I have notoriously been horrible with money. I can blame it on my family for not sitting me down and teaching me the value of this thing that seems to rule our world or for not instilling in me the importance of saving or I can blame it on my school's curriculum for not covering it in a personal finance class, but really, I'm the one who needs to live with it, at the end of the day.
Looking back, it wasn't that I didn't work or make money. I actually started working right when I was legally able toand did so through summer and school years. I also had a job right out of college and consistently received a paycheck from an employer for the past 15 years minus the six months that I was working solely on re-branding nesbits in 2013. When I think back to all that, I wonder - Where is all of this money that I made over the years? How haven't I been able to save? How could I get into so much credit card debt?
The first time I applied for a credit card was my junior year of college right before I was leaving for my study abroad in Spain. I don't even think I used that card as it was just for "security" and I believe I only actually started to charge "things" after college. I ended up accumulated a lot of debt and I didn't necessarily have a lot to show for it - sure I got some Urban Outfitters pants and Zara tops, but the majority of my expenses were for experiences like travel or meals. Although the ability to have these experiences was priceless, did I actually have the ability to do it? Don't get me wrong, I don't regret the trips I've gone on or the food I've eaten, but I do wish I understood the actual value and how charging when I don't actually have the money would create a cycle of debt through interest and late payment fees. The the day came my credit card was declined after a ridiculously cheap brunch with a friend. I then realized every time my phone rang, I would immediately cringe with a ball of anxiety in my stomach and hit decline. I was so sick of ignoring the calls from collections agencies and I knew I couldn't keep this struggle inside and needed to get over my embarrassment and ask for help.
I sat down with my friend, Jared, who was really good at numbers and also was a potential business partner for my nesbits dog cafe. He took a look at everything - what I made, what I spent, what I owed - and he said very frankly, "You either have to figure out how to cut your costs and spend less, or you have to figure out how to make more money." And there it was. It's so simple and yet, how could I not have realized sooner the reality and simplicity of basic finances. It was clear that my NYC apartment on W. 4th Street was my highest expense at the time and Jared just threw it out there: "Can you move back home, at least for a little bit?" I was flabbergasted at this suggestion: "WHAT? How could I move out? How could I leave the city?" But I knew he was right. It made sense. It was so simple, it hurt. So, I rented out my room for a few months while I recuperated a bit, moving back in with my parents in Jersey City. During this time, I also got real about my credit card debt which was probably over $10K at that point. Luckily, I had paid off my student loans by that point, but still - with interest and late fees, I felt like I was drowning and would not ever be able to come up for air. I shared my struggle with one of my family members who had no idea that I was going down this path. She made me get on the phone and try to work with each of the credit card companies, calling multiple times until I got someone on the line that would help me in the way I needed. I ended up negotiating a few of the total balances down so I could settle and close the cards. With an interest-free loan from my family member, I was able to pay off the credit card companies that I owed. I am so grateful I had the support and it was actually life-changing to not live in fear of those collections calls.
That was about six years ago. After the settlements, I wasn't able to get any sort of credit cards, but that was a good thing. I started looking at my bank accounts every day, which was something I had avoided because I was so scared at what I would, or wouldn't, see. But now, I wanted to be aware of what was going in and what was going out, and the control I had over that. One day, at Target, I decided I'd try to apply for a credit card and with my fingers crossed... I got approved... for a $300 credit line. I started jumping up and down, literally... in the Target cashier aisle. And I'm sure the people around me thought I was nuts, but I was so excited to finally be able to get started on building my credit score back. I felt aware, and finally, in control of this finance thing that always seemed to control me.
Fast forward to the present. No, I didn't figure out how to save a million dollars or even a thousand. I did build my credit score up to over 750, which I am proud of, but I am still living paycheck to paycheck for the most part. The very blunt and simple guidance that Jared gave me nearly a decade ago is something I constantly need to remind myself. At the WDS conference earlier this month, I was introduced to Mr. Money Mustache, a Canadian who moved to the US in his 20's and "retired" by the time he was 30. I loved his presentation so much because it reminded me of what Jared had said, that somehow I had forgotten.. He, along with J.D. Roth, stated "The shockingly simple math of financial freedom is income - expenses = savings (profit)." So that is pretty much the "secret" that is actually not a secret at all. It's really just simple math.
As part of this journey of mine, I am very aware that money has been a barrier to some of those bigger dreams I have for a business, for instance. But I also know, that I need to change my perspective around it in order to knock that barrier down. I have a feeling this topic will come up for me quite a bit moving forward, maybe on some other "Money Monday."
Leaving you with a quote from J.D. Roth and Mr. Money Mustache's presentation at WDS: Be your own CFO.
Deanna Silva, CFO of Deanna Silva's $
PS The photo is from a trip paid for entirely on credit card (aka money I didn't have at the time or foreseeable future).