my debt
How I got into debt … and out of it
In May 2006, I graduated college owing over $20k in student loans and credit card debt. I had absolutely nothing saved, and I was living with my parents. I was 23 years old, and it was downright depressing.
What did I spend my money on? Well $14k of my debt was my student loans, and I had maxed out my credit cards on stupid things like clothes, concert tickets, trips, etc. I was stressed out all the time, because I literally had no money to my name. I could barely make my minimum payments on my bills.
For the first few months after college, I was just getting by, making minimum wage working part-time at a drug store. As my classmates were starting to land their first jobs, I was receiving statements from collection agencies. It got to a point where I honestly couldn’t even afford to take the bus, and it was so humiliating having to ask my boyfriend at the time to lend me the money. He couldn’t believe I didn’t have anything to my name in cash, or in credit. He was nice about it and lent me the money, but I know what he was thinking, and I felt awful. That’s when I knew I had to change. I want to become financially independent so I don’t have to live my life relying on someone else to bail me out.
I needed a life change, and as scary as it sounded, I decided not to hide from my debt any longer. It was horrifying having to actually open up the bank statements that I’d usually just ignore (and throw away), and after carefully calculating how much I owed, I was in shock. I had no idea I owed so much, and I knew my first course of action was to make a budget and stick to it.
I had decided to move home in 2004 because I couldn’t afford to keep my apartment, pay all the minimum balances on my cards, and go to school at the same time. It was a great decision, because instead of spending $650/month in rent plus utilities, I was only being charged $150 including utilities. Then there was my lack of a budget. I was regularly spending $100+/week in groceries for myself alone, and I was going out and partying with my friends every weekend. That had to stop. And let me tell you, it was really hard. My friends weren’t as supportive as I had hoped they would be … but I kept on with my new lifestyle. I became a coupon clipper, and only bought what was on sale. I also quit partying and found alternative ways to have fun for free.
My next course of action was to get a full-time job.
In June 2006, I landed an entry level job with a government agency. It wasn’t what I was trained to do, but it was a job. My take-home pay was about $2100/month, so I decided to earmark $1,000 of that income towards debt repayment. I opened up an RRSP, and started putting money into an Emergency Fund. I also started to save for a condo down payment. Each of those accounts got $50/month. It wasn’t a lot, but it was a start.
By October, I had eliminated my credit card debt and vowed never EVER to keep a balance on my cards again. There’s nothing worse than those outrageous interest rates they charge!
So it was onto my student loans next. All $14k of it. That much money was intimidating as hell, and I knew I needed to adjust my priorities. So, I sold my car and bought a scooter. It was a little drastic, but drastic times called for drastic measures. Not only did my insurance drop from $80/month down to $15, but I only paid $5 to fill up my scooter every week. It was a great decision, and yes I missed my car (and it sucked having to ride in the pouring rain), but I knew it would be worth it in the end. I saw the BF with $450 car payments every month, and I was so glad I didn’t have anything like that to deal with. I also implemented a very strict budget on myself. But that still wasn’t enough. I needed to do something more extreme – so I started applying for a new job.
Miraculously, in mid-November, I landed a great opportunity in my line of work with another organization. It was a one-year maternity leave position, and although it wasn’t a permanent thing, it would give me the mid-level experience I needed within government. I also started a part-time job, and was able to step up my debt reduction to $2,000/month!
It was around this time that I really started counting my pennies. I literally threw every last cent I had at my debt. I kept within a $30/month dining out budget, and never let my groceries creep above $25/week for my share (I lived with my BF at the time, and we split the groceries evenly). I also learned little tips and tidbits on how to save money on the little things. I got a ton of heat from people about being too “extreme” about my budget and not having a life because they thought I was afraid to spend money … I guess everyone has their own way of dealing with debt, but the way I saw it was: I got myself into debt, so I didn’t deserve the niceties I was so used to spending on myself until I got myself out of debt. It seemed fair to me, anyway.
Throughout this process, I started reading personal finance (PF) blogs and articles online. I found it hard to relate to my friends in real life because they didn’t seem concerned with personal finance or paying back their debts. They just didn’t understand why I was so stuck on saving money, and often made fun of me for it. I was the “penny pincher” of the group, even though I didn’t feel deprived of anything at all. So, needless to say, it was inspiring and uplifting to know there were other people like me out there who wanted to change their lives.
The PF blogosphere was so welcoming and inviting, and I felt so inspired through the actions of others that I decided to start my own little PF blog. It really helped me become accountable for my actions, and I quickly made online friends who were so encouraging and supportive. To this day, I still think creating my blog was one of the best decisions I’ve ever made.
