What Do I Know About Debt?


In a few posts I have mentioned that while I have over $20,000 worth of debt, none of it is actually "consumer debt."  It's all student loans.  I don't have a car payment, and I don't currently have any credit card debt.  While I struggle every semester to come up with tuition money (I'm over taking out loans until Dental School), I am blessed to have parents willing to help me out by allowing me to live with them rent free. 

In my situation, sometimes I wonder if I'm "unworthy" of doing the Spending Fast.  I read lots of comments left on Anna's blog.  I read about the amount of debt that some people have and it makes me feel sick.  You know, that sick, anxious, worried, I-just-want-cry-and-make-it-go-away feeling that everyone with debt has?  Some of these people have hundreds of thousands of dollars in student loans and tens-of-thousands of dollars in credit card debt, and it makes me feel like my $20,000 in low interest, "student-loans-are-good-debt" debt is a slap in the face to those really struggling.  And then I remember, I wasn't always in this position.

When I graduated high school, I was like every other young person experiencing the world for the first time.  I got credit card offers in the mail almost daily, but was careful to disregard them.  I would cut them up and throw them away, until one day,  I decided I should probably establish some credit.  Against my parent's counsel, I signed up for a credit card, and POW, I was approved for a $300 credit line.  A few months later, I got a raise at my part time job, and asked my credit card company for a credit limit increase.  At this point I don't think I had ever actually used my card, I just wanted "more" money.

By the time college rolled around, my parents told me that with three of us all going to college (and my brothers going on misisons for our church) there simply wasn't enough money for them to pay for it.  They would let us live at home to help with expenses, but that was all they could do.  In my family, college wasn't an option, it was a must, just like elementary school, middle school and high school were musts.  Without help, I was on my own to finance my education. 

I applied for a ba-zillion student loans, but never got any.  And grants?  Yea right, people like me don't get free money.  I come from a white family who lives in the suburbs, and my dad is a Pharmacist who makes a good living.  The government doesn't give people like me free money.  But what the government didn't realize was that my family had 3 kids going to college at the same time, and my parents were in financial trouble too.  Way back when, my dad wanted to be a doctor, but he spent about 8 years of college messing around and flunking out.  When he married my mom, she worked while he could go to school. Then one day, they found out she was pregnant with triplets, and by the 3rd month of her pregnancy, she was put on bed rest and had to stop working.  My dad got a part time job and continued school.   We lived on a part-time, entry-level income, and student loans six.  Needless to say, by the time I was ready for college, my parents were still struggling with their student loans.

Without financial aid, or help from family, I didn't know where else to get money, except... my credit cards!  I was able to get a big enough credit limit increase to put an entire semester on one card.  By that time I had applied for, and been approved for 4 more!  Within 2 years, I had maxed out four credit cards on tuition and books and one on gas (yes, a whole credit card of gas!)  By the time I was 22 years old, I had just under $20,000 of credit card debt.  Because my cards were maxed out, the monthly payment on one card was more than my measly, part-time, $300 paycheck could handle, let alone all five card payments!  And, because my cards were maxed out, and I wasn't making the required minimum payments, the late fees and interest rates soared!  My lowest interest rate card was 23% and the highest was an astounding 38%!

Believe me when I say that I know the sick, anxious, worried, I-just-want-cry-and-make-it-go-away feeling that comes with debt.  I felt it often, everyday, hanging over my head, laughing at me.  My magic money (yes, that's how I referred to my cards) was gone, and I was up a creek.  It was then that I realized I had to do something.  I had seen a show on Oprah about people in debt.  These people followed her Debt Diet, and were able to become debt free in just a few years.  I looked into it, and it seemed doable.  I had long, in depth conversations with my parents about dropping out of school for a while, and asked if they would continue to let me live with them if I did.  They were extremely upset, and didn't agree with my plan, but they know the stress and heartache that comes with financial problems and so they agreed. 

So, I dropped out of school, a decision that I knew would be extremely hard to recover from.  I picked up more hours at work, and slowly, slowly, slowly I began reducing my debt.  I started with card with the the highest interest rate, and put as much money towards it as I could, while only making the minimum monthly payment on the other cards.  Pretty soon, the first one was paid, so I worked my way down.  It took years, and it was hard, and as I watched my friends graduate college, and graduate medical school and get their master's degrees, I was saddened and jealous.  I wished I was in their same position but I also realized that I had to get rid of my debt.

I paid off my last credit card in April of 2010.  Over $20,000, paid!  While many might read this blog and see that I currently have only "good' student loan debt (which is still debt so it's actually bad), I am only half way over the hill.  I still have a long way to go. 

And for anyone else out there struggling with debt.  You can do it!  It is going to suck and it is going to be hard.  But you CAN do it.


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