This debt free post is from KC White of Modern Muse Web Design, who I met at the NMX/BlogWorld Conference earlier this month. In this post, she shares her debt journey with you, and how she got motivated to get out of consumer debt. (Woohoo KC!) Here’s her story.
Jackie sat next to me during an NMX/BlogWorld presentation and I liked her from the start. As the conversation progressed, she mentioned that she was a personal finance writer. I heard the story of how she and her husband were able to pay off their house in three years and after hearing her story, I was beyond impressed.
I immediately felt like I could trust her enough to talk about my personal finances, so I opened up and told her about my struggle with consumer debt. By the age of 26, I owed $33,000 in credit cards.
I shared how this past summer, I was finally able to pay off that debt. I’m a web designer, so for the last few years, any money earned from design projects was dedicated to paying off each balance. However, 5 months later, I found myself in the hole yet again – this time, for $4,000.
That’s when Jackie made a statement that stuck with me throughout the entire conference. She said, “I would be terrified if I had that much debt.”
Before the conference, I shrugged off the fact that I was in debt (yet again). I was in denial. I rationalized that hey, I had been liable for worse, if I could climb out of debt once, I could climb out of debt again.
But then I met Jackie and her statement hit me like a ton of bricks. She was right! I should be terrified.
Back in the late 90′s, it was commonplace to see credit card companies market to students on university campuses. They would entice students with free t-shirts in exchange for opening credit card accounts.
I didn’t fall prey to a free t-shirt, but I was mailed a ton of credit card offers during my first year of school. Eventually I filled out a credit application and opened my first account. Within weeks, I had a shiny new credit card with a $500 balance. It felt like free money.
When I was younger, I had the notion that time was on my side, but time only made things worse; small charges here and there eventually snowballed into a massive amount of debt. A $33,000 snowball in my case.
As I’ve learned the hard way, it is definitely not free money. Debt is debt.
I accumulated credit card debt for various reasons. All of them for short-term satisfaction without any thought of the long-term effects.
Starting in college, I used credit to purchase textbooks. The balances crept up as I began to treat myself to a dinner here, a haircut there, and so on.
I graduated and worked for a year in an accounting job that I didn’t like, so I quit and went to work for my parents as a bookkeeper (ironic, right?). Working for my parents didn’t pay much, so I went further into debt to fund a failed costume jewelry business and later, a failed venture as a Mary Kay consultant (don’t ask).
Oh, and of course there are the vacations, furniture, computers, and clothes that were mine…all courtesy of credit.
I was able to remain debt-free for a couple of months, but then I relapsed. It began when my grandmother passed away in August. I needed to book an expensive last-minute flight, so I charged the plane ticket to the card.
When I returned from that trip, I resolved to pay off the balance in installments rather than take the money from savings and pay everything off at once. That was mistake #1.
Being in and out of debt is a lot like losing and regaining weight. You let things slide here and there until before you know it, you’re in too deep.
Around that time, we also got into the counter-productive habit of buying groceries with the card so we could earn cash back rewards. But with each paycheck, we were less and less able to pay down what we spent, so the balances began to climb.
Let me tell you, unless you have the discipline to pay off the balance each month, it’s not worth trying to earn cash back bonuses with credit. You will likely spend way more in interest than what you can earn in rewards.
Debt is Terrifying
Being in debt felt overwhelming to say the least. Every payday, I felt like I was slowly suffocating; I never had enough to put any significant amount towards debt, and there was never anything left over for savings. I was running in place.
I felt like an utter failure too. I had an Accounting degree, I should know how to take care of money!
Jackie was right — it’s terrifying to be in debt. How easily I forgot.
Luckily, my husband and I had just enough savings in an emergency fund to cover our consumer debt, so after the conference ended, I took stock of what Jackie said and resolved to break the cycle. We tapped into our savings to pay off debt and start the New Year off with a clean slate.
Now that I’m consumer debt-free, I feel like I can breathe a lot easier. I now look forward to the next paycheck. Whatever’s left over after paying bills is now dedicated to rebuilding our emergency fund.
Sure, we have mortgage debt and student loan debt, so we’ve got a long way to go, but tackling consumer debt really took the edge off.
KC got her start in web design over 13 years ago. She’s been inspiring clients with her designs since 2007. (She offers WordPress Themes & Tutorials too.) She’s a certified web designer currently residing in fabulous Las Vegas, Nevada — and a cool person to talk to, too!