On May 11th, 2007 I became debt free. What a wonderful feeling! I still can’t believe it. Now, when I get my pay cheques, I don’t owe money to anyone but myself, and it feels great! Not only did I eliminate my debt, but I have established a pathway to my future, and I know that my dream of financial independence is going to become a reality.
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Just found your blog today. I am loving it so far. I am part of the personal finance blogosphere also, but not from a personal standpoint. My blog is more what I have learned from personal finance books and my journey into voluntary simplicity. My blog is new, and like you, I am not telling any of the people in my real life. It feels good to have something all my own.
My recent post My Initial Stages of Voluntary Simplicity
Hi, I just wanted to say thank you for creating such an informative and inspiring blog. Blogs like this one have been instrumental in keeping me motivated to clear my debt and creating a healthy financial future. I'm even starting my own blog finally to help me keep on track. I look forward to reading more of your posts in future.
Tracey
My recent post Introductions
Hey! I just stumbled on to you blog a couple of days ago. I've got to say I like what I've read. I certainly be coming back for updates. I'm also running a PF blog, from Canada. It is only it the starting stages and I'm working on get it to look good. Hopefully I'll be able to right a nice articel about my escape from debt.
I look forward to reading your posts. Take Care
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I'm not from Canada, but I'm also a just-started PF blogger. Your story gives me hope! I'm hoping to be debt-free in 4 years. Best of luck to you!
My recent post Some stupid and not-so-stupid things I do to save money
Hi, I've been a lurker here on your blog. I'd check in and read the entries every now and then because I really enjoy them. This is the first time I explored your entire blog and just got through reading this page, and wow. I'm so amazed and inspired! I'm in the same boat that you were, debt, loans and very little to spend. It's good to know that there's hope for me. :)
Anyway, GOOD JOB on what you've accomplished.
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Great post. This is very inspiring and good luck the rest of the way!
Just stumbled onto your blog yesterday after reading your ariticle online at the Toronto Star. I love it! I'm currenlty alot of debt (more that what you started with) but your blog gives me hope. I've been reading it for 2 days straight. I've picked up some pointers and am hoping that I too, can be debt free sooner rather than later.. Just one question though, how did you manage to find a place that only charges $150 a month for rent? I'm assuming that rent is much higher in Vancouver than it is in Toronto and even in Toronto, it's hard to find anything for less than $500.
I can't really comment on my living situation, as it involve's BF's finances too and he doesn't like me talking about his stuff on this blog. But I am in an extremely unique and fortunate position to only be paying $150/month rent. Won't last forever though! That is compared to the $725/month I was paying before I moved in with him. The cheapest 1-bed place that I had in Vancouver was $600 and that was literally 50 metres from the border of Vancouver and Burnaby, so not exactly city centre.
@ Jen
I think she mentioned that she moved home with her parents who only charged her $150/month including utilities. Toronto has a very high cost of living when it comes to rental properties and real estate.
Yes, while I was getting out of debt, I lived at home with my parents for $150/month. Currently in Vancouver, that is how much I pay as well but for different reasons. :)
hi im wayne your absolutely right about the cost of living in Canada is amaze&ly expensive are you from there?
Nice job on your debt reduction efforts. I find most people just don’t get the penny pinching ways. These are the same people who live paycheck to paycheck and buy what they want when they want even when they can’t afford it. There are so many easy ways to save money but I find that most just aren’t willing to make the sacrifices. My wife is one of these individuals. Every time she says lets buy this or that, I have to ask the question do we really need it. 9 times out of 10 we don’t.
Who gives a shit about getting heat? Most people are clueless about money or the grand scheme of things. Your experience will most likely have a lasting impact on your life in a very positive way. Hopefully you will be able to move out and be independent from your parents as well. Good luck.
I actually haven't lived with my parents in about 3 years. I lived by myself for 2 years, and have been living with my boyfriend for the past year. :)
Great insight into your situation, as it likely compares to many of us at various degrees, so easy to get into debt and its a heck of a game getting out.
Gerat post! Really, debt is a dangerous game. Constant bills, payments on loans can hurt the budget a lot. Besides, it’s really difficult to handle all these expenses. However, it’s really possible with low interest debt consolidation loan that is considered to be a good way of debt reduction. Some people can succeed at it. The rest of us can’t. For me, getting out of debt has been like shedding a load of boulders from my back. Living without debt is wonderfully light, and I’m not giving that up. Sure, I’ll have to wait a little longer to get the things I want on cash … but that’s worth the wait. It really is.
