Dear Diary, I want to tell you about the debt spiral I was in.

I had been in bad debt for 3 or 4 years when I realized I was in so deep that I didn’t know how to get out on my own.

…by 2022 I had maxed out a few credit cards, took out a loan to pay them all off, and then maxed them out again…3 times. This equaled about $60k worth of credit card and personal loans, and I was drowning under it all.

The preface

Before I really get into it, I want to note that for most of the time I was in debt, I thought I was alone in this problem. Meaning that I thought that it was just me, gambling addicts, and maybe a smattering of other people who grew up paycheck to paycheck and made some bad decisions or had some bad luck. I was under the illusion that most of my peers learned how to responsibly manage their money when they got their first jobs, and did it successfully. I thought that I was in a minority of people who had parents that not only didn't know how to teach me about money, but actively made bad financial decisions until I was well into adulthood.

My upbringing and living my parents' choices day in and day out as I grew up is a major aspect to some of the choices I made for myself, so mentioning them is important to my story. An example: when I was 15, my dad had solely been supporting my mom, my brother and me for at least a few years and it wasn't easy on him. He made around $50k a year in the early 2000s, and for a family of 4 in Northern VA, we just managed to scrape by. That summer, he got a bonus and we were all so excited! But then the next day he came home with a brand new Honda pickup truck. He likely did need a better car at that point…but he had preached to us countless times that a car that hasn't left the dealership was a bad investment, so I was confused and a little annoyed. When he pulled into the driveway with it, I remember asking my mom if he maybe should have invested or saved that money, but she brushed me off.

You'd think it would get better, or at least affect me a little less, as an adult. But the year after I graduated college, my dad tried to claim me as a dependent on his taxes. Of course, I claimed myself, because I was 23, had a big girl job and didn't think I needed to confirm this with him as it was obvious to me that he didn't have the right to claim me as a dependent anymore…as I was no longer dependent. We both had to be audited and redo our taxes that year.

All this to say, I have since learned that bad debt in general is all too common. I’m not sure if I was just talking to the wrong people about it, or if there is such shame around it that I just didn’t see it. Probably some mix of both.

But regardless of whether their parents taught them about all the right things, or they made decent money out of the gate, people make decisions that aren’t always going to have the best outcome. I want to share my story to get it out of my brain, but also so maybe someone in any part of this spectrum can find some comfort in it, knowing that these choices can snowball so easily. Even for people this “wasn’t supposed to happen to.” You’re not alone. And it’s very possible to end up on the other side.

How it started

It began in 2017. I was 26 and was approved for a travel credit card. When I applied for it I thought I’d get $5k at most, since I already had a $3k card for my everyday use and I was only making about $45k a year. Plus I was young and had student debt.

To my utter shock, I was approved for $15k. (Surprise! The credit card companies love when you’re young and uninformed.) At the time I still had a relationship with my parents, but after the story above, I’m sure you understand why I didn't trust their advice. So, I consulted some friends who knew more than I did about managing finances, and together we decided that I could be responsible with it.

And I was. Until I was laid off about a year later.

Everything spiraled after this. I never understood that financial trauma could resurface until I didn’t have a regular source of income anymore.

My severance ran out after 6 weeks, and then that $15k card became my crutch, since I had maxed out my other one. My $2k balance gradually increased to $5k…$8k. This is where I began to find myself swept up in that trauma spiral of indulging in bad behaviors that I knew were wrong, but felt comfortable to me because this cycle was what I knew. I was so angry that I didn’t have money, and that my parents never taught me the right thing to do when things went south that, for some reason, I kept spending. I can’t explain the logic behind it, because there isn’t any.

I knew that for my sanity I still needed to be out in the world and see my friends for dinner or drinks or whatever, something I continue to stand by. However, what I didn’t need to do was say I’d get the bill and then never ask anyone to pay me back. I also didn’t need to go shopping for clothes I didn’t need. You get it. The deeper problem was that I didn’t realize I was being swept up in these waves until I was in way over my head.

The spiral

By the end of 2018 my balance was $10k or more. I had found another job at this point, and I had an increase in my salary. But it wasn’t enough to offset the debt I had gotten myself into, so I was trying to pay down my cards by putting a major chunk of my paycheck toward them after I paid rent and my other bills. Of course, I still needed to eat and live.

So the Formula was: Get Paid > Pay Rent > Pay Credit Cards > Use Credit Cards exclusively for life stuff. Rinse and repeat. Every 2 weeks. For years.

Just in case you haven’t judged me or thought anything is wrong up until this point - THIS IS A FUCKING TERRIBLE WAY TO LIVE YOUR LIFE. My debt had me in an absolute choke hold.

A lot happened between 2018 and 2022. Like a few different big moves, more unemployment, some trips, and obviously Covid.

In 2019 I thought I had found the answer to my problems: debt consolidation loans. During this year I also decided I needed to move to NYC. (For context: I moved with no job lined up, but reasons for this in another story.) So due to this major upcoming change, I thought I’d find a way to clean up my debt, and also try to find a way to bring more money in. So I managed to start a short-term contract where I was able to make a lot more and save for the huge move. I thought I banked enough for the time it would take to land a job, but I underestimated how difficult it would be to break through a brand new market and network. I moved to Brooklyn in August 2019, and I didn’t secure a long-term contract until March 2020.

You read that right. That March 2020, when the world ended. But the thing is, quarantine was actually great for my bank account. Not being out in the world meant that I wasn’t randomly on 5th Ave or in SoHo and deciding to pop into stores to shop. It meant I wasn’t going out to dinners and then drinks for however long afterward. I also found myself wrapped up in the social movements that took our country by storm that spring and summer. One major game changer was that I boycotted Amazon in protest of its owner, so my online spending, which was often a result of boredom, was significantly reduced.

