August 31, 2015

Dear Debt,

The end is near. I see myself breaking free from your chains in the not-so-distant future.

While my heart yearns to break free from you and get my life back on track after you’ve bankrupted me, I’m scared.

I’m scared to be alone. You were my first love right after college. You made me feel important, like I was worth something.

Everything I’ve ever known in this life, I’ve known it with you.

Who am I, if not standing in your shadow? After nearly a decade together, I don’t know who I am without you.

Debt, you were there to get me through college. You helped me go to my dream school. You pushed me harder and harder, just so I could keep up with you.

You’ve pushed me so hard, that I thought I might never come back. But I also don’t want to focus only on the bad stuff. I know you’ve given me many opportunities, too. Without you, I might have never gone to college. I wouldn’t have the career I have today.

It’s all because you pushed me. For better or worse. But it’s my time now to figure out who I am without you.

I don’t love you anymore and quite frankly, I don’t need you anymore either. I’m scared to be without you, but this is a path I must walk alone.

It’s over,
Melanie

Do you want to write your own dear debt letter? I’m always accepting submissions!

This post is in: Uncategorized

Sorry for the disappearing act folks. That was completely unintentional on my part. About two weeks ago, I got slammed with work — I edited a short book, had several rad coaching sessions with awesome students, and kept writing and writing, except it was all for clients. On top of all that, I’m planning A LOT behind-the-scenes for FinCon and an upcoming blog tour.

It’s all fun and good stuff and it still feels weird that this is my life. I’m really bummed though that I neglected my baby, Dear Debt. I do feel the most at “home” here and want to give it the love it deserves.

I want to make sure I’m staying true to the point here and keeping myself accountable to paying off debt and inspiring others to do the same. The irony is that the money that pays off that debt comes from clients and not this site — but I still need to treat this as my number one client and keep it all in perspective.

Anyway, I wanted to share a little about what’s going on and also share my new debt repayment numbers!

This month was not as impressive as last month, but still more than my original goal. As I mentioned before though, I got some one-off payments that hit last month, which I knew weren’t coming in this month. But after all is said and done, I was still able to put $2,500 to debt! I’m particularly excited about this update as I got rid of my last 7.9 percent interest PLUS loan!

That interest rate was killer and now I’m dealing with those pesky 6.8 percent loans and a few thousand at 2.3 percent for my undergraduate loans.

Undergraduate loans: $5,043.27
Graduate loans: $15,979.91
Total: $21,023.18

I’ve paid off $36,000 in debt since January 2013 when I started this blog. I am so freaking close to being under 20k! I am so ready for this to be done. For the first time in my life, I can see the light at the end of the tunnel. Debt is no longer something that I will have “forever” but something that I will say, sooner rather than later, that I’ve overcome. It will be such a sweet payoff. I know some people say getting out of debt is anti-climactic, but I really don’t think that will be the case for me. I think I will cry and scream — and my dream is to host a debt payoff party. Hey, I can dream and plan :)

What’s new with you? What are you looking forward to?

This post is in: end of month update

A few days ago, I was going on my semi-annual purge and getting rid of some stuff. I was sifting through the piles of paperwork on my desk. Check stubs, tax forms, I9s, and there it was…a check.

A check that I wrote to myself three years ago, when I was struggling to get by financially and emotionally.

The check, from me and made out to me, was for $50,000 and represented the salary I wanted to make. During that time, I was making $12 per hour in a seasonal job and had recently hit my lowest point — succumbing to food stamps to help me get by.

 

The check in question + my old food stamp card. Oregon's food stamp card is literally called the Oregon Trail card.

The check in question + my old food stamp card. Oregon’s food stamp card is literally called the Oregon Trail card.

At the time I felt stuck. Stuck in someone else’s life. This wasn’t me. I was never “supposed” to be on food stamps with a master’s degree from NYU. I wasn’t supposed to be in a low-paying temp job.

But there I was, stuck in this situation. I was really depressed because I felt I wasn’t myself. I felt I lost my potential and that I had wasted my (very expensive) education. My mind would run in circles and every day, on schedule, I’d break out in tears for a new reason.

