Now, if you are looking for the best blog to follow to fix your finances, make sure you follow my blogger bestie Ellen from Ask Away. She not only wrote a book about finances (you can purchase here), but she also runs a Facebook group (please let me know if you’re interested in it, and I’ll give you her email), and she has free printables on her blog ALL the time! I paid off my debt a little differently than her, but this is what worked for me, and my lifestyle at the time.
HOW I GOT INTO DEBT
Let me tell you about how I got into this mess. I was always extremely good with my money. I opened a savings account right after I got my first job at 15 years old. My mom and grandma always told me I needed to make sure I had a savings and that I knew how to put money aside. When I went to Poland, I decided to take my savings and spend it there. Eventually I closed my savings account and opened a checking account and thought I could put money aside in that account as well. I opened my first credit card when I was 18 and was really good with paying it off, on time, and in full. My mom taught me how to use credit cards wisely so that I could build up credit. I was in college and had to buy books because my student loans didn’t cover books and that credit card increased to $2,000 worth of debt when I was 21. At the time I was dating this guy who I thought was “the one.” He paid off that balance for me.
Fast forward to when he lost his job and ended up going on unemployment and got comfortable with not working. I had to pay our bills. Our phones were in my name, and his car and car insurance was in my name. He didn’t have money to pay anything (or so he said, but he bought cigarettes, car parts, and food every single day, multiple times a day) and since I had it embedded in my head to always pay at least the minimum on my cards and accounts that’s what I was doing. I would bounce balances around on different credit cards. I would pay for our phone bill with my credit card because I didn’t have money, then pay the minimum to make sure I kept up with it. He was very manipulative, and I somehow ended up paying for his cigarettes, food, energy drinks on the daily, and his car parts eventually. He most likely had more money than I did and I was working my ass off. I had more than one job. Within a few months, this somehow snowballed to over $5,000 worth of debt. Then I went to school for my MBA and had to pay for books again, on top of still paying our bills. When we broke up I had way over $5,000 worth of debt (that he refused to pay for, and that’s not including the bills that I was constantly paying off) that I had been trying to pay down, and couldn’t. I eventually had the title and insurance of the car switched to his name, and I fought to get only one phone (mine) on the bill.
Fast forward a few more years. I had moved to Texas hoping to have a fresh start. I should have paid off some of my debt first because I struggled. Thankfully my parents helped me, but I still struggled. I came home and a few months later I got into a car accident. I came around a blind turn and an older woman was stopped with no brake lights (not sure if they weren’t working, or if she was just sitting in the road without touching the brakes) and her excuse was she was watching Bambi across the street at one of the houses. Even the police officer that came to the scene of the accident was flabbergasted at this. I had to pay for $11,000+ worth of damage out of pocket, because it was technically my fault since my car just lightly side swiped her car (you could tell that I swerved to avoid her even though it was a blind turn, the officer complimented me on trying), so here came my credit cards. My debt had sky rocketed to $25,000 worth of debt. I refused to let my mom look at my bills and see how deep of a hole I was in, but she told me that if I’m going to live under her and my dad’s roof, that she was going to sit down with me and try to help me learn how to get out of this mess. My mom was shocked at how much I owed. To make it worse, a few years later I was sucked into not one, but TWO MLM’s. I will highly recommend that if you are already in debt, DO NOT think that an MLM is a get rich quick scheme. I lost close to $3,000 because of those, so it set me back while I was doing my best to pay off my debt.
STEP ONE: FACING THE MUSIC
We sat down and looked at every single credit card I had, how much I owed, how much interest was on each card, and what the minimum balance was. We took a look at what my monthly bills were. This included student loans, car payment, medication, gas to get to work, and my phone bill. The one thing I refused to do was go back on my parent’s phone bill, only because it was the only bill that I was able to pay for and I had my own bill since college. My mom was against this because I would’ve saved approximately $90. She knew I was stubborn and told me, fine, then that will be the one thing I won’t force you to change. We outlined all of my bills and wrote them down on a piece of paper, and I later put them in an excel file.
STEP TWO: BUDGET PLAN
Below is an example (amounts and salary is approximate, I can’t remember exactly what it was) of how we outlined all of my bills, this isn’t the exact plan because I can’t find that one, I wish I could. This gave me a clear picture of what we were up against. I say we, because my mom really helped me out. I would say 90% of the work in those first few weeks was all my mom’s doing. She got my ass into gear. I lived paycheck to paycheck for that first year. Any extra money that I got went straight to my credit cards.
| DEBT BREAKDOWN | |||
| Total Salary Monthly (Take Home) | 1875 | ||
| Total Bills Monthly | 1850 | ||
| Total Left Over | 25 | ||
| Total Keep for Myself | 0 | ||
| Total Extra for Credit Cards | 25 | ||
| Credit Card Type | Amount Owed | Interest Rate | Minimum Payment |
| Macy’s | 15,000 | 20% | 100 |
| TD Bank | 5,000 | 15% | 50 |
| Chase (int free until end of year) | 5,000 | 13% | 25 (until EOY) |
| Bill Type | Amount | ||
| Student Loans | $800 | ||
| Phone | $100 | ||
| Medication | $100 | ||
| Car Payment | $300 | ||
| Gas | $350 | ||
**amounts are approximate-my parents paid for my car insurance to help me out, until I paid down some of these credit cards.
