


This year, I really want to push my boundaries. I want to try new things that get me out of my comfort zone and make me uncomfortable. Lately, I’ve been meditating, doing yoga, running and I’m about to go run off to another country for 4 days where I know no one. And, I started this blog which has a weird, thrilling, frightening, slightly exhibitionist feeling to it. Yes, these are things that aren’t that big of a deal to some people–but to me, I am pushing my boundaries and trying new things. I am trying to think more positively and use my discomfort as a form of motivation and a fuel for action.
In addition to pushing myself physically, mentally and emotionally I also want to push myself financially. I am the type of person that likes to have a lot of money in savings. Given my recent posts on my hospital bill, job situation, etc I am sure you can understand why. However, I want to find the lowest common denominator of me being comfortable and able to pay my bills while also paying off as much debt as possible.
Today I paid off $2,000 in student loan debt, which will put my graduate student loans at just about $46,200. Knowing that I carry that balance at 7.9% interest is my real motivator. The interest is like the devil manifest coming to steal all my income and my soul. But I will show him! I can play this game! And that’s exactly what it is….a game.
This is a big deal for someone who doesn’t even make 2k in a month. I figure that the hospital bill getting covered 100% is nothing short of a miracle and I should re-appropriate that money towards my debt. Aside from the would-be-$1600-hospital bill, I’ve also made about $400 in extra income last month.
So I’ve made my biggest payment yet. I wish I felt better about this, but quite frankly I feel uncomfortable. And that is exactly what I wanted to do….make myself uncomfortable and find that new level of comfort within my finances. I still have enough money to have some fun in Iceland, pay rent and have some savings left over. I have several checks on the way and more independent contractor work coming up.
I also feel that making yourself uncomfortable (especially with finances) is a great way to kick yourself into action. I know I am more motivated to hustle, work hard, and make this work. I know at the end of the day it all comes down to me, and I need to make it happen. There are many generous people in the world, and I got a great hand out from the hospital. I want to pay off my debt, so I can truly live the life I want and be generous to others too.
A few months ago, I had one of my worst nightmares come true. I ended up in the ER, very sick, without insurance. Let’s just say it wasn’t pretty and it was pretty scary. Luckily, my partner was with me and he helped me get the care I needed. I was sick and disoriented. I didn’t really know what was happening or why. It was one of those surreal times when nothing made sense and everything seemed precious. After not being sentient, with eyes closed, I would open my eyes in a panic, relieved to see my partner next to me. I would close my eyes again hoping that my affliction would somehow resolve itself. After hours of being sick, whatever was inside of me was gone. I was better, but not well. I went home after a few hours, feeling more alive than I ever felt and yet also humble and miraculous.
In time, the bug healed itself. I got better and the euphoric sensation of being alive was suddenly overridden by the fact that I had just spent the night in the ER. Without insurance. I started to panic about what the cost would be and I knew it wouldn’t be cheap. I received the bill for the ambulance: $1,006. About two weeks later, I received a hospital bill for $1,600. About $2600 total for a 5 hour ER stay. They already gave me the courtesy of getting an un-insured discount, which knocked off $500 bucks. The news wasn’t as bad as I thought, but it sucked. It would defer my debt payback and take a large chuck out of my Emergency Fund.
I ended up applying for financial assistance and sent every little bit of information about me and my finances to the hospital. They don’t make this process easy and they want to know EVERYTHING about you. I realized this was a game and that they wanted people to fail. It is easy to give up and not try. I made it my mission to win the health care battle. Just in time for the New Year, I found out that the hospital covered 100% of my $1600 bill. I was elated and thrilled about this news! My financial injury was now to pay for the ambulance, or see the most expensive car ride of my life. I paid it right away, $1k suddenly gone. I was sad for a bit, thinking how great that would have been towards my debt. I felt relieved though that I was ALIVE, HEALTHY and that the hospital had pity on me and my financial situation. It was almost too perfect, having the bill go from $2,600 to $1k. All of the personal finance bloggers say you should have at least 1k in your EF—and in perfect, irony of life, that is exactly what I paid. I’ve always had an emergency fund but never needed to use it. Now that I’ve experienced an emergency first hand, I am so glad I have one.
