How I finally paid off my credit card debt

I've been a debtor all my life.

My parents first met at a financial loan office — my dad issued loans, my mom worked in the office. They divorced when I was 10 and my mother was left to raise two daughters in Cincinnati, Ohio on a $20,000 a year salary. Money — or the fact that we didn't have any — was a constant topic of conversation. My mother turned to credit cards to feed, clothe and house her daughters.

So when I was a 19-year-old freshman at Ohio University, I didn't see the danger of debt. When a credit card company arrived on campus to sign students up for cards, I grabbed a clipboard, filled out the paperwork and got my first card on the spot. My only income was a campus job that paid minimum wage — $3.85 an hour in 1992. I also had student loans since I was paying my way through college. But I didn't see the potential trouble of having a credit card of my own. To me, credit meant power.

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In my skewed, adolescent logic I decided I would pay for food with cash and everything else with my credit card. I lived in a student dorm and so bought things like a crock-pot with my card, inching closer to my initial $10,000 limit.

By the time I graduated in 1995, with a degree in social work, I had $15,000 in credit card debt and owed $52,000 in student loans. As the first person in my family to graduate from college, I was proud of my accomplishment. I moved to New York City to start my life. That first year, I earned $21,000 working three jobs, one at Old Navy. The credit card company bumped up my limit to $20,000.

Living my 20s in the red

The debt didn't worry me. At 22, I decided would be just like my mother and live my life in the red. Looking back on it now, I realize I was rationalizing self-destructive behavior. I was blaming the universe for my own decisions. But I also have compassion for that younger me. I had never had a good, financial role model — I didn't know another life.

In 1996, I started graduate school at Hunter College in Manhattan, taking out $13,000 in student loans to pay for a Master's in social work. My 20s became a blur of debt. I was working two or three jobs at a time just to pay my credit card bills. I was juggling multiple credit cards, moving debt whenever I would get a zero percent interest teaser offer. By my late 20s, I owed $50,000 in student loans and $25,000 in credit card debt.

Signing a contract with myself

By 2000, debt was no longer the empowering liberator I had once imagined it to be. Instead, it had become my prison. And my job in social work had shown me that I didn't want a long-term sentence.

All day long I worked with homebound elderly patients; I saw what it was like to be old and poor, and I didn't want that future for myself.

So, one day, at age 29, I took out a piece of paper and wrote a promise to myself: By my 32nd birthday, I would have a job that would earn $50,000 a year so I could begin to crawl out from under the weight of all my debt. I would not just work to live, but find work that was rewarding, both financially and personally. Writing that pledge made it real. Accidentally, I had a signed a contract with myself and I didn't want to break it.

At the time, I was making $37,000 a year working in direct social services. It was difficult work that didn't pay well, and it was emotionally taxing. I began looking for a new job. That's when I landed my first job in New York City government, making $41,000 a year. Within nine months, I got a $6,000 raise. And, a few months later — by the time I turned 32 — I got assigned onto a new project with a salary of $51,000 a year.

I was determined to pay the debt down. I took out a $10,000 personal loan through Bank of America with a locked in interest rate of 0.9 percent. I consolidated my high interest credit cards into that loan and paid it off in three years.

That loan was a turning point. I acknowledged that debt was money that had been leant to me and it needed to be repaid. I not only owned the debt, but surrendered to it, too. At the end of the loan, my total debt, including student loans, fell to $55,000.

By 2006, my financial life was improving. I was making $60,000 a year when I decided to take a job in Washington, D.C. working on national health policy. Two years later, I returned to New York with national credentials, which meant an improved earning power. At my new job, I earned about $70,000 a year. One day soon, I would pay off my debt for good.

The slip that set me back

And then life took a turn for the worse. At work one day in 2012, I slipped on a marble floor, injuring my hip. The injury affected my gait, making it difficult to stand, sit, or walk. Because the injury happened at work, I went on Worker's Compensation, so all medical expenses relating to the injury were paid through the program.

But my out-of-pocket medical expenses were huge. In one year, I spent $2,000 for chiropractor co-pays and deductibles; $1,000 for acupuncture; and $4,000 for physical therapy. It was tough to find doctors who would care for me on Worker's Comp, so I was forced to pay out of pocket. And there were unforeseen (and uncovered) costs, too, like the additional taxicab rides I took because I could no longer stand on the subway or walk long distances.

My mother's troubles had also grown. Over the previous two years, she had a stroke and her third husband left her for another woman. She was $300,000 in debt and facing foreclosure on her home. I found myself flying back and forth to visit her in South Carolina, putting airline tickets on my credit card. I sent her what money I could and helped her to refinance her mortgage, although it is unlikely she can make the new payments and may still lose her home.

I watched my credit card bills creep back up, despite my $85,000 a year salary. And then, finally, I received a court settlement for my injury. I took the $51,000 and immediately paid off all of my credit cards — a total of $24,000. I sent my mother $5,000 to help her with her bills. I put $10,000 in a 0.9 percent interest savings account, the highest I could find. Another $5,000 went to a new Roth IRA. I put $500 into a new credit union account. Finally, I bought tickets to San Diego for a vacation with my mom. I expect the entire holiday to cost $3,000.

How I finally got debt-free at 40

At the age of 40, I am free of credit cards. I still owe $37,000 in student loans, but those $212 monthly payments are locked at 4.5 percent interest with a graduated repayment plan. I now make $80,000 in a new job where I work from home, meaning I spend less money on transportation, lunches out, and work clothes. My partner of over ten years is the superintendent of our building, which means our rent is included in his salary.

Rather than paying a credit card bill every month, I am now putting $1,600 a month into a rainy day fund. I recently began doubling my student loan payments, paying $420 a month toward the total. I hope to finish paying it off in less than 10 years. I've become much more frugal — my apartment is furnished with furniture that neighbors have left on the street for pick up. I love the found furniture for what it didn't cost me — in money, stress, and anxiety.

I'm just now beginning to find out what kind of person I am without the burden of debt. My career, working on implementing the Affordable Care Act, is just beginning to take off, and I'm excited to see where it will take me. But mostly, I find it easier to breathe. Now, when I look at my paychecks and bills, I know how it will all get paid. Finally, I can plan for my future and not just pay for my past.

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