[-$67,520] Making Hay While the Sun Shines

Why do I make such large payments on my student loan debt? Because, for now at least, I can.

In the past month, I’ve dodged a bullet that would have raised my rent by over 50% (losing a new roommate because of discord in the house). So far the climate in the house is improving. I’m really hoping it continues.

I’ve always known, and written here, about how my cheap (for this area) rent will not last. At some point in the future, LL (landlord) will stop… landlording and we’ll all have to leave. When that happens, my rent will go up significantly as soon as I move anywhere else. So I must pay as much as I can now  toward this debt, while I have this cash flow. In other words, I have to make hay while the sun shines.  Read More

The Moment When Debt Causes You to Lower Your Expectations in Life

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I started this blog back in late 2012 after realizing that I wasn’t going to pay off my debt as easily as I’d assumed I would after I’d graduated from school. In the days following getting fired from my job back in 2013, my precarious financial situation became even more real to me. I spent a lot of time thinking about my past, present, and future whenever not applying for jobs. ‘Is there a way out of this?’, I’d ask. ‘Will I ever be able to live a “normal” life’ (i.e. my own house, car, nice things)? With a calculator and a notepad, I sat on the old squeaky twin bed that came with the room that I was renting at the time and started doing the math….

After a period of time running calculations, I accepted the unavoidable truth. I’d likely never be able to afford to pay off all of this debt, own a home and car, travel, afford nice clothes, and save enough for a comfortable retirement. I didn’t make enough money (still don’t), and there weren’t enough working years left. In 10 years, I’ll be in my 50’s and subject to ageism and involuntary retirement. I likely won’t have a spouse or anyone else to rely on in my old age. I’m always hopeful, of course, but also a realist. The odds are against me at this point in life. So that was it…  And the illusion crumbled…

I sat there and let it sink in. The rest of my life won’t be like I’d always envisioned it being. The future self, the ‘successful me’, that I’d had in my head all these years would never exist. It was sad to think about. It’s still sad to think about. It was almost like a mourning. I felt like a failure. I still feel like a failure.

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As I sat there, the cognitive dissonance started to subside as the rational part of my brain took over again. If there wasn’t going to be enough money to go around, then I had to prioritize and make choices. First, the debt has to be repaid. The consequences for not doing so would be too severe. Seventy-five percent of my 140k+ debt is student loan debt, so bankruptcy was not an option.

Next, I knew that retirement funds would be necessary to support me in my old age. With no retirement savings in my late 30s, I knew that I would have to sacrifice as much money as I could to put into a retirement account when (if) I got my next job. Lastly, I would have to live my life on very little money between then and retirement, only to continue living frugally in old age. That’s not even accounting for needing to take care of my parents in their final years. Frankly, I’m planning that my siblings will be willing to fund most of our parent’s care-taking as they are much more financially well-off than I am. (Hell, who isn’t?)

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No house, no nice things, no travel. I’d need to continue living under other people’s roofs, in rented rooms, sleeping on other people’s old squeaky twin beds; at least for the foreseeable future. As someone who cherishes personal space and privacy, this was a bitter pill to swallow. (Side note: Although I’ve moved twice since that day in 2013, I’m currently writing this post on a squeaky twin bed in a rented room). As living with roommates is a constant source of low level stress for me, I realize I am sacrificing a bit of my health because of this.

Around that same time last year when I had my calculator reckoning, I discovered minimalism and simplicity. It was a buoy for me in that it helped me to cope with my situation. It helped me to see that I don’t need ‘nice things’ to be happy. I don’t need to own a home or car. I won’t lie and say that those things wouldn’t be nice to have. I’ve just come to accept that they may not be for me.

Today, I don’t know how my journey on this rock will end. (Would I even want to know?) However, I’m coping with lowered adjusted life expectations, the best way that I know how. I don’t look, dress, or live like other women my age, because of my financial situation. The sour truth is that sometimes I’m treated differently by others because of those differences. Being and looking poor has its disadvantages. I’m planning to re-start work on a couple of side projects that may become a source of side income. I need to find a way to make more money without sacrificing my health. I will do what I can to improve my situation, and to focus on the silver lining to my cloud.