Considering my debt amount, I would love to be one of those people with just 1k in their EF and throw the rest of my savings and income toward my massive debt. But sometimes it’s not that simple. I have a non-permanent, unstable work situation. I still do not have health insurance (at $400 a mo. It is just too much). Given my not-so-great luck at finding permanent employment here, there might be another move in the future. I have to plan and save for all of those things, while paying off my extraordinary debt. I am trying to stay focused, stay positive and remember how thankful and alive I felt leaving the hospital. It was my own story that reminded me to live life to the fullest and be financially responsible. I know, one day when I get that permanent job, I have health insurance and can relax, just a bit, I will slaughter this thing.
For now, I know this is another chapter in my life, but it’s not the whole story. I know that sometimes things happen that are outside of your control that truly suck. With my emergency fund and health intact, I can appreciate life and keep on keeping on.
What have you used your Emergency Fund for?
When you are in as much debt as I am, it is easy to think, I shouldn’t spend any money on going out or doing anything. Ever.
Let me tell you a story. When I was in New York, I was having a dinner with a friend and having an existential crisis about my financial future. My student loans were making me physically ill, every time I made a purchase I felt incredibly guilty and overall, it was affecting my sanity and quality of life. My friend sympathized with my situation, but told me to stay calm and pay off as much as I could, when I could. Seems simple enough right? I couldn’t believe his response. Did he not hear how much debt I have? Did he not hear that I am in for a lifetime sentence of financial purgatory? He then told me a story about a girl he knew, that has stuck with me to this day.
One of his co-workers was diligently saving for retirement. The woman never went out to eat or drink, never went on vacation and lived a very modest, reclusive life saving up for this big dream: retirement. In her mind, retirement meant freedom, trips, vacations, and anything she wanted. She was willing to deprive herself now for the opportunity of leisure later. After working and living like this for many years, the day finally came. She booked a ticket for her dream vacation to the Dominican Republic. Within days of her dream vacation, a freak accident occurred and she drowned. All that money she had saved up was no longer useful. The life she was waiting to live, had just begun before it ended abruptly. This story resonated in my body so deeply, I felt my breath deepen. I felt myself getting calmer.
There is no reason to stress out, limit my life span and have a heart attack over my financial situation. It simply is not worth it.
I am not saying that you should go out and spend all your money frivolously and do whatever you want. Quite the contrary. An interesting contradiction I find within personal finance is the mystery card of death. Let’s face it: You could die tomorrow or live until you are 100. And you should be prepared for both. How is that even possible? For me, it all comes down to conscious spending as well as conscious saving. Ramit Sethi says spend money on the things you truly love and cut back on the things you don’t . It’s all about priorities, planning and enjoying the simple pleasures in life. You don’t have to be wealthy to have a good life. There is a difference between being rich and wealthy, frugal and cheap. I consider myself extremely rich in experiences, love, friendship, family and health. I am not, however, particularly wealthy.
So how does someone like me enjoy the simple pleasures, truly live the life I want, pay off debt and save? Well, it’s tough for sure and takes lots of priority setting. In addition to constantly prioritizing, assessing those priorities at any given moment is also necessary. While my debt payoff is incredibly important to me, I am not going to be a hermit and do nothing until it’s paid off— that would take years and god forbid something happened to me, I’d be pretty bummed about just staying at home all the time.
As of now, I get a haircut once a year, never buy clothes, make my own face cream and deodorant (all natural, yay!), never get pedis/manis/massages (even though they sound so nice) and lately I only go out if it’s a groupon, scoutmob or a serious happy hour. I walk or bike to work and consider taking the bus a luxury. I meditate for free at the local center, go to a donation based yoga class or splurge and go to the $4 movie pub. To some, my life may seem uninteresting. I have a fun life and I am saving for the big priorities: paying down debt and traveling.
