Updated: Dec 18, 2021
No that is not my salary. Yes, that is my debt. I am 29K in credit card debt alone. I am not including my 53K in students loans in this debt-free journey because if I did not have credit card debt, paying my students loans would be so easy. I could do all the things I want to do like travel, save, and pay my student loans with no issues. But this lingering, always changing minimum payment for my student loans is... well... debilitating. I'm sure it started as just a small amount of debt. The combination of interest and paying the minimum which meant I had less to spend on myself for other expenses per paycheck made the amount climb faster than I could have thought.
I've tried to deal with it in the past. I remember I got hired for a weekend job at a popular chain retailer. I got ready, was about to head out the door, realized I might be late, and had a massive panic attack. I don't think I had one as big as that at the time. My roommate had to hold me to console me. I wasn't ready to deal with the massive amount of debt. Had I dealt with it then, I think I would be in a better place already, but I had to come to terms with my debt in my own time.
A year ago, I was happy living in my current apartment with the smallest amount of rent I will EVER pay in NY when I found out that BOTH my roommates were moving out. I was forced to find two new roommates on my own if I wanted to stay. I was under so much pressure when 3 days later I got laid off from my job. This was all during the middle of COVID when emotions were already high and I was learning that I still had a lot of trauma to deal with my past relationship that was certainly projecting onto my current one. Do I need to say it? Panic attack city.
Fast forward to a couple months ago I was feeling so exhausted when I realized I might need to find a new place to live come the new year. Match that with finding out I had some horrible credit, no savings, and the rent prices for a one-bedroom in NYC is horrific.
I didn't want to panic, but the feeling of doom was there. I quickly realized I needed to make a plan. I worked to figure out all the information I could. How much did I need to save? What does my credit need to look like? Do I need to search for a higher-paying job? Who can assist me in figuring out my finances?
First, I spoke to my brother about my credit and debt. He helped me realize that the ratio of debt to available credit was too close together and that was the main thing hurting me. My credit wasn't horrible and if I could work hard at paying down some debt and he could put me as a second owner on some of his credit cards, that ratio would get farther apart and we can slowly start increasing my credit. We wanted to increase it just enough that I could apply for a personal loan. A personal loan would consolidate all my payments into one, give me a smaller APR %, and make my payments lower. I could use the difference to pay the loan down quicker and I would pay less over time.
Second, I spoke to my current roommates. As much as I wanted my own space two things kept me wanting to stay at my current apartment.
1) The rent is basically a steal. At a minimum, I would be paying 3x the rent if I got my own place.
2) It would be so much more stress-free if I got my own place when my credit was better and my debt was lower. I want to be able to really enjoy my own apartment when I get one and it would make it that much sweeter to wait till I had less debt.
Third, I got a part-time job. I work Friday nights till midnight, Saturdays and Sundays. Yes, it sucks working a second job on a Friday after your main job is over. You just want to go home and watch Netflix or get a cocktail with friends. Instead, you're stuck at another job. BUT Let me tell you when I got my first paycheck from my weekend job I was so thrilled! I worked sooooo hard for two weeks for the extra money that came into my bank account. When I put that money towards a credit card amount and saw it decrease, it felt incredible.
I did it! I got approved for a personal loan! The monthly payment is not as low as I wanted it to be, but the APR is great and all my payments are fixed to one payment now! Additionally, my credit cards are at 0 balance, which is going to make my credit shoot up! This feels like such a great step forward and a big boulder off my shoulders.