A Story Of Debt

Watch Me As I Go

Ashley — Mon, 30 Aug 2010 19:00:01 +0000

While I’ve still been working 55 hours and six days a week this Summer, it’s certainly been a lot easier than the 15 hours days I was working when school was in session. I have at several points this Summer, especially while enjoying a previously forgotten delight called free time, marveled at how I was able to pull off working so much during the school year. I kept eying the end of August, thinking, “how can I do this again?”

But then several weeks ago, I was talking to one of my coworkers, who’s been in a similar situation, and he and I were trying to explain to another of our coworkers that you just do it. You really don’t know what you’re capable of until you push yourself to the limits. Not to continue to force Nike slogan-like motivational statements on you, but there’s no secret except to just do it. And that made me feel better, because I know that I’ve done it before and I can do it again. That simple thought has taken away most of my anxiety about the end of Summer and the start of Fall.

Adding to my motivation is that the finish line finally seems so close. There has been a lot of time between the exhilarating start and the fantastic end. Months and months of just plugging along. But now the end is only four months away and I can smell it, feel it, taste it. Getting there is, to me, worth whatever it takes and I’ve been working on making all the preparations necessary to start the final sprint. Most important has been to get my mind in the right place.

I was certain of success from the beginning. I guess because getting out of debt is really so simple. There’s never been a point where I didn’t know what to do or I was confused by someone else or I could possibly convince myself that not getting out was the better option. It took me a long time to get my mind in the right place, but then it was and I’ve had complete focus ever since, which stands in contrast to the rest of my full-of-distraction life.

Getting out of debt has been my biggest priority this year and it has demanded a lot of my attention and nearly all of my time. I’m looking forward to my money being my own more than anything, but I’m also looking forward to having this burden off my back. I think about money all the time and not having enough of it/expenses coming up/not making my debt goals are a constant source of stress for me, often even when I don’t realize it. I’m making a lot of money and yet I always feel broke. I’m tired of that.

So, watch me as I go is I guess what I’m saying. I’m going to do everything I can to be out of debt by the end of the year. I want to start 2011 differently.

This Time Last Year

Ashley — Thu, 26 Aug 2010 19:00:39 +0000

This time last year, I hit rock bottom in my financial life. School was just starting, I was sick, my car had a flat tire, and I didn’t have any money or available credit. I was almost at a point where not asking for help was no longer an option. But, I was stubborn, so I walked everywhere in 100 degree heat and dragged myself to the grocery store to buy the least expensive medication I could find. Then I waited out the next week until it was finally pay day.

You can float along a very long time without feeling your debt. This was the first time I’d really felt it. The first time it was so limiting that I couldn’t go about my normal life. The first time I had to strategize how I would eat for the next week with only the food I already had in my apartment.

It was scary and I was very aware that if one more thing went wrong, I was done. Worst case scenario, I guess I would have had to call my parents and ask for money, which is a million miles from ending up in a box on the sidewalk, but in my mind, it was just about that bad.

I made it to pay day. By then I was no longer sick, but I got my car fixed and bought some groceries and said to myself, “Wow, that was a close call.” You’d think I would have been scared into action, but I wasn’t. I’m sure I made some kind of an effort to at least avoid being blindsided like that again, but as soon as there was money in my bank account I continued on as I had before. Things didn’t click for another two months.

Things could hardly be more different this year. I have $12,000 less credit card debt, money in my accounts, and plenty of available credit. Most importantly, I’m not ignoring a huge problem in my life. But, I don’t always feel the difference. I guess because I have my get out of debt game face on. I feel broke all of the time and I still stress about unexpected expenses constantly.

The truth, whether I choose to accept it or not, is that I am in a much better place and while I’m hoping for clear weather until I reach shore, I’m now capable of weathering a pretty huge storm. It would take a lot more than a flat tire and acid reflux to take me down now.

It’s Going to Happen This Year

This Blog Will See An End

Ashley — Mon, 23 Aug 2010 19:00:34 +0000

This is a strange post to write, but I keep trying to fit this information into other places and it’s not working. Still, I want it to be known. While it is entirely possible that I will change my mind, I anticipate that this blog will end soon after I’m out of debt (early 2011).

I’m sure there are plenty of posts I could write after that point, but this blog is really about my story of getting into and out of debt. While I’m trying to make the point that money is important and making smart decisions with your money is important, I’ve always thought of this blog as more of a story than a place to get financial advice. I mean, I have plenty of advice on how to get out of debt, but it’s hardly more complicated than making up your mind to do it.

Post-debt life interests me very much. I am actually eager to be responsible with my money and make decisions about what to do with it. The only real decision I’ve made in this journey was the first one; the answer to every question since has been, “do whatever you have to do to get out of debt.” The story has been about getting my mind in the right place to keep running this marathon.

I have savings to build and a Ph.D.’s worth of student loans to tackle. But, I don’t want to live the life of a personal finance blogger, accounting publicly for every financial decision I make. I don’t feel like I need that kind of accountability. The story that interests me most will be over and if it needs an epilogue or several, I have a personal blog where I can write whatever I want.