That is why, in a week from tomorrow I will be heading to Iceland (note: personal finance bloggers, please don’t stone me! ) I know traveling is a big no-no in the personal finance world when you have as much debt as I do. But I don’t care and I couldn’t refuse this awesome deal. IcelandAir had a crazy package that included round trip flight, hotel, breakfast and transportation for $600. HOLY COW! How could I say no to that? Traveling is my favorite thing to do ever AND that is CHEAPER than ONE loan payment. In my defense, I have at least 6 months of rent and basic bills in an Emergency Fund. If I am really struggling, I could get on food stamps (again) and defer my debt (which is something I never want to do). In short, I could still survive a few months on some very meager resources.
I’ve already made a budget for Iceland and looked up tricks on how to keep it cheap in an already expensive country. I also have plans to make a big payment on my loans before I go. All of this to say, I think my journey in life is going fairly well. I am paying more than what I need to on my debt and still affording myself some luxury. Life is a one shot deal. How would you change your life if you knew you would die tomorrow? My goal is to continue living life to the fullest while being financially responsible.
How do you continue to live life fully, while also remaining financially responsible?
I’ve been hustling for years, trying to make my non-profit income stretch even further. When in dire straights, the side hustles have become my main hustles and truly saved me from a life of destitution. Regardless of your work situation, EVERYONE can make a little money on the side. Even working full time, I have taken extra work in the evenings or weekends, or concurrently with my job.
Think of side hustling as leveraging your income and your social capital. Think of side hustling as creating more relationships and diversifying your revenue stream. I don’t like the idea that if my job ends tomorrow, that I am screwed. Having money come in from a variety of different places solidifies your presence and marketability in a variety of different fields, and allows for growth and income in multiple streams.
For you to make money, there must be a convergence (as Chris Guillebeau says) of your talent and the need in the marketplace. I would love to sing show tunes all day and get paid to eat chocolate, but that isn’t going to happen.
One of my first side hustles wasn’t making money at all. I was living in New York and my boyfriend and I were doing the dreaded long distance thing. He was planning to visit me for two weeks in my crowded, dark, semi-prison like apartment shared with 4 other people. Oh, and there was one bathroom and no living room (I’ve made a few mistakes). It was my first time seeing him in months and I just wanted to be alone, in a nice, warm comforting place that didn’t remind me of Rikers Island. I also knew I couldn’t afford a hotel. So what did I do? I went to Craigslist of course! Craigslist gets a bad rap, but if I could tell you how many jobs, gigs, relationships, furniture and interesting things have come from that site you would understand it is a magical place.
After perusing the different sections, I found someone who lived three blocks away from me who wanted a petsitter for the Xmas holiday in exchange for staying at her beautiful one bedroom in Brooklyn. Success! Her apartment was something out of a Crate and Barrel catalog and something I could never afford. For keeping her dog and cat alive, we got to have our own little home for two weeks all by ourselves. It was perfect. That same Xmas, I answered a different ad on Craigslist asking for Xmas dinner help. My boyfriend and I ended up at this Italian family’s house that was straight out of a Woody Allen film and ended up with a free gourmet dinner, $300 and a whole lot of memories.
Aside from finding petsitting gigs on Craigslist or from friends (networking really is the best for this), I have found extra work doing a variety of tasks. Here is my list of resources:
After all of these, I follow up with a thank you and let them know I am available in the future. Sometimes you never hear from them again. Sometimes it’s next week, or even six months later. The fact is, you have a network and it can be utilized. You have skills that can make you money. You can do a variety of different work and get paid for it. At the end of the day, you have to be willing to put in the work and TRY.
So, what are you waiting for? What will you use that extra income for? You all know mine is going towards my debt payoff! Post forthcoming.
Looking at my total student loan debt, then at my checking and savings account can easily send me into a tailspin. They are hard numbers to grasp and the math just seems impossible. After feelings of sadness and regret, I inevitably think, how did I end up here?