It was neat to find this blog, your story reminds me of myself a bit! I actually dropped out of school and am currently between educational opportunities (hey, at 21, I'm still young…) and I've decided that in the mean time becoming debt-free is my main priority. I live with my parents rent-free but am actually moving out in a few weeks. Part of the reason I allowed myself to do this was that I've been consistently contributing over 50% of my income from my full time job and part time freelance stuff to debt reduction, and I've been pounding at it! I'm almost half done already. ^_^ Your blog gives me hope that I'll easily be able to finish with it! I'm also experiencing the whole thing with friends poking fun of my frugality, but another thing I've noticed is that a lot more young people these days are taking it up! It's kind of refreshing to see people become more knowledgeable about their finances!
I'll be reading your blog now and then and taking in any advice I can. Thanks for posting it out there!
You think $450/month is bad for car payments? Man its gonna take you a while to get back up. Life ain't always pretty.
that sucks for you. haha
dept.dept.dept.dept.dept.dept.dept. i am 50000 dollars in dept. im so scared. i dont know what to do. help me!
Helps to be able to spell DEBT first…
Krystal,
This is AWESOME!!! I had no idea you had this site – it's phenomenal. And inspiring – God knows we would all love to be out of debt…..I'm trying and it's hard.
I've read about your trips on facebook and wondered 'how in the hell can she afford to do all this travelling.' Well now I know:))))
Seriously congratulations on all of this:) It's very cool.
Thanks Violet. :) Yeah I've kind of kept this blog a bit of a secret and separate from my "real" life. But… not anymore!
I owe about $22,000 with student debt and my credit card and reading this definitely gives me hope!! I'm living at home with my parents right now rent free so I can try and make a dent in my debt.. it's slow going right now but I have hope it will pick up and I'll be debt free soon :) I've made a budget for myself, lowered my phone bill and try to cut out unnecessary things entirely.. it sucks sometimes but it will be worth it in the end!
I have also suffered from debt issues and on that time I have searched a lot of websites to payoff my debt and reduce my debt burden. Because debt will you like stressful and you will not be able to enjoy the moments of your life. Finally, after planning a budget and savings I have cleared my debt , it takes 3 years but now I am debt free. I hope this article will be very helpful for those also who are still struggling with their debt and looking to pay off … :)
I came here from the toronto star's article about groceries for less than $100/month I am currently a student who is trying to budget budget budget and your blog just inspired me to really stick to it!
I'll definitely be checking back every so often.
chomu blog
you should give credit to your parents – it's sort of lame that they charged you 150/mth but that's what really saved your a*% initially and allowed you to become the wise and thrifty lady you are
I think it's rare that any parents would charge their children full rent while they are living at home and going to school full-time…
of course, I'm saying they coulda/shoulda let you live rent free – my point is that the return home isn't highlighted or discussed at all – one sentence. not an option for everyone who digs themselves into a hole
Thank you! Your debt-payoff story has inspired big changes in my life. Over the last eight months I've paid off over $12,000 in credit card debt. Yours was the first story that I could easily related to and many times it kept my drive to pay off my debt going when I felt like quitting. Like you, I used to just buy the things I felt I needed without really thinking about it (clothing, vacations, dining out) and I never considered the future trade-offs I would have to make in order to pay it back. I had tricked myself into thinking that debt was just a part of life, but I know today that isn't the case. While I'm very fortunate that I didn't have to do anything really drastic, like give up my home or sell my car, in order to pay off my debt, I did make significant changes to the way I view and spend money. I now know the difference between needs and wants and have figured out how to maintain a lifestyle that I'm happy with while sticking to a budget that works for my family. I'm proud to say that I no longer have consumer debt. I feel as if a huge weight has been lifted and I'm richer for it in so many ways.
Wow, $12,000 in 8 months? That's an incredible accomplishment! Looks like you were able to make huge, positive changes in your life, and even thought I don't know you, I'm really, truly happy for you. :)
I am nearing 30 with about 15,000 credit card debt in my name. My job pays me well, but the more I earn, the more I save. And it took me 6 years after graduation to realise that the key is not how much we earn, but to live within our means! I have been struggling with debt for the past 2 years (it’s not shopping that I spent on – I lost a lot of money from a failed investment), and it’s truly inspiring to read your blog, and how you overcame debt. Reading the comments from the community you built also motivated me and encouraged me that OVERCOMING DEBT IS NOT IMPOSSIBLE.
I have just started a blog five days ago, and you have inspired me to start my own blog to document my journey in overcoming debt. There are a lot of pages that are not uploaded yet, as I want to be completely honest to the readers and I want to reveal my debts, my income, my spending etc to the cent. And hopefully by the time I turn 30 (that’s 8 months, 8 days from now), I would have overcome my debt and be on my way to saving up on a HDB flat (HDB flat means public housing in Singapore – it’s actually more expensive than a private condo!).