I like the idea of an end, though I won’t force it if I still have a lot left to say. For now, I’m still running and still telling the story.

Will you ever tell your family about your debt?

Ashley — Fri, 20 Aug 2010 19:00:13 +0000

Laura asked: I think you mentioned before that your family doesn’t know about your debt right? Do you think you’ll tell them at any point, or when you’re out of debt all the way?

I have a vivid imagination and I’ve definitely pictured a scene where I’m sitting around a table with my family and I make the big announcement that I was $20,000 in debt, but as of today, I am debt free. Did I mention this would take place on my birthday, because my birthday is in December when I’ll be home and it will hopefully coincide nicely with the moment I am finally out of debt?

It could happen that way, but I’m not one for big announcements or holding the attention of a room full of people.

I think I will tell people, but probably individually over time. When you put so much work into something, you kind of want the people you care about to know. I used to think it would be important for me to admit to my family that I had made a huge mistake, but I don’t feel that way anymore. I just want them to know, because it’s a significant part of my life that they shouldn’t be left out of.

But, I don’t plan on telling them until I’m out of debt. I don’t want anyone trying to help me. I can be very stubborn about trying to do things on my own instead of relying on other people, but in this case, I think it is important that I do it on my own. And, however immature it may be, I don’t care to subject myself to any lectures that might come my way.

I don’t know that my family will be all that surprised. Perhaps by the number, but not that there was something going on. I mean, they know how much I work and yet I’m always broke. I am not the first of my siblings to be in debt and I’m also not the only one who keeps things to myself, so I don’t think it will be a giant revelation, but telling my family is still significant to me.

Having Fought For It

Ashley — Thu, 19 Aug 2010 19:00:12 +0000

I was at work a couple weeks ago when I pulled up the Mint app on my iPhone and saw that, according to Mint, I was no longer in debt, but actually had a net worth of $54. Considering my net worth usually has a negative sign in front of it and also lights up in the color red, this was pretty exciting to me.

But, unless I fell asleep the night before and woke up in January, I knew it wasn’t right. I saw the problem right away; it was reporting my Capital One Visa with a $0 balance when it should have shown something around $9,000. Normally when Mint is having trouble accessing the right information in an account, it will tell you, but this time it looked quite certain that there was no balance on the card.

In the time it took me to pull up my account on the Capital One website and see that my debt was exactly where I thought it was, my mind cycled through some fantasy scenarios. They were all ridiculous and they all went along the lines of, what if somehow my debt was wiped clean whether by a fairy, my Dad, or Capital One? What if today, I was out of debt?

Now, I’m sure I could get used to the idea, but my first reaction was, No. It’s just that this has been such an important experience for me and I want to see it to the end. I want to earn it. If someone were to rescue me now, it would take away from that. This fight is mine and I’m winning it.

I advocate getting out of debt the hard way, not only because I think it’s the kind of experience that can change your life, but because it’s also the most effective way. I’ve read a lot of stories about people borrowing money, transferring balances in circles, and looking for an easy way out (like I did for years). Sometimes they make progress, but usually they just push their debt around. Some actually get out of debt, but then go straight back into it, because they haven’t learned anything. Do the smart thing, by all means, but remember that the smart thing is the one that keeps you out of debt for life.

I’ve said before that my life was changed the minute I decided to get out of debt, and it’s true that my thinking about money was instantly transformed, but I’m still learning something through all of these months of hard work, and I’m not done yet.

Life After Debt

Once you’re done with the credit card debt, do you think you’ll save with the same intensity, or kind of level out?

Ashley — Wed, 18 Aug 2010 19:00:52 +0000

Janalyn asked: I think we have some similar ideas, but my life is kind of opposite: I’m a married 20-something done with school (thankfully with only a few thousand in student loans), with 2 car payments and now a mortgage. We only have huge pieces of debt (2 cars totaling about $22K, $6K left in student loans, and now $118K in a mortgage even after our 10% down payment. In our case, we pay double the minimum on the student loans and round up to the nearest 50 mark on the cars and mortgage. My question is, what do you recommend for people in this type of situation?

I just feel like even with Dave Ramsey’s gazelle intensity, our debt items won’t go away quickly. We are throwing most energy into saving (I really want to be a SAHM), so we’re saving a little more than 20% of our combined income each month for that to be possible in the near future. Sometimes, (esp. around the DR followers) I feel guilty for not putting more toward the debt, I just feel like we’re already paying more than required, so I’m okay with spreading it all out instead of focusing on one thing to get rid of. So once you’re done with the credit card debt, do you think you’ll save with the same intensity, or kind of level out?

Dave Ramsey is really useful for encouraging people to get out of debt and to do it in the most straightforward way possible, but I won’t follow him to the ends of the earth. To answer your question, I do plan to save with gazelle-like intensity for a while (a year or until I can’t do it anymore, whichever comes first), but not long-term and I won’t be attacking my student loans, at least immediately, with the same intensity. As Dave says himself, most of the people he helps are out of debt in 12-16 months, which is a reasonable amount of time to be all crazy about debt reduction. My journey out of credit card debt falls under that time frame and I advocate people getting out of credit card debt as fast as possible, but with huge student loans (like my own) or a mortgage, it’s not going to happen.

