Today we welcome Jen Smith from Saving with Spunk as she shares her story about overcoming debt and financial shame. Thank you, Jen, for sharing your story and tips!
Debt and shame are almost synonymous. If there’s financial distress in a family, no one talks about it. We do our best to sweep it under a rug so on the outside it looks like everything’s fine, while on the inside we’re floundering.
I always looked at “wealthy” people and wished I could be like them. I thought that getting out of debt and making lots of money would do it but I found it’s impossible with the shame and grief I carried regarding my finances. The difference between people who stay financial “hot messes” and those who get out of it comes down to a healthy mindset.
There are things wealthy people do and think that set them up to build wealth. Often we stay paralyzed in our unhealthy mindset because we think we deserve the oppression of our finances because we created them. Forgiving yourself on a few key things can start the process of a building a new financial life.
Taking on Debt
When I got out of college I felt so dumb for taking out loans. Now when I look back on it, I wouldn’t change a thing. I have a job I love, treasured friendships, even my husband as a result of the path related to those student loans.
Want to dodge student loans? Apply for grants and scholarships.
Maybe your story isn’t as smooth. Maybe overspending led you into debt and you’re suffering greatly for it now. Look at the big picture and see what you’re meant to learn from it. If I hadn’t gone into debt I would’ve never discovered my passion for writing. Someone who will be in your place needs your story. Forgive yourself so you can give it a happy ending.
Not Acting Sooner
You can’t go back in time and make bigger or more payments. I thought I was destined to live with these loans forever. So much so that I financed a car because I thought “I’m already $50K in, what’s $10K more!?”
Know that you have started this journey at exactly the right time. The only difference you can make now is how fully (and quickly) you commit yourself to financial freedom going forward.
Budget Fails
Sometimes there are legitimate setbacks. Something comes up you didn’t budget for and everything gets thrown off. My husband totaled his car 2 days after I paid mine off. We had to save up to buy a new one because we refused to have a car payment again. Making that minimum payment on my loans after making so much recent progress killed me. But it was short lived and we were back at it in no time.
And sometimes you just fail. Nobody’s perfect. But don’t let the little voice inside your head say “You’ll never be able to stick to a budget.” or “You already blew it in one category, might as well throw it out and try again next month.” Forgive yourself and keep leaning in. The budget only works when you work it consistently.
“Selfish” Spending
Women, especially mothers, want to pour ourselves out whether it’s for a spouse, kids, or your friend from high school who’s somehow always in a crisis. I’ve found that you need to take care of you first in order to help others most effectively. Purchases related to self-care should never be considered selfish.
This obviously doesn’t mean weekly manis and pedis while you’re paying off debt. But if you need to see a doctor or therapist, go to a work conference, or maybe have the opportunity to participate in something fun you’ve always wanted to do, do it. Budget and save for it now so you don’t feel guilty while you’re doing it.
Financial Illiteracy
Familial habits are cyclical. We see it in all areas of life but especially in things as private as money. My parents never taught me about money because they didn’t know a lot either! But understanding that isn’t a pass to continue in money mediocrity, it’s a door to get out of the cycle.
If you’re like me and didn’t have wealthy, financially literate parents, then my advice is to constantly learn about and grow your money. Read stories and articles, calculate and compare the interest on your debt and what you could be investing, and actually put the stuff into practice. At first it’ll be overwhelming and you’ll make a few mistakes, but you’ll inevitably start a new cycle.
Freeing yourself from these emotional burdens will give you the freedom to get out of debt, save for the future, or whatever your financial goals may be.
What do you think is holding you back from you best financial mindset?