As you can see from the plan above, it was TIGHT for me. I can’t remember the exact salary and amounts that I had in this table, but this is pretty darn close. At the end of that year the one credit card that was interest free, ended up having an interest rate.
What I ended up doing was paying the minimum on all of my cards, but if I had any extra money left over, I’d put it towards the card that had the highest interest rate.
Then I got a REALLY good job. We got quarterly bonuses. I chose to have those bonuses go towards my credit cards. Unfortunately, while I was paying off my cards, I decided to get rid of the car I was in (I spent more time at the shop than on the road and it was a brand new car) and try and get my Volvo. I didn’t have enough money up front for the deposit, so I used two of my cards to charge 2,000 on. About two years later, I was rear ended not once, but twice in less than year. The second time, they totaled my car. Since I didn’t have GAP insurance, I had to pay the difference (what the car was worth at the time of totaling the car, and how much I owed the bank on the loan) which was $2000 (I had this money in the bank), and then I had to put a down payment on the car I’m currently in now, my Subaru WRX. So, there came the credit cards again. I also ended up opening up other credit cards in order to finance my laptop and Sony camera for my blog, and of course some furniture when we moved into our apartment.
STEP THREE: REFINANCING/CREDIT CARD BALANCE TRANSFERS/CONSOLIDATING STUDENT LOANS
This step is SUPER IMPORTANT. I consolidated my student loans at the beginning of 2018, and it was the best decision I made. I ended up finding out that one of my student loans that I had been paying the minimum balance since I graduated in 2009, barely had a dent in it. After 9 years I didn’t even pay off $5000 because of the interest rate. I WASTED SO MUCH MONEY! I decided to find out how much it would be to consolidate my loans. I was able to get a 10 year plan with a fixed interest rate, and the monthly payment was almost $200 less than what I was already paying all together. Another thing that helped me was getting special offer credit cards. I had a card that was 0% interest free and no balance transfer free for 18 months. In 2018, I transferred my remaining balance to that card and paid it off really fast because I wasn’t paying interest the entire time.
ADDED BONUS “STEP”: MLM’S
As I mentioned earlier in this post, I was sucked into two MLM’s. One was Mary Kay and the other was Beachbody. If you’ve heard of the 21 Day Fix, or PX90, that’s part of Beachbody. I personally loved Beachbody as a program, but, it wasn’t worth it as a coach. Here are the reasons why I left both of these MLM’s.
Mary Kay
I was sitting at Panera one day with my coworkers at my last job and this super nice girl came over talking to us (she was going around to every table) and handing out samples and her card. I loved her attitude so much and the sample that I received that I ended up reaching out to her. She has that typical MLM attitude and she sucked me in BIG TIME. She told me that if I bought $2,000 worth of product I’d start at a really high status and automatically be on a higher level. Somehow, I did it. It’s my own fault, I know. So, that $2,000 worth of product just sat there. I sold maybe $200 worth, and half of that was split between my mom and me. Then there was this conference in Atlantic City and I thought I should go because maybe, just maybe, I’d be inspired and learn how to sell this stuff more so that I can at least get that $2,000 worth out of my possession. That was another approximately $500. Not to mention the gas it took to get there and food. About 6 months went by and I sold NOTHING! I bought more product to stay on that higher status level. The worst part, is I opened up a Mary Kay credit card to put all of this product on. It was collecting interest. I was losing friends left and right on Facebook for being annoying. Finally, I told my team leader (the very girl that I met in Panera) that I needed to quit. I told her that I was going to sell back the product. She told me no, no, no, don’t do that we will have some of the team buy it from you. A few months went by, and nothing. That’s when I decided that I would sell it back and just not contact her again. I got maybe half of what I spent on the product back. I knew the leader was a little upset because she had texted me, but I told her that I needed to get rid of it right away. Plus, who wants to buy products like skincare and makeup that has been sitting for THAT long, who knows how long it was sitting in their warehouses before I got them.