You have to set your own priorities and with making my debt public like this, I do worry that people will judge me for making certain decisions, but I don’t worry about it too much, because a). They probably don’t care as much as I think they do, and b). I earned the money and I can decide what to do with it. I wouldn’t let Dave Ramsey die hards make you feel guilty for making careful, thought-out decision on what to do with your own money.

If I was in your shoes, I might be all gazelle-like about the student and car loans. You might be surprised by how quickly you can be done with them. But if being a SAHM is a bigger priority, then you should go for that. This whole process has resulted in a major attitude change for me about money. I used to think that dreams and doing what you want were more important than money and now I realize that if you take care of the money, it can help you live the way you want and pursue your dreams. If being a SAHM is what you want to do, then do with your money whatever will help you get there. But, this is just my non-expert, personal opinion advice. Sounds like you already know what you’re doing. Thanks for reading Janalyn!

The Debt As it Stands (8/17/10)

Ashley — Tue, 17 Aug 2010 18:00:21 +0000

I haven’t made as much progress as I wanted to, but August has been and continues to be an expensive month. I went home, I had car expenses, I need to purchase another plane ticket to Washington, school is starting, and I had a time sheet issue that meant money I normally would have had by now won’t be coming in until Friday.

And, I finally splurged on the one big ticket item I knew from the beginning I would not be waiting to get out of debt before purchasing: iPhone 4. I was holding off as long as I could, but I came home from vacation to a very big pay day, so I paid all of my bills and then I went to the Apple site and ordered it. Can’t wait to have it in my hands.

Even though I’m always kind of frustrated with my progress, now that I’m below the $10,000 mark, every lower number just feels so exciting. My debt gets more manageable all the time.

(Also, as you can see in the picture above, they updated the mint.com iPhone app. to make it uglier. I miss that pretty back ground.)

What advice can you give to someone who wants to start taking control of her debt?

Ashley — Mon, 16 Aug 2010 19:00:30 +0000

Stephany asked: For someone who is currently in debt now, what advice can you give to someone who wants to start taking control over her debt? I don’t have the finances to put a huge amount towards my bill every month but do want to take control in some way.

I recommend Dave Ramsey’s debt snow ball. Keep up with your minimum payments, of course, but don’t try to pay down all the balances at once. Concentrate on the one with the lowest balance and destroy it. Throw all the money you can at it. It’s up to you whether you want to make sacrifices, such as cutting expenses and spending money or working more, in order to get there faster. Once you’re focused on a specific goal and determined to get out of debt whether it takes months or years, you might be surprised by all you’re willing and capable of doing.

You set your own pace. Any progress you make, even if you can’t put much toward your debt each month, will be movement in the right direction. But, I know for me it’s been worth it to change my lifestyle in order to get there faster. I shouldn’t reasonably be able to put hundreds of dollars toward my debt each month, but I’ve given up my free time and many luxuries in order to do it. It’s worth it to me. As Dave Ramsey says, “If you will live like no one else, later you can live like no one else.”

And, hey, since I’ve already mentioned him twice in this post, if you need some motivation, I suggest listening to Dave Ramsey’s podcast (the first hour of the show is free). It’s a powerful combination of Dave telling people to suck it up and take responsibility and him congratulating people who’ve paid off their debt. Sometimes his politics bother me, but I don’t think you’ll be bothered by that. I don’t listen to it all the time, but when I need a little kick, it does that for me. You can find it on iTunes.

Me Talking About My Debt

Ashley — Fri, 13 Aug 2010 19:00:21 +0000

Those of you who read my personal blog know I’m Vlogging Every Day in August (VEDA). In a recent video, I talked about money and mostly about my debt. Seems perfectly relevant to this blog, so here it is.

www.youtube.com/watch?v=Mbv2pXLAHjs

The Calming Effect of Having a Plan

How Do You Have Time to Work So Much While You’re in Grad School?

Ashley — Wed, 11 Aug 2010 19:00:12 +0000

Jack asked: How do you have time to work so much and get any research done? In my program at least, grad school is all about the research and coursework is just an annoyance. I can’t imagine working 20+ hours a week and having the time to do 40+ hours a week of research.

Well, I study philosophy and theology, so coursework is not an afterthought or annoyance. It’s where you read the major works, get introduced to new ideas, and learn how to do the work for yourself. Research done during that time is usually for term papers. You can work as a research assistant or teaching assistant, but otherwise, there’s no work component to the program. So, it’s coursework, language exams, and whatever research you choose to do on your own for conference papers or whatever else you’re working on.

That said, I work 15 hour days, 6 days a week. I don’t sleep enough or study enough. It’s not something I could keep up for long and my coworkers and fellow students think I’m insane. But, it’s worth it to me right now to get out of debt. I’m lucky that my job at the library involves a lot of time I can spend reading for class and writing papers. It wouldn’t be possible otherwise.

Once I’m done with coursework, I’ll cut back, because I’ll never get through qualifying exams or a dissertation while working this much.

Dream Shopping and Saying No to Work