For starters, it wasn’t always this bad. In 2006, I graduated with an arts degree, unsure of what the hell I was going to do with my life. From the age of 17, until the time I graduated I had always worked. I worked such glamorous jobs as an office assistant, cashier for a pizza parlor, and even as a telemarketer (we use to have this fun game: whoever gets hung up on the most, WINS!).
In that time, I did realize the value of money, budgeting and hustling; for almost a year I saved up making minimum wage to study abroad in Spain for a summer. I did just that and it sparked my interest in travel. When I graduated, I was unsure of my future and it finally hit me that I was in student loan debt. Luckily, I had recently fell into a job in arts education and non-profit management at my school. I was able to keep that job and found two other part time jobs to keep me afloat. 8 months of juggling three jobs, I finally found my first real adult job. And it was pretty amazing.
For the next three years, I worked at a job a year earlier I would have never dreamed of getting. I worked in arts education working with youth and facilitating community programs. It was a pretty killer job, but being a non-profit the pay was low. I was living in Los Angeles and my starting salary was 30k. Within those three years, I got raises to 32k, then 35k and ultimately 38k. In Los Angeles, that is not an exorbitant amount of money by any stretch of the imagination. But being frugal and mindful, I was always ok. I preferred (and still do) to spend money on experiences and not things. When I finally reached 35k and ultimately 38k, I had gone into extreme savings mode. I was saving $600 a month and diligently paying off $250 a month for my student loans. After working my butt off for three years, and reaching the top of what I could do at that job, I was craving more. I felt successful, yet stifled. On a serendipitous work trip to New York, I decided to check out some of the grad schools there just for fun. A month later, my friend and I dared each other to apply, half thinking it wouldn’t really happen. Flash forward, six months later and I got into the #1 ranked program at my dream school.
HOLY SHIT.
At that caliber of a school, we’re talking 52k for a year of school. Luckily, my program was exactly one year. There were many nights spent contemplating my future. It was at the beginning of the recession and I had this amazing job, which would keep me settled and secure—but I also had this opportunity to pursue my dream. I had always wanted to get a masters, and looking back at my journals from three years earlier, when I was in a much worse spot, I had written that all I wanted was to go to this school.
I decided to quit my job, move across the country, leave my family, friends and boyfriend behind, all for the uncertainty of graduate school. I saved up for 14k before moving to New York. Ironically, this was the same amount of student loan debt I still had left. I kept thinking, what if I don’t go and just pay off this debt—I can be debt free forever. But I went the other direction and plummeted myself deeper into student loan debt. Upon moving to New York, I was offered a staggering 89k in student loans. Just looking at that number made me queasy. I did the math, looked at my savings and immediately shaved off 16k of that. I only accepted 73k in student loans. At this point, that was still a crazy, incomprehensible number. While in graduate school, once again I managed to have three jobs to pay for my living expenses: teaching artist, assistant and secretary. I was determined to live off my income, so that I could only use my loans for tuition. In my last semester, I was able to pay 10k in my program tuition from student loan money I didn’t use. Working my butt off and hustling had me graduating with a total of 68k. This is 30k less than originally expected.
I wish I could be more excited about that.
Going to graduate school and living in New York was single-handedly the most difficult, intense and amazing experience of my life. I graduated in May 2011 and was confident, relieved and excited to finally enjoy New York as a person, not a student. I had several jobs, but was looking for the perfect, full time job which I so desired. In two months, I had twenty interviews. Yes, twenty interviews. One of these days, I will actually write about the hilarity of those interviews as well. After many close calls, of me being one of two candidates, many times I was not chosen because I didn’t have enough “New York experience”. Fuck me. What was going to grad school and working in New York the past year for then? During this time, I was also in a long distance relationship. My boyfriend from earlier, moved to Portland, Oregon to pursue school as well. Any “discretionary” income I had those days, was used to visit each other every two to three months. After several months of not getting the job I was looking for, the loneliness of being away from my partner was getting to me. Anyone that has done long distance, let alone for two years, knows this. You move or you break up. I wasn’t ready to throw in the towel and things weren’t exactly going my way in New York. A year ago, I decided to move to Portland. I knew the economy was bad, but how bad could it be? I got extremely lucky and found a part-time job my first week here. Within two weeks, I found a full time job. Downside? They were both seasonal. I have never seen or heard of so many part-time, seasonal employees in my life until I moved here. Essentially, I have been looking for full time work in my field for the past year. Also in the past year, I have worked a variety of iterations as part-time, full-time/seasonal and independent contractor.
