I’m relieved to have arrived at Part 2 of my thoughts on credit card debt. Honestly, it was difficult for me to hit “publish” after writing Part 1. Seeing my financial mistakes listed before me (and sharing them on the Internet) feels like being naked on a stage in front of a huge audience.
Unless you’re a stripper who loves her job, this is NOT a good feeling.
But today’s post is all about financial redemption, people!
Below are 3 simple steps that enabled me and my husband to eliminate our debt. Oh, and bonus: You’ll also find out what money management taught us about ourselves and about life.
Understand Your Relationship With Money
How would you describe your relationship with money?
No matter your answer, it is likely shaped by:
- your family’s history with money management.
- your philosophy on how and why people earn or lose money.
- the influence that this philosophy has on your financial expectations and goals for the future.
Confession: Part of the reason I had so much debt is because I believed I’d never experience poverty or financial stress in my lifetime.
But how did I develop this belief? Who told me that money never runs out?
My Life did, that’s who.
My childhood and adolescence consisted of a nice house, a few cars, and fun family vacations to tropical places. And even when my dad struggled with a long bout of unemployment, he had saved enough money so that we could stay in our fancy neighborhood, have all our needs met, and attend good colleges. In my mind, this financial security was made possible by the fact that my parents got good grades, went to college, found jobs, and worked hard.
Follow the formula. Easy.
And that’s what I did. In high school I worked hard to pay for my drum lessons and my beloved pet rabbit’s needs. I got good grades. I went to a competitive and prestigious college. I got hired to teach high school at age 21. I did all the right things.
Naively, I thought I’d always be financially safe. I didn’t think I needed to be frugal or strategic when it came to money because the story in my head about how people earn and save money didn’t seem to involve those things.
It took a $28k sh*t storm for me to realize that you’ve got to build financial security. It doesn’t automatically happen just because you were a good girl with good grades, a good work ethic, and a good heart.
Nowadays, I struggle with feeling like I will be in a financial crisis for the rest of my life. Obviously, this is because I’m still traumatized by what debt has done to me and to the people I love. But this attitude will eventually reek havoc on my life, too.
So the best and bravest thing I (or any of us) can do is to stop living in denial about our unhealthy spending habits, but also to financially prepare for the unpredictable nature of life without going into cardiac arrest over it. The key ingredient for being able to strike this balance is the ability to understand your relationship with money.
Aside from the fact that my husband and I work 5 jobs between the two of us (Eek! 5!), the greatest contributing factor in our Debt Elimination Extravaganza is…
we live in my parents’ basement.
(Sigh.) I know.
This feels more embarrassing than anything I listed in Part 1 of this series.
I don’t know what’s worse: trying to discreetly have a big argument with your husband when your parents live upstairs, trying to discreetly make up after said argument (if you catch my drift), or confessing our living arrangements to you, dear reader.
For us, losing gracefully means 2 things:
- acknowledging the severity of our financial trouble
- accepting the consequences as opposed to avoiding them
If you refuse to lose, you’ll never win. If you don’t swallow your pride, you’ll never earn it back. If you don’t make a big change, you won’t see a big change.
Brian and I could have stayed in our 2-bedroom apartment in Brooklyn. We could have kept up with bills while continuing to rack up credit card debt, hoping that one day our problems would go away.
But doing so would mean running away from the truth. Which is silly because the truth always catches up to you. Better to face it early on before it grows uglier.
This year we’re moving out of my parents’ basement. We fought the battle and we won.
Pick One Thing
Eliminating debt is not just about gloom, doom and penny pinching. Like I said earlier, it’s about redemption.
And for me, financial redemption involves the ability to pay for experiences that bring you great joy and fulfillment without going into debt for it.
The idea is to pick one thing. What’s one thing you’d like to accomplish that would fly your heart to the moon and back?
Do it honestly – that is, do it in a way that honors you and your family’s financial well-being.
Do it creatively – that is, think outside the box to accomplish your goal affordably.
Do it bravely – that is, do it even if it feels easier to sit at home in all your financial guilt and worry, punishing yourself for past mistakes.
Each year Brian and I focus on a different exciting goal to work toward:
- 2010: Have a wedding (100+ guests) and a one-week honeymoon without adding a penny to our debt.
- 2011: Eliminate all credit card debt.
- 2012: Visit Australia and return home without any trip-related credit card debt.
We accomplished our goals for 2010 and 2011. As for Australia, the trip is booked and we’re using travel reward points to make it happen cheaply.
Spending wisely is not just about spending less; it’s about spending money on the things that matter without compromising your values, integrity, or financial future.
What I’ve learned from going in and out of debt is that money is not something we should feel compelled to hoard, mindlessly spend, or keep silent about. Money is something that keeps our families safe, gives us options, brings us enriching experiences, helps those in need, and makes positive changes in our global community. Money is meant to be fluid, like blessings. So when my husband and I had credit card debt, it meant there was a clog in the pipeline of blessings. It is for the sake of our loved ones, our own emotional well-being, and our communities that we should engage in discussions about healthy money management and how it can make us better, braver people.