Ah, credit cards. U.S. consumers are estimated to owe $747 billion in credit card debt, and that figure does not even factor in financial obligations like car, student loans or any other synergistic investments. Anyone who has been in debt knows that it is easy to get into it but almost impossible to get out.
My parents did everything right
I had a very comfortable childhood and they very generously paid for me to attend college. They even bought me a car so that I could make monthly payments to them and not have to pay interest. My mother added me to her credit card when I was still in high school, so when I officially entered the world, I was debt-free with a savings account and excellent credit. The world was my oyster.
Then I decided to move to Los Angeles. I wanted to make my mark in the entertainment industry, along with millions of other people, so I began very, very low on the corporate ladder.
Eventually, I got hired as a personal assistant, but that gig didn’t last for very long, and I found myself doing more unpaid work and sporadic temp jobs. I was eventually hired as an assistant in the business and legal affairs department of a television network.
I had done a lot of financial scrambling to get to this point. For my first ten months of living in Los Angeles, I lived in an apartment that cost about three quarters of my salary. Couple that with gas (I was commuting at least two hours per day) and miscellaneous expenses: my “just for emergencies” credit card became my lifeline. Groceries, entertainment, everything went on the card.
Once I started making decent money, I had already amassed so much debt that it seemed like I might as well ignore it until I made enough money to REALLY make a dent in the balance. If I got a raise, I moved to a bigger apartment. I would occasionally flirt with being frugal, but basically charged what I wanted when I wanted. From outside, it looked like I was living a very comfortable life. From the inside, though, I was drowning.
Eventually, I decided I couldn’t take it anymore. I read any financial guides I could get my hands on (Suze Orman was my spirit guide). I had amassed about $20,000 in debt: money I owed my parents, as well as about $10,000 on my own personal credit card. It basically came down to this: I had to stop spending money. Immediately. Here is what I ended up doing:
Rent: I had been living in expensive apartments by myself for years, so I moved into a much cheaper apartment with a friend and cut my rent by two-thirds. My commute was still the same, but I saved almost $800 per month this way.
Monthly Payments: I chose one “debt” to focus on each month, making a larger payment for that one and making smaller payments for the others. This helped me feel mentally as if I was accomplishing something – when I saw a balance drop by the hundreds instead of the tens, it made a huge difference in my level of hope.
Using My Credit Card: I stopped. If I wanted to go out I made sure I had the cash to do it. I even taped a photo of an English countryside to my card, reminding myself that I was choosing debt over travel if I decided to use it.
Mentality: This may have been the hardest. It is very easily to rationalize a purchase, or at least it certainly was for me. Having a bad day? You deserve this. It’s been a while since you bought yourself new clothes? Charge away.
It took me the better part of a year to get this all paid off, but when I made that final credit card payment I felt unstoppable. I wish I could say that I’ve lived that way ever since, but credit card debt came back with a vengeance.
My husband and I were both laid off from our jobs and decided to move to India for a year so that he could work on a film and so that we could travel. was a wonderful, exciting time and I wouldn’t trade it for the world. But it was expensive.
When we arrived back in Los Angeles, he found a job quickly, but I struggled. I eventually took a relatively low-paying job as an assistant at a literary agency, but quickly discovered I had found the career for me. Eventually I became a literary agent and book coach (www.turnthepagebookcoaching.com), which has proved to be my dream career.
However, the debt had grown monstrously high once again, and we were forced to take a cold, hard look at our life. Once again, the key was to stop spending. All of the methods I used before were used again here, as well as a couple key additions:
Communication: This was not easy, but it was essential that my husband and I got on the same page financially. While we are both similar spenders, there were some major differences that needed to be addressed before we could really move forward. It was important to cheer one another on, and not allow ourselves to feel like failures if we went over the grocery budget one month.
Make a List of EVERYTHING You Owe: This was exhausting (and depressing), but it was the only way that we could manage to figure out how we were going to wade through the debt. Whether it was a student loan, a collections bill, or money owed to a friend, we mapped it out.
My path to a debt-free life is nothing unique. Eventually we will have a mortgage, college expenses for kids, perhaps even medical bills that we can’t pay. However, with the right tools in place I feel confident that I can lead the life I want to lead – and you can, too.
Megan Close Zavala is a literary agent and book coach. She has been a bibliophile all her life, and is thrilled to have been able to find a career that lets her read for a living, while also helping authors take their writing from good to great! For book coaching and writing advice, please visit www.turnthepagebookcoaching.com or find her on Twitter @TurnThePageBCE.