Lessons Learned From Paying Off $28k in Credit Card Debt — PART 2

I've got my mind on my money and my money on my mind.

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.

Lose Gracefully

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.

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.

Final Thoughts

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.

Your Turn: What has money (spending, saving, losing, or sharing it) taught you? What have you learned about yourself by observing how you manage money?

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12 Responses to Lessons Learned From Paying Off $28k in Credit Card Debt — PART 2

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  7. Sheryl says:

    I think it actually takes a lot of dedication to use living in the basement to pay off your debt. I know I lived with my mom my first few months out of university – and for some reason I just couldn’t get it into my head that the money I was “saving” should actually be turned into, you know, savings (or debt reductions). I started to get it as time wore on, but somehow my financial management got MUCH better when I moved out and started paying rent. Having less available money made it easier to manage what I had.

    I find my relationship with money very odd: I’m super, super careful with it, but I LOVE spending it, and am a little bit grinchy at times with it, I stress about it way too much. At the same point, it’s just money. It comes, it goes, and I try to keep that in mind, whatever role it’s currently playing.

    • Kimberly Eclipse says:

      There seems to be a switch that goes off in people’s heads that suddenly makes them manage their finances more responsibly. Usually it happens around the time it did for you — when you move out and start paying rent. I think I’m a late bloomer but I’m glad your switch went off before you had a chance to get into too much trouble.

      I’m still reflecting on what it means to have a healthy relationship with money. I’m thinking that what it looks like on the outside is that your finances are in order, you are satisfied with what you have and with what you give away, and that you can plan/ save for the future without feeling too stressed. Right now my financial anxiety manifests in me making calculations over and over on my calculator about how much money I’d have to make in order to be on solid ground. I’m kind of OCD about it! So while the numbers in my bank account are looking much better, I have yet to master the mental part of the equation.

  8. Moz says:

    Debt is ‘a clog in the pipeline of blessings’. Love it.

    Can’t wait to see you guys here in just a few months.

    • Kimberly Eclipse says:

      We can’t wait to meet you! Will you introduce us to Nicole Kidman, Hugh Jackman, and most importantly a koala as part of the tour? ;)

  9. opal 21 says:

    Good job Kimmy. I wish someone have taught me about money management when I started working. I learn it along the way. I did some bad investment and some good ones too. Looking back I think I did OK.

    What I learned is balance. I save a portion for retirement and a portion for emergency.
    I spend wthin my means. I believe that managing money, time and other resources is meaningful and valuable when we spend them to something of value. The value of money is measured by how and where we spend them. Byimg someone a sandwich who is very hungry is money spent with value than spending a hundred to a beautiful dress that I don’t really need but I just want because I can afford..

    Learning the value of money is life changing experience. We learn to appraeciate what we had been given and learn to save and share wisely.

    • Kimberly Eclipse says:

      Love this: “I believe that managing money, time and other resources is meaningful and valuable when we spend them to something of value.” So true and very important!

      And you’re right– money management is about balance, which takes a lifetime to master, as does anything that requires great discipline and wisdom. There are very few people who are taught how to manage money early on by their parents, or who are innately mindful about this area of life. As for the rest of us — we learn the hard way. Hopefully sooner rather than later.

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