I've been in debt in one form or another for about 15 years. Sometime around my freshman or sophomore year of university, I fell for the free t-shirt trick. Of course I can handle this, I reasoned. I'll have a great job to pay this money off. At that point, I had not even declared a major. I was sure, however, that if I paid my $10.00/month faithfully on my slowly increasing balance, all would work out just fine. I don't know if I ever wore that free t-shirt that came with the credit card application. After all, I already had a closet full of t-shirts and didn't need it. Over the years, I have used credit to a acquire a number of items that I didn't actually need, but wanted at the time. Near the end of my college years, I also added student loans to my debts. I was very amused to find out that I qualified for more money to be loaned to me than I actually needed. Cha ching! I accepted the full amount offered to me and thought myself pretty lucky to have a couple thousand extra dollars of refund check money to spend. Some of my friends were paying living expenses with this money. I lived with parents rent free and had pretty minimal expenses, but I rationalized my need for this "free money." I even went through a period of time when debt collectors were calling my house for me to make payments, and I was getting overdraft fees regularly in my bank account. It took a while for me to see the error of my ways.
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| Ever get a overdraft fee of $37.00 for overspending by $4.00? I have. It feels pretty stupid. |
I continued my unhealthy spending habits for many years. I've had several credit cards and a personal loan through my credit union. After working as a teacher for about 1-2 years, I realized there was a flaw in my plan to repay my debt quickly. I didn't make enough money. Wanna know a secret? I did make enough money. I lived at home with my parents. My car was paid for-by my parents. I didn't even pay my own car insurance yet. I just wanted to buy materials things that barely mattered in order to impress people that didn't matter. I was doing what many Americans have a habit of doing. I had stupid debt for stupid reasons. At some point around age 24, I began listening to radio personality
Dave Ramsey on my commutes home from work. I bought and read his book "The Total Money Makeover". I began my debt snowball immediately. I began using phrases like "I can't afford that, or "that's not in my budget, or just plain old "NO" when tempted to overspend. When I was 25, I moved to Michigan City, Indiana. I was living alone and paying rent for the first time ever. I also had my first utility bills, car payment, and car insurance. My debt snowball was promptly put on the back burner. I had real bills. I also started using some of the credit cards that I had stopped using previously. This proved to be a pattern for me in years to come. I would get serious about getting out of debt for a period and then lay aside my resolve for some reason or another. Sometimes the reason was major like a car breaking down or a move. On other occasions, my return to the use of credit involved less essential things like a vacation or fancy Christmas presents.
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| If you aren't interested in this guy, pick another financial wiz. Just make some form of commitment to a plan, and follow it. |
Previous lack of success in a certain area does not have to mean that overall failure is to be accepted. While living in North Carolina, I was working as a teacher and paying down debts slowly. I admit that the slow pace was pretty discouraging. I saw my move to Kuwait as an opportunity to make a large dent in my debt. I would make more money and would not have rent or utilities to pay. I wrote about
it here. At the time of my move, the sum of my combined credit card and student loan debt was $25, 469.00. Was it possible to pay this off? Did paying my debts mean that I could not travel in the process?
In the many years that passed since being introduced to the Dave Ramsey show, I was still a fan.
I loved listening to people stop by the studio or call in to do there debt free screams. There was something in his simple debt snowball plan that appealed to me. You pay the debts from smallest to largest. In the beginning, I was paying all of my minimum balances and paying extra on my smallest debt. After paying off the smaller balances, I added that amount to next largest card. By this winter, I had paid off my credit cards. I was attacking my remaining student loan debt.
As a teacher, I worked in schools that received Title 1 funding for several years. Because of this, was able to have $5,000 of my student loan forgiven. This was not a simple process. They did not accept my paperwork multiple times. I had to call back several times and ask about the problem. The wrong line was signed. The HR department checked the wrong box when they filled out the form. They told me they only saw 1 of the forms uploaded once. I re-uploaded the form even though the document was clearly visible on the website while I was speaking to the loan rep on the phone. This process of calling back to get the loan was annoying, but it payed off eventually. The program finally accepted my paperwork in March of 2017.
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| Dear Nelnet, we have to break up. I'm seeing someone else. His name is Prosperity! |
I didn't follow one aspect of Dave Ramsey's plan. He says to eliminate ALL non-essential spending while in the process of paying off debts. I didn' t do this. I chose to live abroad because of the travel opportunities that are possible. I traveled. I bought non-essential things. I have great respect for people who are able to eliminate all non-essential spending for years at a time in order to reach their goals. I haven't reached that level of discipline. In all of my traveling and spending, I have had my debt-free goal in mind. I have found the least expensive flight options. I have stayed in AirBnB homes and hostels to avoid expensive hotels. I have walked or taken public transportation to avoid expensive taxis. I don't buy many souvenirs. I could have reached my debt free goal faster if I had skipped out on the travel opportunities, but I like the more "Scenic Route" that I opted for.
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| Sightseeing in Santorini, Greece |
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| me visiting the ancient city of Petra in Jordan |
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| snorkeling in Egypt |
My next goal is to work on building up an emergency fund with several months of living expenses because unexpected things happen in life. Right now, I am simply savoring the feeling of knowing that I don't owe anybody, anywhere, anything!