I welcome you to visit my blog – http://www.iwantmyhdbflat.wordpress.com, and twitter @iwantmyhdbflat. Thanks Krystal!! I hope to live up to what you have achieved! xoxo
First line – I mean the more I earn, the more I SPEND. Ooooooops!
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First read on yer blog, very good to read about the debts & how dedicated and courageous you were, to stand up to your problems & do something very real about them. You’re a way more responsible person than any of the young folks I know in that regard.
This is so inspiring! I hope that some day I can get to where you are!
I just came across your blog today via The Toronto Star and I wanted to thank you for being so honest in sharing your initial struggles with achieving financial independence. I am a recent university graduate and although I had saved up about $11,000 out of my $25,000 student debt, I still feel like I’ll never be able to pay it off. It’s difficult when employers don’t give new graduates the opportunity to prove themselves, due to lack of experience; I mean you’ll never gain experience, if you don’t start somewhere. But honestly, I really don’t feel that alone in my financial struggles after reading your blog. Thank you!
That’s how I felt too when I started reading personal finance blogs. I couldn’t talk to my friends in real life about my money problems, and being able to relate to bloggers, I felt like someone was there with me. Like I wasn’t alone, and other people knew exactly what I was going through. Such a comforting feeling.
It’s a tough journey being a recent graduate, but if you want it, and you’re willing to work hard, you can definitely make a name for yourself – and get out of debt at the same time. :)
Hi, just saw your blog today! Very inspirational. I currently have $38,000 in student debt about about $3000 in credit card debts. And I am trying to pay it down asap!
Glad to know that there are others out there with similar stories!
I know more or less where I need help with, one word: “budgeting”!
Hello
I just found your blog and it is so inspiring. I am sorry to hear your friends were not as supporting. But you were strong and patient and made it through anyway! :-)
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Hi Krystal,
I started reading your blog ages ago, but I still come back to it often when I start getting discouraged on my journey out of debt.
Since graduating from school in May, I’ve paid off the $3,000 I had owing on a credit card and put away $6,500 in savings. While I’m earning a salary, it’s small, and I still have student expenses like tuition and professional and licensing fees (which have added up to $4,000 so far this year). I am looking forward to getting out of this hole, and your blog remains an inspiration. Thanks!
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Just want to say that its great that you paid off your debt, buttttttttttt. Not realistic for all people, I could not move home as my parents have both passed away. The kind of debt you incurred was 20 year old debt, wait until life brings you a mortgage and children. Its great to rely on others for help, maybe try it on your own and you will earn more respect.
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No, my situation isn’t realistic for all people. But it is realistic for some. And moving home isn’t the only way I got out of debt. I cut back expenses, worked 2 full-time jobs at the same time, and went after opportunities.
Also, my goal with this blog is to tell my story of how I got out of debt and completely changed my life. And honestly, anyone who can get themselves out of debt deserves all the respect in the world – no matter how they did it. Oh, and I do have a mortgage.
Hi Krystal, I just wanted to say that I greatly admire that you were smart enough to get your finances under control while you were young! I am a 39 year old single mom and I know how difficult it is to live under the burden of debt, but I have nobody to blame but myself. Schools should teach such things, but it is also important that kids learn from example from their parents. Living within your means is doable!!
What a cool blog! A link at Toronto Star website brought me here. it’s amazing what you did to eliminate your debt. my boyfriend’s head is about to explode cuz he has so much debt and he doesnt have his head in the right place to start getting rid of his debt. I would definitely mention you as a positive example. You were very courageous. Takes great courage to do what you did even though people weren’t very supportive to you. They will be the ones with debt in the end of the day. by the way, I am a blogger too but I was wondering how you were able to get your blog out there in the world and gain so many readers? have a great time in Europe!!! and keep this blog up. great job! definitely a great idea.
Thank you so much for your comments. Hopefully your boyfriend will come around and want to get rid of his debt sooner, rather than later.
To answer your question about getting my blog out there… well most blogs fade away after a year or so. It’s tough to find people out there that write consistently over a long period of time. This blog will turn 5 years old in just a few weeks. My big break was when an editor of the Toronto Star found my blog. He liked that I had been writing for so long (which showed dedication). So he took a chance and offered me a job. That’s when my readership blew up. Just keep going at it. Comment on other blogs, engage people on Twitter, and start networking. If you work hard, your readership will keep on growing!
Stumbled upon your blog by accident (and because the domain name is fun) and I’m impressed at your approach to become debt free. While I’m lucky enough that I don’t need credit for my daily expenses I wonder if I’d be able to do what you did.
Specially right after I left uni… Now I am a bit better :)
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