Getting Real To Get Out Of Debt

Editor’s note: The world can seem a bleak place when you are in debt. You look on your life, and the lives of the ones you love, and there is nothing than debt, strict budgeting and denial of your most sacred and cherished wants. It isn’t like that. There is life after debt and there is nothing like the story of a debt-survivor to make you see this. Today we bring you Jon’s debt story and hope you’ll be inspired. Jon is a fellow blogger who paid off his debt and is now building a decent investing portfolio.

My name is Jon and I was in credit card debt. At the peak of my indebtedness, I was in debt of a little more than $10,000. I remember that time well. It was not fun at all. I was ashamed and embarrassed, especially since most of my friends and family looked at me as the financial expert. That’s what I went to college for after all, so I should be smart with my money, right? Unfortunately this wasn’t the case.

This is my story of how I got myself into credit card debt and how I eventually overcame it. I hope that by sharing my story it will inspire others to take action and change their lives for the better.

The Start of My Credit Card Debt

It all began my sophomore year in college. I met a lovely girl in the fall semester and we began dating. Things were great between us, but there was one problem. I didn’t believe someone could love me. I didn’t realize this at the time mind you, but that belief was playing itself out in my head.

Because I thought that someone else couldn’t love me, my natural instinct was to show them I loved them in hopes I could buy their love. So I started taking her to dinner all of the time. I would buy her gifts for no reason. By the end of the school year, I was in debt a few grand.

I went home that summer and got a job. But I made a fatal mistake. The job was so that I would have money for the upcoming school year. Not wanting to be buried in debt, I first paid off all my debt with my income, then saved the rest for the new school year.

On the surface this sounds like a smart move. But in reality, it got me into more trouble. This is because of two reasons:

• First, I now didn’t have enough money to cover my expenses for the year, like books, groceries, pizza, etc.
• Second, I never really addressed the elephant in the room, why I got into debt in the first place.

My junior year played out like the previous year, only worse. I was still buying love, but I was also charging books and other expenses because I didn’t have the money for them. By the time I went home for the summer, I was right back where I was the year before plus some, with close to $3,000 in credit card debt.

That summer, I worked again, but this time I saved my money so I would have enough to survive. When I went back to college, my girlfriend and I broke up, which was a good thing financially. I treaded water with my debt and graduated college around $2,500 in credit card debt.

From Bad To Worse

This is where the story should take a turn for the better. I move home, find a job, pay off my debt and live happily ever after. But that isn’t what happened. I graduated college back in the early 2000’s and we were in a recession. I couldn’t find a job.

The fact that I went to college to get a good job and now couldn’t find one destroyed me. I became depressed. I found that buying things made me feel good, so I started buying clothes and electronics. Before I knew it, I was in debt over $6,000.

Trying To Break Free

Since I was the “finance expert” I knew my debt was bad, so I worked on finding a way to at least pay as little interest as possible. My first move was to open up a new credit card. This new card had a 0% balance transfer offer. I moved everything over to the new card and was determined to start paying it off.

Unfortunately, I started to spend on that first card all over again! A few months later, determined again, I opened up a third credit card to take advantage of another balance transfer. As a side note, I have no idea to this day how I was approved for these credit cards without a job!

But the overspending continued because I never addressed the real causes of my debt. I suddenly found myself in over $10,000 worth of credit card debt.

The Moment of Truth

As I crossed over the $10,000 debt level, I was shopping for a new jacket when the proverbial light bulb went off. I remember asking myself why I was looking to buy a new jacket. I already had two at home, and I never even wore the one.

For some reason, this thought stuck with me. I put the jacket down and drove home. On my drive home, I did a lot of thinking and realized that I had low self-esteem and was depressed. I knew I had to work on overcoming these issues if I ever wanted to be debt free.

When I got home, I piled everything I bought over the years onto my bed and took a picture. I then put this picture in my wallet. It was a reminder to not just buy something to feel happy or loved.

My Debt Free Journey

Soon after my realization, I found a full-time job. I also was able to land a part-time job as well. I used all of the income from the part-time job to pay down my debt and even set aside a portion from my full-time job as well for my debt.

I set up a snowball debt plan to help me get out of debt as quickly as possible and in a little over a year, I was free from my credit card debt.

Lessons Learned

I learned a lot during my experience with credit card debt. Some of the biggest lessons include:

It’s easy to let the train get out of control. I found that the “high” I was getting from buying stuff wore off quicker and quicker, which in turn caused me to buy more and more just to feel as good.

You aren’t going to get out of debt until you address the real problem. I relate my experience to oil leaking from a car. My solution of transferring balances is like adding more oil to a leaky car. The real issue of why your car is leaking oil is under the hood somewhere and until you dig around a bit, you are never going to solve the problem. You are just going to continue the cycle of buy more oil and adding it. It wasn’t fun to admit that I was flawed, but I had to dig around under the hood and figure out the real reason for my overspending if I ever wanted to end the cycle.

Understand the power of visualizing. That picture in my wallet served as a great reminder every time I went to buy something. It forced me to stop and think instead of just impulsively buying something.

It will take time. I didn’t get into debt overnight so odds are I will not be getting out of debt overnight either. Be patience, but take the proper steps to speed up the process as much as you can by earning more money or cutting out some expenses.

In all, know that you can overcome your debt. It will take some work and will also take some time, but it can be done if you are truly honest with yourself and hold yourself accountable. Don’t just assume you have a spending problem. Take the time to dig in and figure out the real reason why you are in debt. It’s the only way you will break the cycle in the end.

Author Bio: Jon writes at Money Smart Guides, a personal finance blog that helps readers overcome their debt and start investing for their future. There you will learn that to be successful with getting out of debt and investing you only have to follow a few basic steps.

photo credit: Power kiting via photopin (license)