Growing up, I was always good with money. I was the responsible child, who saved and began building an emergency fund at five years old. However, by my early 20s, I was buried in thousands of dollars in credit card and student loan debt, living paycheck-to-paycheck and barely making ends meet.

The Downward Spiral

When I signed up for my first credit card at 18, I was doing it to build my credit; I made sure I knew all the dos and don’ts. I’d never be someone with no control over their debt: easier said than done. I went to a great college, one that required a great amount of loans to attend. I worked (usually multiple jobs) to cover my expenses and tuition. But, it was never enough and soon I was charging $100 textbooks to my credit card along with clothes, a laptop.

By graduation, my loan debt was $40-50k. I would panic, if I thought about it too long and I couldn’t even face my credit card debt. Besides, I was trying to live in NYC and work in fashion, an industry rooted in appearances and aesthetics. I bought outfits that I couldn’t even afford with what I was earning. This was simply the price of making it in an industry, where post-college (unpaid) internships are common, I should be grateful, right? Be patient. Pay my dues.

I do not know when enough time has passed to feel worthy, but I couldn’t wait anymore. I had been out of college for two years. All three of my major credits were maxed out; one of them was closed because I would not agree to the new astronomical interest rates, which tanked my credit score. I was barely making my loan payments. I was trying to be proactive without really handling the situation, until I started getting the calls…

I had been paying below the minimum payment on my loans, but still making payments so I figured that was good enough. Then, my college’s debt collector began callin repeatedly. One time, I accidentally answered, which was one of the best mistakes I’ve made. When I tried to refute the collector that I had been making payments, he replied that I cannot just pay what I want when I want. He was right. How could I argue? If I couldn’t afford my payments, I needed to file for forbearance, which was no easy task.

My Financial Diet

My application involved a letter of financial circumstances, pay stubs, a breakdown of monthly expenses, recent tax returns, and proof of loans and credit card payments. Going through the exercise forced me to look closely at my finances. Over 50% of my monthly income was going towards debt. After rent and food, I had pretty much nothing, which made me turn to charging up credit cards. I was stuck in a vicious cycle and needed a way out.

I visited to websites such as LearnVest, a female-focused personal finance site, for free advice and success stories. I could have enrolled in their enhanced memberships with financial consultants, but it didn’t make sense for me to spend money to save it. I created my financial mess and it was important for me to clean it up myself. Moreover, I felt that would make a better learning opportunity for me. Reading these stories, I knew that I wasn’t going to eat off dollar menus, start a catering business on the side, or move to a cheaper town to save. However, they gave me ideas that I could apply to my own life.

I needed to stop using my credit cards. I paid at least twice the minimum card payment, unless it was more than I could afford. I cut back and bought things with cash only. The only thing out of my budget that I kept was my gym membership. Fitness was also a major priority and besides the membership, my goals dovetailed perfectly.  I rarely ate out, bringing lunch to work daily, cooking large healthful meals for the week, going to 3 different grocery stores for the best prices and produce. I lost weight and saved money.

I forbade clothes purchases until pieces were too big so I bought some basics, became creative, learned to repeat outfits more, and wore plenty of black. After bad dry cleaner experiences, I invested in a $30 streamer a few years back. From there, I became my own dry cleaner and laundromat. I hand-washed, hang-dryed, and steamed my clothes. It was tiring and time-consuming, but I knew every coin counted.

I applied for a credit card with a 0% APR for a balance transfer. Of course, I was declined; my credit score took a further hit. In my rejection letter, I saw just how bad my score was and couldn’t remember the last time I checked it. Using Credit Karma, I began to monitor my score, utilization rate, history on a monthly basis and steadily built my credit.

I searched for part-time employment to put the additional income towards debt. I also recognized my need for a new full-time job. I was unhappy at work, so I discreetly started interviewing. I knew I could find better.

The Aftermath

My turning point began in March 2012. In the year to follow, I found an amazing job, nearly doubling my income while doing occasional side work; raised my credit score over 100 points; paid off over $7,000 in credit card debt; started an emergency savings fund. Through Learnvest, I was able to start a money club with other money-conscious NYC women, who have been like a support group to me. The club has educated and pushed me beyond my goals, such as setting up an emergency fund for 6 months instead of the three I was aiming for and opening a Roth IRA on top of my 401k, while making some great friendships.

I can’t believe the person I morphed into over the past year. I write this on the heels of receiving my statement for what was once my highest-balance card, which now has a minimum payment under $30 and I will pay off by the end of 2013! My financial transformation has been empowering, especially knowing that I have gotten here through my own hard work, learning and dedication. I have had short-lived financial kicks, where I promise to be more responsible, but only stick to my budgets for a month. Now that I have been on this journey for the past 16 months, achieving my goals, I cannot revert back to my old ways. At this point, saving comes as naturally as breathing; something I can now do, even at the mention of my debt.

 Useful Links:

https://www.learnvest.com/

https://www.creditkarma.com/

http://www.bankrate.com/

Originally from Miami, Carla moved to NYC to pursue her education and a career in the fashion industry. While following her passion for fashion, she also enjoys navigating the ins and outs of personal finance and debt. Her other interests include vegan cooking, studying foreign languages and sewing.