6 Things I Wish I Knew About Debt

finance stress management Jan 11, 2021

“Enjoy your 20s”, they said… “It’ll be fun”, they said… Just like you, I believed that my car insurance would miraculously come down at the age of 25 and that once I was kicked off my parents' health insurance at 26, I could take advantage of the “affordable” health insurance my big girl job had to offer. I’d have a bachelor’s degree and some corporate company would hire me immediately (because I paid $60k for this degree!), and I was going to be rich and life was going to be easy.

Well, I am here to tell you, the car insurance myth isn’t true, finding a well-paying job is hard,  and health care isn’t affordable unless someone else is paying for it. I won’t be a Debbie Downer, though! In addition to teaching myself about car insurance and health insurance, I gave myself my first introduction to the dreaded “d-word”… DEBT and I’d like to share my lessons with you.

When you turn 18, everywhere you look, debt is offered to you – in the form of student loans, credit cards, auto loans, etc. But what do we actually learn about debt before it’s offered to us? Typical public school education doesn’t teach you much. I remember taking two new electives in my senior year (2010) that my high school was offering: personal finance and entrepreneurship. Neither taught me anything I needed to know about staying afloat financially and managing debt. Below are the six things I wish I would’ve known: 


  1. Don’t be ashamed of your debt or your spending.

Money is a taboo topic in our individualistic society, and debt is stressful. Believe me, I know because I’ve been there! Unfortunately (and I learned this the hard way), simply ignoring your debt doesn’t make it go away. The longer you put off acknowledging your debt and your spending habits, the deeper the hole becomes. 

Today, technology makes tracking debts and spending super easy! Decades ago, people only used cash and they kept receipts for everything. In a world of swipers, knowing how your money is being spent can be difficult. Apps like Mint and Clarity Money make tracking these things pretty simple. Looking at how I was spending my money was far from comfortable, but it also allowed me to see where I could make changes and gain control of my financial life. 

2. Getting out of debt is only possible with a solid budget plan.

You can make a million dollars a year, but if you don’t have a plan for your money, you could remain living paycheck to paycheck. Look into different budgeting and debt management plans, and pick one that works best for your lifestyle. Money is not the solution to the problem of debt – the solution is having a plan. 

3. Cash is important – SPEND IT.

Ever heard of a plan within a plan? Within your budget plan, you should have a spending plan – how will you be managing your spending? When my family chose to take control of their finances, we operated on the cash envelope method of spending. It was a game-changer for us. Swiping a credit card is so easy, and we choose not to take note of it but money adds up, whether it’s $2 for a coffee, $20 for a shirt, or $60 to fill up the gas tank. If you decide to be an all-cash spender like I did, you won’t use plastic at all. On payday, take out a certain amount of cash that you want to allow yourself for spending. If you run out of cash, you can’t spend anymore until your next payday. People are more mindful of cash expenses, and are less likely to spend on unnecessary things. 

4.Having an emergency fund is just as important as paying off debt.

This was critical for me when paying off debt, and this step took me the longest to understand. As I was paying down credit cards, I wasn’t saving at first. When unexpected expenses came up, I was swiping my credit card because I didn’t have an emergency fund. Once I started saving a small amount towards my emergency fund from each paycheck, I wasn’t as stressed about paying off my debt and I also had enough money in case I needed new tires. 

5. Work hard, be mindful, and have self-control.

I would never suggest working yourself into the ground, but one thing that helped me in paying off debt was becoming an independent contractor and working at my convenience to make extra money to pay off debt. This was in addition to my full time job, but it allowed me to work when I wanted to so that I avoided burnout. Nowadays, there are companies like Uber, GrubHub, and AmazonFlex that allow you to work a flexible schedule.

In addition to working extra hours, I became more mindful of my spending habits and had more self-control. Using the envelope cash spending system was a good way to hold myself accountable for my cash spending, but self-control is so important with this method. If I allowed myself $100 over 2 weeks, and one week in I spent it all, it’s really easy to go back to the ATM and allow myself another $100 but it defeats the purpose. 

6. Surround yourself with people who talk about money and debt.

My grandfather once told me: “If your friends aren’t talking about money, you need new friends.” I was always so ashamed of being in debt, and I never wanted anyone to know how much money I made, how much money I had saved, or how much credit card debt I had. But with goal-setting, accountability is so important. Tell three friends about your debt management goals and ask them to hold you accountable! Better yet, ask them to join you on your debt management journey. Consider these statistics on personal debt in America (https://www.debt.org/faqs/americans-in-debt/):

  • More than 189 million Americans have credit cards (I am one of them). 
  • The average credit card holder has at least four cards. (I once maxed out 13 credit cards).
  • On average, each household with a credit card carries $8,938 in credit card debt. (My highest credit card debt amount was $19,439)!

When my family was managing their debt, we met weekly. Surrounding myself with money-positive people who were on the same journey I was and had the same goals that I did, really motivated me. 


If you’re considering managing your debt, keep two things in mind: debt management and financial freedom require mindset and lifestyle changes. Surround yourself with people who can hold you accountable, and get familiar with budget and money management methods so that you can choose what works best for you. Debt management and financial freedom are possible – but only with accountability, mindfulness, and a solid plan!