|Interview: Jean Chatzky
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What has your own life taught you about overcoming debt and what did you take away from your experience?
I graduated college, I was earning all of $11,000
a year at my first job and trying to live in New York
City at the same time. Thankfully, starting salaries
have gone up, but I was working at Working Woman Magazine
full time and making $11,000 a year. I very quickly
racked up about a half a year's salary in credit card
debt and ignored the bills for a while. I didn't pay
them and felt very guilty about them. I went through
the whole process of feeling ashamed of the fact that
I wasn't able to live on what I made. Eventually I
sat down and I figured there are two sides to this
equation of getting out of debt -- there's the earning
side and there's the spending side. When I looked
at my budget, and when I tried to barebones it as
much as possible, I really couldn't live on much less
than $11,000 a year in New York; it just wasn't possible.
I had a roommate already, and I was not going to an
expensive gym, getting manicures or eating out. It
was just subway tickets and living in New York. So,
I figured I needed to work on the earning angle of
the equation. I found a second job at night tutoring
for the SATs, and also started doing some freelancing.
It took a good year, possibly a year and a half, and
I finally dug myself out of that hole. I have been
one of those people who really pays off her credit
card every month since.
“There's the earning side and the spending side.”
What can people take away from your experience?
know, I wish it was easy to share in words the uncomfortable
feeling of having that kind of debt. I know it doesn't
sound like a huge number, but as a percentage of my
earnings at the time, it was pretty huge. I just hated
it. I hated knowing I owed people money and worrying
when the other shoe was going to drop. It kept me
up some nights. I wish I could share that. Instead,
I think what people could take away is the fact that
we really do have an underearning problem in this
country. Sometimes what's necessary to get ourselves
out of these holes that we dig ourselves into is not
just cutting out the little things, but making a bigger
change. That for me meant working more. For other
people it may mean living somewhere else, getting
rid of a car or public school vs. private school.
They need to look at how they're living and whether
they can afford it. If you can't afford it, you have
to change one side of the equation. That means you
have to earn more in a big way or you have to spend
less in a big way.