It wasn’t a pretty time. I found low-cost therapy so that I could chat with someone about my feelings. It helped a little, but I still felt stuck.

I remember calling my mom one day — one of the many teary phone calls over a period of two years — and she encouraged me to think of the future and stay hopeful. She said, “Write yourself a check of what salary you want to be making.”

Reluctantly, I did. I made it out for $50,000 and kept it in my desk for safe keeping. Over the next couple of years, I’d look at it and think about just how far I was from that goal. Even when I had my full-time job, I was only making around $30,000.

When I wrote that check $50,000 felt like a million bucks to me. It felt so far out of reach. I thought it was a reasonable salary and one that I should strive for.

Just last week when I was cleaning my desk, I saw that check and I started to cry. Holy shit. It took me a little more than three years, but I did it. I am making $50,000 (if not more). I cried because I never thought this day would come.

My mom, one of my great supporters, always told me to not lose hope and keep up with the positive thinking. If you’ve ever been in a rut, or in a deep depression, you know just how hard this is. It feels like you are swimming upstream and drowning. Sinking. But you keep working harder, but it’s freaking exhausting.

I’ll be honest. For a long time I thought this positive thinking stuff was bullshit. I thought that you couldn’t possibly change your life or your world from positive thinking. Things were good or bad and that’s it.

I was very narrow-minded and stubborn. Cynical. I didn’t believe in this new-agey nonsense. But even though I didn’t believe it at the time, it was my life-preserver. I needed something to believe in — a little bit of hope. So even though I thought it was lame and weird, I started to think positively. I wrote that check to myself and tried to see the best in situations and not the worst.

Now, I see that check and feel like that positive thinking manifested itself into reality. I think the problem is we often think that positive thinking will have immediate results — but as I’m seeing, it can take years. It’s about resetting your mental energy and attracting good things in your life.

So if you’re struggling right now and feeling like nothing good is happening — like it’s all worthless and pointless, don’t lose hope. Know that you are worth more. Good times are ahead. Your effort to change will create something positive, eventually (even if it’s years away). And remember, being in a bad situation doesn’t mean you are a bad person. Keep on swimming.

This post is in: personal finance

Hey friends. Quick favor. If you dig my blog and like what I do here, would you mind nominating me for Best Debt blog? You don’t have to be a blogger to do it and you don’t need to fill out the whole thing.

But I definitely recommend:

Martinis and Your Money — Best Podcast

Budget and the Beach — Most Humorous Blog

Frugalwoods — Best New Blog, Best Frugality Blog

Stefanie O’Connell — Best Freelancer

I voted for others as well, but some things I gotta keep secret 😉

 

This post is in: debt

August 4, 2015

As a personal finance blogger, I love a good deal. I enjoy saving money any way I can.

I’m always looking for ways to get things cheaper. After all, when you are in debt, every dollar matters.

But for the past few months, I’ve started to change my tune ever so slightly. I realized this after reading post after post of people saving money on certain things and getting it for the absolute best price.

I started to feel bothered by this, but I couldn’t really put my finger on why that was. Saving money is a good thing, right?

After a few months of thinking about it, I realized that I’m bothered by the fetishization of saving money, at all costs.

I think in our quest to save money at all costs, we forget that there are real people behind the products and services we buy.

And how many of us really think about that? So when you choose to save money, who are you really supporting?

Let’s face it, we vote with our dollars, so every dollar you spend, you are (like it or not) vouching for a company and a values ecosystem that you may or may not even agree with.

So, when you decide to save money and get cheap items of clothing, coffee, chocolate and the like, you aren’t just saving money. You are making a statement.

You could be supporting sweat labor or insane working conditions. You could be taking money out of your own community. You could be limiting the chance to support someone doing something that has incredible value.

I think what really made all of this clear for me is being my own boss and seeing just how people can undervalue you. People are looking for the best prices, the best deals, at all costs.

Too often people want me to work for free or at an insulting amount. It’s frustrating to tell someone your rates and have them go somewhere else for someone who will do it for free or at a rate that I’d never consider. I know these people are not my ideal client.

But my point is that, as consumers we so often champion the virtues of saving money, showcasing our savings like prizes on a mantle.