I am not like most Portlanders. I am not looking to retire and I actually WANT a full time job. And looking at my debt, this is what I need to accomplish my goals. I don’t think this is where I want to stay, but it’s where I am for now. The upside is having such a transitional, ever-changing employment situation here is MUCH MUCH easier than in NYC or my hometown of LA. My rent is $400 and I walk to work every day. I have been on and off food stamps and overall, making it work. In the past year and half since graduation, I have paid 10k in principal (and much more in interest) without having a permanent job. Throw in a cross country move, a mini vacation and plenty of visits from family and friends, I dare say I am proud of myself. But in 2013 my goals run much deeper. I want to get a full time job, and pay off 15k in my graduate student loans. My undergrad loans are about 9.5k and at a nice 2.4% interest rate. My graduate loans are at 48k and at an astonishing 7.9% interest rate. I get $400 in interest tacked on every month. That is my rent! STOP THE INSANITY! For my own sanity, I do need to pay this off as soon as possible. Many things have happened, both good and bad, up until this point. I have to remember that life is cyclical and it wasn’t always this bad. I have to have faith that things can change and I can be in control.
The future awaits.
$57, 426.14.
The current amount of student loan debt in my name, all for the curious pleasure of having B.A. and M.A. added to my résumé. I was always told student loan debt was “good debt” and that one should value education. To an extent, I still believe those things to be true. However, I don’t believe that education should be this expensive. Young people should not be saddled with this burden.
I could go on and on about the scam of student loans, the fallacy of grad school, and the overall business higher education has become. But this is not what this blog is about. It’s about something entirely different, because quite frankly the situation has become a Do or Debt situation. Debt simulating my very real, metaphorical and financial deaths; I must save myself from this fate.
This blog will be my attempt at keeping myself accountable for paying back this large sum of money. I am not waiting for any bailouts and I know full well the onus is on me. In addition, I am looking to create a community of like-minded people, to motivate and inspire each other. I am a personal finance nerd and love reading blogs and books on the topic. However, I never feel like I can completely relate to the stories being told.
The standard narrative is that people get into debt because of their lifestyles. I’ve read all the stories about people downgrading their lifestyle, selling their cars, homes, and electronics to become debt free. I’ve read about people making 100k, but can’t pay off 20k in debt. But what about the rest of us? I’ve always subscribed to and maintained a very minimal lifestyle—and in regards to income, I am barely making 20k a year (clearly, not by choice). Last year, I moved from one coast to the other with two suitcases to my name. I’ve never had a credit card and in general, I’ve never had a hard time paying my bills. I don’t have anything to sell or to downgrade.
So what is the answer?
My only real solution is to make more money. To increase my income potential and continue chipping away at this enormous debt, that keeps me up at night. In this moment, my work situation, like so many others, is unstable. Ironically, my income was much higher before I went to grad school and I am still transitioning into this new city. I’m very much into side-hustles and making it work. In my dreams, I will be debt free in 4 years. It’s an ambitious goal and with my current income, absolutely not possible. 
But I am positive that 2013 will bring so many good things—a change in jobs, increased opportunities, community and an outlet for writing on this blog.
Tonight, I will rest a little easier knowing I have made a commitment to myself (and the internet) about my goals. Tomorrow, I move forward, even at a snail’s pace with my debt payoff.
