I’m dealing with debt – and I write about money for a living

I’ve been writing personal finance for over a decade, covering a wide range of topics from budgeting to 401(k)s. So I know very well how to handle your money. And yet, like many people, I am paying what feels like a mountain of debt. And for a long time I was ashamed of that.

Money stigma is real, but it shouldn’t be. The truth is that many people struggle with debt, and treating it like a dirty little secret doesn’t help us deal with it. I hope that by sharing my story, I can make the subject a little less taboo – and help others who are struggling with big balances feel a little less alone.

How I Got Into Debt (Twice)

It was 2004 and I was fresh out of college – ten years away from becoming a money writer and despite my degree I had no training in personal finance. (Financial literacy should be an important part of our educational curriculum, but that’s a rant for another time.) I had a vague feeling that credit card debt was “bad,” but it was so easy to wipe away that plastic and… forget. , especially when I didn’t understand the dangers of compound interest. A night out here, a new outfit there — at about $20 each, each purchase seemed small at the time. But those “small” purchases left me with nearly $10,000 in debt.

After graduating, I quickly discovered that my entry-level salary was not enough to wipe out the debt I had accumulated. I got by on minimum payments for a few years, thinking I was doing the right thing, but eventually I realized I was trapped in an endless cycle of increasing interest and didn’t know how to get out.

Making only minimum payments on your credit card balance is “like trying to eat a bowl of rice with chopsticks, one grain at a time,” says Todd Christensen, education manager at Money Fit, a nonprofit debt relief program. “It takes forever, and your stomach still feels empty.”

Christensen added that it can take between 15 and 25 years to get rid of this debt if you only pay the minimum amount due — and it can lock you into a debt spiral like I experienced.

I needed help, fast. I signed up for a payment plan with a nonprofit credit counseling organization and diligently paid off my debt over the next few years. I also paid off my car loan. When the final payment was made, I was elated and ready to use the money I had freed up to quickly pay off the last bit of debt that my then-husband had also accrued.

Then life happened.

Without warning, my husband’s health rapidly deteriorated. He was diagnosed with a chronic illness and had to stop working. He applied for disability benefits, a process that could take years, and in the meantime his medical bills quickly mounted. I quit writing and editing to return to my former career in the legal industry, and ended up at a company that gave me a higher income but also unhealthy pressure.

The stress of keeping our household running exacerbated some of my own health issues, and after months of trying to make everything work, I had to take short-term disability leave myself. Before we knew it, our emergency savings were gone and the debt I’d worked so hard to clear started piling up again.

I felt like an imposter and a failure. I had done many things ‘right’, and yet we were back to square one.

What I learned from my debt problems

In retrospect, it is always something you could have done differently. I could have built a bigger emergency fund instead of spending all my extra money on paying off debt as quickly as possible. I could have stayed at my previous job instead of returning to the legal world, which was less lucrative but better for my mental health. I could also have found easier ways to make ends meet, like working a part-time job when I had the time.

But the truth is, debt can happen to anyone, even if you’ve checked all the boxes to avoid it. One expensive medical bill is enough to get your finances in order. And when that happens, the best way to move forward is to have the right tools to get back on track.

My new attitude towards debt

As of now, I have consolidated my current credit card debt into a personal loan with a low annual interest rate and am paying it off aggressively. I am also taking steps to avoid being in this situation again, whatever happens in the future. But if I get into debt again, I now have better coping strategies.

Here’s how I approach my debt differently.

Give myself grace

We’re only human, which means that sometimes we make less than perfect decisions. And sometimes life has a way of derailing even our best plans.

Alaina Fingal, owner of The Organized Money and a member of the CNET Financial Review Board, said that for many of her clients, debt is the result of “a major life event — job loss, a medical emergency, someone passing away who provided the income for your family.” . And then that shame comes up because you have the feeling that it should work out. But it’s not just that you’re very bad with money.’

If you’re struggling with your finances – no matter how you’ve handled it – there’s no point in beating yourself up about it. It can even worsen the situation and make you feel more isolated. Instead, focus on what you can do now to get yourself back on track and know that you are not alone.

I don’t neglect my emergency fund

I was so focused on paying off my original debt that I didn’t send enough money to our emergency fund. If we had had the three to six months of expenses that experts recommend saving for, it could have given us the breathing room we needed to reevaluate our situation when my husband got sick and come up with a better game plan.

Now I’m making a concerted effort to build my emergency savings while paying off my remaining debt. To free up the money to do this, I’m trying every trick in the frugality book, from savings challenges to joining my local Buy Nothing group. It will feel a little tight for a while, but it will be worth it in the end.

Don’t neglect my health

Financial health does not exist in a vacuum. Your physical and mental health can have a major impact on your ability to make money and make financial decisions – and can also lead to expensive medical bills. While you can’t do anything to prevent chronic illness, you can invest in your overall health by recognizing your limits and not sacrificing your self-sustainability for extreme goals. Failure to do so could damage your finances for years to come.

Speaking of money

The fact that money is a taboo subject for many people – and women in particular are less likely to feel comfortable talking about it – can make it difficult to stick to our financial resolutions. Although I haven’t revealed my debt problems to many people, I have learned to embrace the philosophy of loud budgeting. I have yet to find someone who will judge me for wanting to be more frugal. In fact, most people admit that they should do the same.

“On social media it seems like a lot of people have it figured out, but in reality some people act like they have it all figured out,” Fingal said. “I don’t think we talk about that process or that journey enough. We see the success stories becoming very big, and they are very attractive and fun, but the slow process of budgeting every month or living below your means is not that fun or that popular, so it seems like everyone has it together.”

I’ve also learned that sharing your money problems—and not just your money goals and wins—can be invaluable. I was too ashamed to admit the full extent of my situation to friends or family, but letting a few trusted people in could have reduced my stress and helped me think about better solutions. Even if I hadn’t felt comfortable doing so, there are plenty of support groups and forums online that I could have turned to to feel less alone.

“We sometimes have so much judgment when it comes to debt, and in the past we have had many finance teachers who have shamed us and made us feel like it was our fault that this particular thing happened, or that we weren’t on this specific situation were prepared. life event,” Fingal said. “It has caused more people to withdraw and not talk about it, and many people are experiencing the same thing.”