What we don’t consider is the other side. The small business owner trying to make ends meet. The coffee grower abroad working 16-hour days.

We don’t see the people that we choose not to support.

The means of production is so far removed from the actual products, which further encourages more mindless consumerism.

Yet many of us say we want to be more mindful consumers. But are you willing to spend more money on things that support your values? Support other people? Your local community?

In my own quest to have a deeper relationship with money and be a mindful consumer, I’m going to really think about the purchases I make. Saving money isn’t the only thing to consider.

Money is political and I want to make sure I’m spending in alignment with my values and “voting” appropriately.

If you want to change the world, you have to change the way you spend.

This post is in: saving

Every single month, as the payments start to trickle in, I hold my breath a little.

“Will I make my goal this month?” I think.

My goal is to put $2,000 per month — or the equivalent of my monthly salary last year — to debt, in order to be debt free by May of 2016.

This month, I received a few payments for projects that I had worked on for months, so it was good to finally see that pay off. That, plus some extra work thrown in there, made for a very good month.

This month, I put $3,482 to debt.

I can hardly believe it. I told my friend about it and she immediately worried about me. “Are you saving money for taxes?!,” she exclaimed.

Yes, I’m saving for taxes and still saving a nominal amount for my emergency fund and other targeted goals. What can I say, I’m making more money — which is still weird for me to admit.

For so long I totally embraced the starving artist/low-paid nonprofit worker mentality. It’s a comfortable place and you can always make self-deprecating jokes about it. However, being broke is anything but funny.

I never want to go back on food stamps again. I never want to make 10 dollars per hour again. If I had to, I would — I never, ever want to think I’m too good for work. But I also want to value my time and accept that I DO have more worth than my previous jobs financially dictated.

This is something I want to write about, as I’ve been feeling a lot of guilt lately. Odd, I know. I feel guilty for making money? Yes, I do. I feel like it removes me from the people I am so passionate about helping. The chasm between working class and middle-class is so large, an ocean can run through it.

Anyways, those are some things I am dealing with in the wake of finally making more money. But that extra money is allowing me to put more to debt.

So, after putting so much to debt, what’s left?

Undergraduate loan: $5,139.51
Graduate Loan: $18,296.67
Total: $23,436.18

While, I’m super proud of my progress here, one area that was a bit more murky was my $100 per month Spending Diet. I hit some obstacles this month that confused me. Namely, my parents were in town and it was my boyfriend’s birthday. I quickly realized it would be impossible to meet my $100 budget if I considered those things as part of “fun.”

Aside from that, I went a little over, once again with my food weakness. But I don’t regret spending money on my boyfriend’s birthday or while my parents were in town. That is what I think of as money well spent.

Also, I’m trying to train my mind to focus on the positive. I could beat myself up and feel relentless guilt about spending more than I wanted to this month. But instead, let’s focus on the fact I blew my goal out of the water! That’s what’s most important to me — that I stay on track with becoming debt free.

I know I’ll get there. I just need to focus on one day at a time. Day by day, step by step.

How are you doing on your BIG, audacious goals?

This post is in: end of month update

One of the main reasons I started Dear Debt was to inspire people to get out of debt — to create a community of like-minded people, who shared their struggles with debt, as well as their dreams about what life is like after it’s all paid off.

I’ve been “lucky” in that my only debt is from student loans. Heck, I didn’t even get my first credit card until two years ago! But I know many of you out there are struggling with sky-high interest rates and are buried in credit card debt.

I can only imagine how frustrating it is — especially with interest rates that can be around 20 percent or more.

A year ago, I would have told you to hunker down and limit your spending and hustle like crazy to pay down your credit card debt. That part is still true.

But there’s an extra layer that I think can make the process a whole lot easier: the Payoff Loan™.

The Payoff Loan™ may help borrowers with credit card debt simplify their payments and pay much less in interest. So instead of paying multiple credit cards and paying exorbitant interest rates, you’d pay one loan at a (potentially) better rate.

Borrowers can get a Payoff Loan™ from $5,000 to $25,000 at fixed rates between 8 and 22 percent APR with a repayment term of 2-5 years (your choice). If you can get a better rate with Payoff than your credit card, this makes financial sense.

