Hey, debt happens!
I’m Tahnya, and I have a personal confession to make, I used to be in debt. Actually to say that I was in debt would be an understatement, I was over $50,000 in debt and I was only 27 years old.
Why I didn’t talk about my debt
I didn’t talk about my debt with my family because I was ashamed of how out of control I let it become, and I couldn’t talk about my financial struggles with my co-workers because I worked in banking.
Yes that’s right, every day as a certified financial planner I would tell clients how to invest wisely, live on a budget and be financially responsible with their credit cards – sadly I didn’t even take my own advice.
Being in debt is not the end of the world
I am sure that you are wondering how I let my debt get so out of control. I didn’t talk about my debt problems for a long time because I was ashamed of my financial mistakes but now that I am older I realize that I shouldn’t be ashamed of my financial mishaps, I should be proud of my past.
I like telling the story of how I paid off $50,000 of debt in five years because I want to help people not make the same financial mistakes that I did. I also want people to know that debt happens…we can get out of it as long as we have a plan.
One day I hit rock bottom, I was getting credit card statements in the mail and my balances were not going down, however my credit score was.
~ Note: You can easily check your credit scores. Credit Karma offers a free credit score. ~
I decided that I no longer wanted to live in a debt black hole and made a plan to crawl my way out of it. I looked into the option of bankruptcy but honestly the whole idea just seemed too easy, I decided that I was going to get out of debt sooner rather than later and I was going to do it all by myself.
We must make changes for change to happen
I realized that my debt wouldn’t get paid off if my life stayed the same, so I started making changes in every aspect of my financial life from my income and expenses to my credit habits. I sold my car and instantly $14,000 of my debt was gone. I only purchased the car because I thought that a young banking professional should have one; I didn’t actually need it so I sold it.
I moved to a cheaper apartment and cut my cell phone bill and my cable bill down to the basics. I am sure that I could have cut them out completely but I didn’t want to feel as if I was being deprived by my debt. If my debt became too much of a burden on my lifestyle I was less likely to stick to my debt repayment plan.
I found a second job and 100% of my new income went towards debt repayment. I set up automatic payments every two weeks to all of my credit cards and slowly but surely they were all paid off.
The key to paying off debt
The key to paying off debt is to fix your monthly payments into your budget and not pay more on your credit cards each month than you can afford.
If you allocate too much of your monthly budget towards debt repayment you won’t have any money left to live and you will end up using your credit cards again. If we want to become debt free we have to stop using our credit cards and start paying them off.
Tahnya Kristina is the featured daily blogger on Dinks Finance. She enjoys helping people manage their daily finances and become debt free. You can follow her on Twitter @TahnyaKristina