Beachbody
A few years ago, I had gone through a little bit of a rough patch and life was spiraling out of control. I had a lot going on. This caused me to gain SO MUCH WEIGHT. I was close to 200lbs (when I actually weighed myself after I had started to lose a little weight). My doctor was concerned with my health because my bloodwork was terrible. I was scrolling through Facebook and saw one of my friends post their before and after, and they said to message them for more details. I did. I didn’t have money to sign up for the challenge pack (it was a little over $200), but I put the charge on my credit card because this was my last resort. I just couldn’t handle feeling so shitty every day and so emotionally unavailable, that I took the plunge. It was the best decision I ever made. I lost close to 50lbs. I was in the best shape of my life, my bloodwork came back amazing and I surprised my doctor. My doctor told me that whatever I was doing to continue it because everything came back perfect. After two rounds of the 21 Day Fix, the girl who was my coach was getting closer to her wedding and couldn’t coach anymore, so she had the group move over to her coach. Her coach was great! I talked to her coach and asked if I could become one. The reason why I wanted to become a coach was because I wanted to help people, the way that my coaches helped me. If it wasn’t for the challenge groups and the coaches, I would have never stayed on track. I believed in the products and the programs (except for Shakeology, I wasn’t 100% convinced with that product, BUT, it was the only way you’d make money, unless you had coaches under you)
I took the plunge. As a coach you had to keep a certain status by purchasing the products once a month, and ding ding ding, Shakeology was just over that status by a little bit. So I was buying Shakeology every month. I had a discount as a coach but paying $130+ a month on a shake that I (towards the end) didn’t use every day AND a coaching fee, was starting to get out of control. Even staying on as a discount coach wasn’t worth it for me. The amount of time and energy that went into Beachbody was exhausting. My blog took a back seat while I was trying to “build my business.” The amount of time and energy that coaches put into this is a lot. For a majority of us to not even break even. When I left Beachbody I had about 4/5 months worth of Shakeology sitting in my kitchen that I ended up throwing away because I didn’t use it in time before it expired. I lost so much money and time with BB. I might have even hurt my growth of my blog because I was so wrapped up in BB that I didn’t realize how many people unfollowed me and how many friends I lost. Those are the very people who used to read my blog and comment. I will always stand by the beachbody programs. For example the 21DF portion control containers, and the workout programs. However, other than that, I don’t recommend it as a coach.
The problem is that MLM’s feed off of a certain type of person. The stay at home mom who wants something to “feel accomplished”, the college student who needs money for books, the career woman/man who wants a side hustle, or someone who just wants a discount. In my opinion, an MLM isn’t your own business. You are still working for someone. If you want to read more about my HONEST opinion about MLM’s just click here. I think it’s very unfair that they target these groups of people who are easily manipulated (myself included). I know it’s just business, and it’s all part of the marketing tactic, but this is how a lot of innocent people who are honestly trying to better themselves lose money. I highly recommend that if you are already in debt and if you are not a pushy and annoying person DON’T DO IT! Don’t fall into the trap. The amount of money that you will make will come nowhere close to what you deserve to make.
**Please note that all experiences and earnings with MLM’s are different, but more times than not, it’s not a get rich quick scheme, and most people lose money.
STEP FOUR: REEVALUATING YOUR BUDGET PLAN
As mentioned earlier, I ended up getting a really good job where I had bonuses and such. What ended up happening is since I was already on a roll with paying off my debt, I was able to do this all on my own without my mom’s help. She was my daily inspiration though to keep paying it off because she would always request that for her birthday, Mother’s Day, and Christmas, instead of buying gifts, that I show her a $0 statement balance. I was able to do this a few times. Anyway, once I started getting salary increases, and higher bonuses, I sat down and reevaluated my budget plan. I was able to put more towards my cards. Then, once I started getting those $0 statements, I would put the money I was paying for the previous card towards the new card. Once I put a decent dent in my debt, I ended up allowing myself a little bit here and there. I would allow myself to buy a coffee from Dunkin’, or go out to lunch with my coworkers. Every once in a while I’d buy myself a pair of shoes. This was a reward for paying off a certain amount. However, I wouldn’t use my cards, I would use the money that I physically had available in my bank account.
STEP FIVE: AFTERMATH
Finally in 2018, after 5 years from that initial sit down with my mom, I was out of debt! I do not buy anything, unless I KNOW I have money in my account for it. If I know that I won’t have enough money by the end of the month, I do not purchase it. I also look at things a little differently now. I don’t just buy things right away. I wait a day to see if I’m still wanting it the next day. If I do, then I buy it, if not, then I forget about it. If I do want to purchase something, then I make sure to wait until there is a sale, or that I have a coupon. I do not pay full price for anything anymore, unless I absolutely need it, meaning it’s a necessity (for example food for dinner), not just something I want. I tend to cook more, rather than going out to eat. I bring my lunch to work instead of going out every day. When I go food shopping I compare prices (unless I’m in a really big rush), and I also do a lot of calculating when it comes to if I buy 2 for $3, as opposed to 2 for $3.50, which one am I getting more out of when it comes to how many fluid ounces are there in each. Basically, which one is the more bang for your buck?
I feel free now. The day that I paid off that last credit card, I felt that I had broken those chains. I still have debt because of my student loans and my car, but it’s not credit card debt. It’s not debt that has been lingering since I was in college. It’s not because I was young and dumb and paid for some asshole, and then it snowballed out of control. I was able to start a savings account again. Some of that went towards our big move, but it was nice to have that extra cushion there, knowing that I didn’t have to tap into my regular account and that I had extra money. Knowing that I didn’t have to use my credit card, and rack up that debt again. I have a little allowance for myself. I have an amount that I designate to either add to my savings, or buy a treat for myself, whether it be a pair of shoes (on sale of course) or a slice of pizza.
With all of that being said, I’m not an expert, but if you ever have any questions, just leave it in the comments or contact me directly via email. Or if you just want to talk about being overwhelmed about it, let me know, I’m here for you!
xoxo Monica
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