But when everything began to reopen, any and all cares went out the window and I was back to the Formula again. Why? During Covid I had turned 30, I officially came out as a lesbian (if you read my other story, you’ll know I only started dating women in October 2019), and felt like I had lost a couple important years of living in New York Fucking City. So in my mind, some key moments and experiences were missed and I needed to make up for lost time. Which meant that my ability to say no to anything, which was already basically nonexistent due to my FOMO, was nowhere to be seen.

I had a newfound queer community in spring 2021. Our group was inseparable. Anyone who’s queer probably has a similar entrance into this world. You come out, and you finally feel understood at your core for the first time in your entire life. And you absolutely must indulge in everything. At least this is how it was for me. We went out 4–5 times a week for at least a year.

All this time, in the back of my mind, I was panicking about my maxed out cards and the multiple debt consolidation loans I had taken out. The, now blatantly obvious, problem was that my habits didn’t change, and as soon as I paid off the credit cards with the loans, I was still using the credit cards for all of the above.

So the adjusted Formula was: Get Paid > Pay Rent > Pay Loans and Credit Cards > Use Credit Cards exclusively for life stuff.

This, of course, caused the credit cards to max out again.

What changed

You might be wondering how much debt I’ve accrued at this point.

Just to quickly summarize: by 2022 I had maxed out a few credit cards, took out a loan to pay them all off, and then maxed them out again…3 times. This equaled about $60k worth of credit card and personal loan debt, and I was drowning under it all.

But with 2022 came major things that had been hanging in the air for me for a while:

1. I started dating my girlfriend. This meant I was thinking about a more tangible future. If I was going to build a life with someone, I wanted to help provide one that I didn’t get to have when I was a kid. I had already started to break cycles that had been passed down to me from my parents, and this was a major one I wanted to add to that list.

2. I landed a job that felt different from all the others I’d had since the layoff that kicked off all of these events. It was the type of role I wanted, with a salary I was happy with, and most importantly: it was stable. Stability was the crucial part here because since 2018, I had only taken short-term contracts or was desperate and took a role I didn't really want because I just needed some sort of income. So the chance of unemployment hanging in the distance kept me from rocking the boat too much, since the Formula was something I knew could get me from one day to the next.

With these two things, the most important and pivotal moment happened…I asked for help.

I talked to a friend’s mom who was a financial advisor and she suggested I reach out to a credit counseling company. Later that day, I did exactly that and got connected to someone named Jonathan. We worked on my budget, and I was signed up to pay off the debt in about 3 years. He then said something to me at the end of our call that gave me hope for the very first time: you’re going to be able to do all the things you want in your life, you’re going to get yourself out of this.

The time it took me to write those last few sentences was about how quick it felt to get enrolled in this program. But the impact was so painful at the start. I had to close all of my credit cards so this company could manage my payments and get the interest rates down without the balances going up. I would pay them and then they distributed the minimum payments to the cards and the loans. All of this meant that I had to learn how to live with the money I was bringing in every month. I hadn’t done this since I was 22, when I got my first credit card. I was now nearly 32.

This was fucking hard.

The payments were astronomical because of how aggressive we made this timeline, so even with my adult pay, I was struggling. I had to say no to dinners. To trips. To any plans that cost money at all. (At least it felt that way.)

I was allowed one single credit card under this plan. I mostly wanted one because I was nervous about using my debit card for anything I had to order online, but I also wanted some sort of buffer because emergencies happen. The problem was that I couldn’t even apply for it immediately because your credit score plummets when you close your accounts. So for those first 3 months I was BROKE broke. When I was finally approved for the one credit card, it had a measly balance of $500 that later increased to $700 and never changed in those 3 years. And at first I was annoyed, but honestly, I later became grateful for it, because this is where I could tell my brain chemistry was shifting.

She learned

Over time it got a little easier. I learned how to budget better. I learned that I could say yes to some dinners, but not all of them. And if I did one thing, I might not be able to do another thing, so I had to prioritize. I had to learn to wait to make purchases for something I really wanted. If a trip was coming up that I couldn’t miss, I had to intentionally save up for it or find a way to freelance and get some extra cash quickly if necessary. No more spending money that wasn’t mine. I learned how to think before I put my card down, and to be more patient with things in life. I learned to be more appreciative of what I did have and what I bought when I could finally buy it.

And then I started to think about my time when I’m through with the payments. The idea was of course exciting, but I honestly also started to get a little scared because of my old habits even though I knew I had changed. Here’s where the progress really shows. Instead of pushing down these feelings, or just letting myself deal with this future on my own accord, I got myself a financial advisor. Together we got all of my accounts in order to make sure I’d have someone on deck for this crucial moment so there would be a clear cut plan the moment I’d have access to a lot more money very soon.

Years ago when I decided to start talking about my experience, a friend of mine put it in a really important perspective for me: Some people’s debt is from college or grad school where they have a fantastic education to work with. Yours is from investing your time and money in your relationships with people and finding a place you love to live.

And she’s right, that’s exactly what I did. These years weren’t easy, and I felt like I went through some of these harder moments alone, but it turns out I wasn’t alone. I look back now and think of the friendships I made and fostered the last decade. I think of how if I had stayed home even half of those times I wouldn’t have the memories I have now. If I hadn’t gone on some of those trips, I wouldn’t have the inside jokes we have. Or the travel tattoos. Or the pictures hanging on my walls. I would have never met my girlfriend, or moved to the best city in the world. I love the life I live now.

The takeaway from all of this isn’t to not make mistakes. Actually, mistakes can be super necessary and ultimately positive. And most mistakes can be turned around, with you in a better place than you might have originally imagined. It’s also to talk about them because in all likelihood, someone else probably has gone through the same thing and you’ll find out that you’re in good company.

🖊️ A.