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saving money, living life, brooklyn
In January 2012, in the middle of a severe depression, I wiped out my savings to move into a 1BR in Brooklyn. Living paycheck to paycheck while trying to furnish an apartment and pay for medical care left me relying on my credit card. From January to August, I had racked up $5,100.
Up until August, I used my credit card like an ostrich. I knew that I would have to pay it off eventually, but I didn’t want to think about it. Instead of looking at the balance each month, I just paid off the minimum and pretended everything was fine.
Of course everything wasn’t fine but it took me months before I finally had the courage to take a step back and assess the damage I had done.
Unfortunately, I also had the ironic situation of using the credit card to pay for psychiatrist appointments. I was seeing the psychiatrist because I was depressed. The $350/hour appointments were putting me into credit card debt. Which was making me even more depressed.
That was a fun cycle.
It’s easy to rack up debt when depressed because, truly, nothing matters. You’re living in a darkness where there is no hope and no future.
You are always in a state of sadness so seeing a maxed out credit card doesn’t evoke emotions the way it should.
In fact, depression (read: your brain trying to sabotage you) wants you to stay miserable and being hopelessly in debt is a good start.
My foundation of financial smarts prior to the depression helped to let some rationality slowly seep in. It was enough to remind me to put money, when I had it, in a savings account.
It took me eight months to get back on my feet after using my savings to get a new apartment and move. Moving is very expensive in new york and I impatiently made the decision to move without saving up enough of a cushion. A rational mind would have stuck it out for a few months to avoid running on fumes, but my irrational mind needed to get out of that old apartment as soon as possible and nothing was stopping me.
It took eight months to go from zero to something in my savings, allowing me to have a safety net between paychecks.
You don’t need $5K in the bank before you start paying off debt.
Anything is better than nothing when it comes to emergency funds.
Having an emergency fund means you will use that money as a cushion instead of the credit card. It may be tempting to put down a large payment on your CC, but if you’re left without any savings then it’s very likely you’ll fall back to using the CC again.
Once I had enough of a safety net in place, I hid my credit card in a metal tin and put it in the closet. I didn’t want to carry it on me. I didn’t want to even look at it. From then on, it didn’t exist.
The easiest way to get through paying off credit card debt is to not accrue more in the process
This is a huge step. It was also my way of severing one of the ties to my depression. Like a rope tying me down, this was the first thread to unravel.
When I finally woke up and not only realized I needed to tackle this debt but finally had the motivation to do it, sitting down with a pen and paper was the easiest way to break everything down to seem less overwhelming. Writing down my balance, interest rate, and minimum payment made it real.
Another big help was Discover’s online debt-payment tool that helps determine the best payment to reduce debt.
All in all, it took me 10 months to pay off $5K. Could I have done it quicker? Absolutely. Did I spend money on luxuries during that time? You bet.
But in the end, what did it hurt? I paid more in interest, which I was well aware of when making these spending decisions. Importantly, I didn’t go back into debt.
One of the guilty pleasures I spent money on while also in credit card debt was my tattoo. After tip, it cost $800 in cash. I didn’t put it on my credit card, I didn’t use all my savings, I just allocated money to a luxury instead of the credit card. And I still made my planned credit card payment that month.
I’ll be honest, as good as being debt free feels now, being able to function like a rational person feels better.
For those of you who haven’t suffered from depression, imagine living in the dark all the time – no matter where you are. Everyone else can see light but you can’t. Try eating in the dark. Showering in the dark. Working in the dark. You can do it, but nothing is enjoyable. You know what’s the best thing to do when it’s dark? Sleep. And that’s what you do a lot of.
Working through depression was my top priority. Thinking about reducing debt couldn’t come until after.
I admit to spending money on trips, dinners, and splurges like the tattoo in an attempt to force myself to lead a normal life again. No regrets.
When I received my credit card statement this month, I had a huge smile on my face. It still doesn’t feel real to see $0.00 staring at me. The freedom I feel really is great.
In terms of debt, I still have a student loan but at 3% interest that is not nearly as stressful as the credit card. It’s also something I do not regret. Getting a degree has been a great investment in my life and every payment I make on that loan is worth it.
Another aspect of my specific credit card debt situation was having that debt reminded me of my depression. I can’t say I’m in the clear yet but I can function now, which is leaps and bounds above where I was two years ago.
Making each CC payment felt like that part of my life was still around and I couldn’t escape it. It was a reminder that those feelings could come back any second (and there’s days they do).
To me, paying off this credit card symbolized my struggle with depression and my efforts to overcome it.
Again, I’m not always in tip-top shape but I have moved on from the days where I couldn’t shower or eat. Eradicating this debt really feels like another weight has been lifted and I can move on a little easier.
It’s important to pay off debts that are holding you back so you can move on to better places in life.