How to get out of debt
Smart Cookie Katie Dunsworth talks finances and getting rid of debt in her new column for Best HealthBy Katie Dunsworth
Quick: What comes to mind when you think about the topic of your money? Most likely, it’s one of these: Avoidance. Denial. Embarrassment. Regret. Uncertainty. Frustration. Trust me; you are not alone. Just five years ago I was in my mid-20s and teetering on the brink of financial ruin, all the while living a double life as a posh-looking PR professional with a great wardrobe and beautiful condo. I never shared with even my closest friends that I was living a life that (A) I could not afford and (B) was negatively impacting every area of my life. I was lying to myself about how I was going to get out of debt and get my life on track—and I was even lying to my husband about what I spent and what I earned. I was losing sleep, breaking out in acne and facing minor anxiety attacks at the mention of debt.
My turning point came when my husband found a receipt for a pair of pants hidden deep in the trash. It was for $600. Looking at his disappointed face, I felt like some sort of junkie caught red-handed. I knew I’d hit rock bottom and began admitting to myself that I was behaving like an entitled child. In the days and weeks to come, I woke up to the reality that I was on a collision course to personal and financial self-destruction.
After opening up to a few like-minded friends whom I began talking to about my plans to reform my financial well-being, we decided to form a money group and support each other in our varied financial goals. In this group we shared details of our debt, our financial issues and even our salaries. Despite the fact that none of us has a financial background, we made a plan to make more money, spend smarter and get out of debt. And 14 months later, us “Smart Cookies,” as we dubbed ourselves, were able to sit on Oprah’s stage and share how we had paid off $50,000 in collective debt and increased our collective earnings by $120,000—all in one year. Over the same period of time my skin had cleared, I was sleeping better than ever and I had a solid routine to income. How? In my spare time I was able to find additional contract work, create an online account to sell my clothes, and rent a room in my apartment.
I also found new and inexpensive social activities (running and volunteering, to name a couple) that kept me happy and fulfilled.
What I know about money is this: Changing your mindset toward it and improving your ability to manage it can improve almost every aspect of your life. From self-confidence to your relationship with your family and spouse, to your levels of stress, money—or the lack of it—is too often at the root of our problems. I know that money is one of the last things anyone wants to talk about, let alone figure out how to deal with. (Why build a financial plan when you could pin images of quesadillas on Pinterest?) But bear with me, and you may be glad you did.
What I am proposing in my new regular column in Best Health is that if you have money worries, you join me on a journey to change your financial life one manageable and meaningful step at a time. In future issues I’ll outline the most self-destructive money moves, and help you spot the warning signs and chart a new path.
I believe I can help transform the cringe-worthy topic of money into a conversation you’ll actually look forward to having.
This article was originally titled "Be a smart cookie" in the September 2012 issue of Best Health. Subscribe today to get the full Best Health experience–and never miss an issue!