Screen shot 2015-07-26 at 10.21.50 AM

Currently, the Payoff Loan™ is not yet available in Alabama, Arizona, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Minnesota, New Hampshire, New Jersey, Pennsylvania, South Dakota, Texas, Vermont, Wisconsin, and Wyoming.

To be eligible, candidates need to have a FICO score of 660 or higher with a debt-to-income ratio less than or equal to 50 percent.

Aside from making financial sense, I’ve worked closely with the people at Payoff, and they are legit.

They are real deal people (Yes! You can talk to real people from their awesome member experience team!) who care about getting people out of debt, because they realize that life is so much more than a debt payment.

What I like about them is their transparency. They clearly state there are no application fees, no prepayment penalties, no late fees, no annual fees, and more.

You can fill out a quick application to check out your potential rate, with no impact on your credit score. If you find something you like, you choose an offer and receive the money in the bank.

Pay off those pesky cards, save money on interest, and simplify your bills.

So, who do I think this is right for? People struggling with credit card debt who are ready to dump that debt.

However, here’s the crucial part. You have to be ready and understand the root cause of why you got into debt in the first place. No consolidation or refinancing plan will work if you keep borrowing as a band-aid.

So, if you have treated the root cause of being in debt (living beyond means, not making enough, not having an emergency fund, etc.), I think this can potentially be a great option.

As I mentioned, I don’t have credit card debt, so don’t have firsthand experience with the loan, but I do know that I trust Payoff and they are good people. They get what it’s all about and want to see people succeed.

So, if you are in credit card debt, Payoff is another option to look into. As always, do your research, understand the terms, and do what is best for your situation. Remember, I’m not a financial expert 😉

But I do want to share cool products and services, knowing that they could potentially help someone.

PAYOFF_LOGO_2015

I’m an affiliate of Payoff, so if you use my link, I’ll get a bonus to help Dear Debt keep going. As always, I only write about things I’m truly passionate about — because let’s be honest, ain’t nobody got time for that!

This post is in: Uncategorized

July 25, 2015

Hey party people! I’m enjoying a nice weekend with my parents in town, so thought I’d share some weekend reading to keep your brain satiated.

Favs around the web:

Why I Fear Being Wealthy via The Financial Diet — a thought-provoking piece on money and attitude.

How Much Is Your Time Worth? via The Broke and Beautiful Life — a timely piece, as I have outgrown many of my side hustles.

How to get “back on track” with a goal when you’re backsliding, hard. via Alexandra Franzen, who is pretty much my favorite writer and ultimate girl crush.

Some of my posts around the web:

How To Save for a House While Paying Off Student Loan Debt in 3 Simple Steps via Student Loan Hero

Are Your Extra Student Loan Payments Being Applied Correctly? Follow These Steps to Make Sure You’re Maximizing Savings on Interest via Student Loan Hero

How To Prepare for a Spending Diet via GoGirl Finance

Failing To Negotiate Your First Salary Will Cost You $65,173.56 via The College Investor

Cool tools:

Budget Checkup by Fidelity — such a great resource!

Unbury.me — wondering if you should choose Snowball or Avalanche? Do the math.

Aside from writing, I’ve been doing some coaching, consulting, and event planning, which has been really fun. I love writing, but I’m also an extrovert, so it’s been great to interact with others and help create something on a different level.

I can’t wait to share more and hopefully meet all of you at FinCon! Tell me, will you be there? If you’re a new blogger, apply for the scholarship. It’s totally worth it!

Have a great weekend!

This post is in: Uncategorized

I remember it like it was yesterday. Walking out of the office, for the last time with all my stuff. I wasn’t coming back.

A year ago, I jumped ship at my old job to give this freelance thing a try. It was a scary, bold move, but it felt absolutely right.

A year later, I am so happy I quit. I have had no regrets at all. No moments of wanting to go back. That’s not to say it has all been easy. Far from it.

What I’ve realized about being your own boss, is that it takes an incredible amount of effort to build something. But it’s worth it, because eventually you’ll see the fruits of your labor. I love that I’ve been able to think of new ideas and implement them through events and articles. I enjoy that I get to try new things and every day is something new. I am so grateful that I’m in a place where work is coming to me, rather than me being on the pitch merry-go-round.

