was financially illiterate. I downloaded Turbo and it calculated my credit score — but, as I quickly found out, your credit score does not provide a complete picture of your financial health. However, the program also calculated my debt-to-income (DTI) ratio, which impacts your ability to open a line of credit or take out a loan. Before revealing the result, it teases what a healthy DTI should look like (36% or less). Within a few seconds, my DTI appeared in bold: 52%.
I finally admitted I had a problem.
I opened up a new checking account that was free and allowed me to create financial goals and automatically save. I transferred my credit-card balances to interest-free cards.
There’s no question that I deserve the mess that I am in. I was reckless and entitled. Making sense of my debt and how to pay it off has not been easy, and the way I got here isn’t something I’m especially proud of. Thankfully, this debt won’t ruin my life. Educating myself on my finances and forgoing a bustling social life for a second job were nonnegotiable steps to reduce my debt. Perhaps I needed to crash and burn financially in order to understand the simple lesson that didn't stick at age 14: to not live frivolously. While I still enjoy Michelin-starred restaurants and designer clothes, I know these cannot be weekly or even monthly purchases. Paying down my debt has actually given me something to look forward to; whether it’s taking a vacation somewhere exotic or putting a down payment on a house, I’ll be proud to pay for it on my own dime.