How has debt affected you?  What have you done about it?

“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

How to Cope with Debt

Coping with debt is a skill.

For those of us with crushing long-term debt that it will take us years to pay off, coping with debt is a skill that could save our lives. While we are working our multiple jobs and side hustles,  making more money and cutting expenses, we need to realize that dealing with debt is more than a numbers game.

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1. Breathe, Stretch, & Take a Walk

I know it sounds trite, but do it. Really. The stress of debt can be deadly. It has been linked to depression, chronic hypertension, migraines, digestive problems, heart and autoimmune diseases.  Get outside and get some sun. Deep breathing clears the lungs and lowers blood pressure. Stretching and moving increases healthy blood circulation. Taking a brisk walk strengthens the heart and exercises tense muscles. We all know how exposure to sunlight is very good for mood and natural vitamin D production.

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2. Start and Maintain a Debt Diary

When behind the bars of debtor’s prison, write. Write to save your sanity and your health.

Get a good old fashioned paper diary, regular notebook, Word/Google doc, or even a blog – whatever works for you. This diary / journal / logbook is where  you can vent about all the slights, put-downs, and insultiments you endure on a regular basis. Everytime you have your intelligence insulted on your job, write about it. Everytime you endure a desperation filled and humiliating job interview, write about it. Everytime you get snubbed by family, friends, or strangers, write about it.

Just told someone off because you couldn’t take it anymore – record it here for history. Found out that your  cousin who barely graduated high school/college married a doctor and is now on holiday with him in Europe?  Grind your teeth while you look for your bus pass.  The only place you can afford to go is to work! What about your classmate whose parents helped him start a business and who now works for himself.  Grind your teeth, and buy a dental guard from the store to avoid a nasty dentist bill, while on your way to your second job.

Write about these encounters, feel them, and get them out of your mind and down on paper – every detail. Don’t keep things bottled up. It leads to illness. Write about what happened, who said what, who did what, how the incident ended, and how it made you feel. Vow that once out of debt that this will not happen again. Then think about concrete actions that you can take to prevent it from happening again.

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3. Sit Back for Cinema Therapy

Cinema therapy gives us a chance to make sense of our own financial situation by seeing it reflected in the lives of others. For some, distance provides perspective. There a few different forms of cinema therapy.

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4. Catch the Reading Rainbow

Whether nonfiction books, fiction novels, or blogs, read things that educate, entertain, or edutain you about personal finance, minimalism, frugality, and lifestyle design. Don’t overlook the fiction genre. One entertaining fiction book about sudden unemployment that I enjoyed recently was Bitter is the New Black. Check it out from your local library. You do patronize your FREE local library, right?

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5.  Join a Personal Finance/ Debt Therapy Group

Don’t want to bother your friends and family with another diatribe or cry session? Has your debt diary started yelling back at you to stop harassing it? You may be the perfect candidate for group therapy. There are online and face-to-face groups available for the joining. Dave Ramsey’s Total Money Makeover Forums, Early Retirement Extreme Forums, local meetup groups, and countless others can give you the support you need to vent and strategize ways out of debt. Drag those scary financial skeletons out of the closet. No local face-to-face groups in your area? Start one on Meetup.com.

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6. Reduce or eliminate the junk

Didn’t think I’d let you off the hook that easily, did you? We all know the drill. Cut out, or at least cut down, the sugar, alcohol, and fried foods. Don’t self-medicate with drugs, or alcohol. We all know that it will cause more and worse problems down the line.

There you have it. These are a handful of ways to begin coping with long-term large debt, while we actively work to claw ourselves out of it as fast as we can. I’m working on these myself. It’s not easy.

What are some ways that you cope with your large debt?

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)