I feel like I can breathe a sigh of relief. I haven’t failed. I didn’t give up (even when I wanted to). All of my worst fears didn’t come true.

The unknown path ahead was something that contained opportunities I never saw coming.

Most of all, I’m glad I had the faith in myself to jump and actually quit. I remember speaking to my mom when I made my decision. She was nervous for me, but knew that I had made my choice. She has seen how I have blossomed and is my number one supporter. I love her for that.

I hardly ever use the word faith in my personal life, but I can’t think of a better word for what I felt when I quit. I believed it would work out before I could see it. I knew there was something bigger — and I was ready to search for it.

I didn’t have every step figured out. I didn’t have a year’s worth of expenses saved up. I didn’t have my debt all paid off.

There were so many things telling me “no,” but I still said “yes.”

Sometimes faith is about doing something that you know people don’t agree with and doing it anyway.

Faith is also about leaving your comfort zone and knowing that it will work out. What most people don’t know about my journey into freelancing is that when I quit, I had lined up a 20-hour per week remote writing gig. Because of this gig, I felt comfortable quitting and knew I would at least make what I did at my old job.

Quickly I realized the work was mind-numbingly boring. It was taxing, repetitive work and I was getting paid pennies per word. I was a content machine and felt depleted every day.

After a month and a half, I knew I couldn’t do the gig anymore. But it was my safeguard. It was the reason I felt comfortable quitting. How would I bridge the gap and make up for a loss of 20 hours of work per week?

I was scared and didn’t have all the answers, but knew I was unhappy. I didn’t leave my old job to be unhappy and creatively unfulfilled. So, I left and I hustled.

Luckily, it was right near the start of FinCon and after that I was booked up again. I got better paying work. More creatively fulfilling work. I made some great connections with companies that I’m partnered with today.

Something I said on Michelle’s podcast the other day rings so true. You have to let go of bad clients, bad relationships, and unfulfilling work. How can you ever let the right things come to you, when you are devoting all your time and energy to the wrong things?

You need to carve out a space to be open to new, better things. You will stand alone for a while and wonder for a second if you made the right decision. You may even be tempted to crawl back to your old clients, begging for some work.

But it’s better — every single time — to focus on better opportunities.

My freelance journey has been a roller coaster, sprinkled with a lot of surprises and successes, as well as a good dose of anxiety and a huge learning curve.

There’s one thing I know, though, I haven’t done this alone. So, thank you. I am so grateful for you (yes, you).

This post is in: career

Hey debt fighters! I have another great, yet heart-wrenching dear debt letter for you today. Today’s letter comes from a new blogger, so I encourage you to stop by, say hello, and encourage him! We all remember being the new guy/gal, right? Drop a line and say hello. You can find Ryan at dadindebt.wordpress.com  and follow him on Twitter @dadindebt

Dear Debt,

The water is cold. Yes, my gas is cut off.

So let me paint the bigger picture. I’m the husband of one beautiful wife, and the father of two wonderful kids; aged 22 and 16. Both the kids live at home (although the 22 year old wishes like hell he didn’t). We live in a big fancy house in the big fancy country club. We have three cars. I have a great job and my wife hasn’t worked in years.

While I make well over six figures, we have exactly $0 in our savings account and we have exactly $23.19 in our checking account. Today is the 13th and I don’t get paid again until the 15th. Oh, did I mention our gas is cut off? I forgot to pay the bill last month and we were out of town the first half of this month when the notice came in the mail. It’s been off since the 9th. It’ll be turned back on again on the 15th so until then, cold showers.

Why is this happening?

Well, in a nutshell, debt. We are drowning in debt. I have over $50,000 in consumer credit card debt, $48,000 in my son’s student loan debt, $21,000 in auto loan debt, and $530,000 in home debt (keep in mind our house according to Zillow is now worth about $466,000). Yep, it’s pretty bad.

The good news is I’m fed up. I’m turning from mild mannered well paid consultant, husband, and father, in to a middle-aged debt destroyer! The decisions will be tough. The measures may be austere. But enough is enough.

This post is in: dear debt letter