Five Ways to March Onward With Your Money, Without Falling Back

Learn along with me as I take more awkward steps into the future

mother duck leading four ducklings through a meadow
mother duck leading four ducklings through a meadow
Mother duck and ducklings walking across a meadow. Photo by Andrea Lightfoot on Unsplash

Back when I started this blog, I couldn’t have imagined that in a couple more years, I’d be factoring a big government stimulus check for a year-long climate-related pandemic into my personal finance update, but then I didn’t see the #SnyderCut of Justice League coming, either.

The month of February and, now, the first weeks of March, have been characteristically like those of any spring for us, yet also particularly like this spring, marking more than a year in a global health crisis: whippy, breezy, changeable, and strange.

For more than a year, contracting this blog down to the money obsessions of one middle-class person hasn’t sat right. Yet, as it has for more than a year now, dilating the scope to say more, and to say it better, feels beyond me. Maybe I should stick with apocalyptic toilet tips.

Powered by the relentless gears of the US preoccupation with productivity, I’m driven to keep on keeping on. Losing myself in the minutae of our money and the work I do to earn it still feels important, and is more predictable than the many loose ends, itches, and unhealed wounds of my ordinary life. Business-as-usual is a helluva a drug.

So, I’ll tell you what our money is doing, with tips on what I’ve learned from the last few years of debt-swatting.

What. The Fuck.

I am delighted and awed to say that even before the stimulus hit our house, our tax refunds did. So I made a big payment to supplement our usual honking big payment to debts, and managed to get our credit card usage down to TWENTY FREAKIN’ PERCENT. A month later, it’s now 16%!

Ilana from Broad City skipping through the bubbles in the park.

Soon afterward, I woke up one morning to this inexplicable bullshit:

Graphic showing a set of credit ratings in the 700s, considered Good, but also showing that the score recently fell nearly 30 points.
Graphic showing a set of credit ratings in the 700s, considered Good, but also showing that the score recently fell nearly 30 points.
Snapshot from Credit Karma showing a plummet of nearly 30 points on my credit score.

In all the years of grinds, ups and downs and downs some more, I’d never seen a drop like this. Everything in my profile was fine; I couldn’t see a single adverse action. Ironically, the score itself was something that once would have brought tears of joy to my eyes. Everything is relative.

The weird drop persisted through several cycles and eventually righted itself. I’m currently a remarkable 20 points shy of the much-coveted 800 score.

I never got a satisfactory explanation for the dip. Maybe my credit reporting companies plotzed from shock that I would finally clean up my credit?

Here’s to Better Days

That does not mean we’re out of the woods. We just have more of what the financial world considers “good debt.” Our home equity loan is steadily rising as we continue to borrow for my son’s last year on college. We still have four sets of student loans totaling more than $300,000. Our other debts are…healing:

  • Medical debt is under $700 now.
  • No more car debt.
  • Home mortgage is very manageable and steadily decreasing. I switched back to the twice-monthly mortgage payments that sneak a nice 13th payment in each year without a pinch.
  • We are making a small monthly payment on my husband’s student loan.
  • We have identified a workable plan for my son’s student loans when they start to come due.

What We Are Learning

Even though I planned and hoped for easier times, I secretly doubted they’d really come. I certainly didn’t see my luck changing during such depressing timing, as the bones of our system failures are exhibiting right and left, in suffering all around. That reality tempers my relief, to say the least.

Here is what we know:

  1. You are not imagining the deadly calculus of unfairness: More money earned leads to more possibilities. It just does. And volume matters. When I look back at our first year, at the energy I put into side hustling, penny pinching, and fruitless dreaming, what ultimately got us back on track was a job that pays about 40% more than my last job, plus steady increases for my husband’s teaching stipend. Sure, we have been careful how we dealt with it, and yes, I am proud of the changes we made, many of which are detailed here and still ring true:

We certainly experienced more ease in our cash flow, and better luck overall. Yet at the end of the day, 2019 was a game of two steps forward, two steps back. No amount of ingenuity or planning was going to lift us out of debt. The best I could do that year was maintain. One smart thing I did: I saved while paying down debt.

2. Save while you pay. Saving even while you are still in debt has multiple benefits. Most of all, the benefit is psychological. We felt less despondent and resentful keeping some money while we were paying things down. Most of the savings was money I never saw, because I had it withheld from my paycheck for my 401K. I did earmark $50 after-tax money each month for my IRA, a drop in the bucket that got me in the habit, for when I can increase the amount. We also now have an emergency fund — it took two years and a gift from a family member to push it over $1,000, although it has steadily grown since. But slowly.

Don’t be a hero ! The key is not to oversave. If your money is tight, a steady and modest habit is more valuable than dramatic leaps forward. The thin margin of your money might undo a big leap with an even bigger setback if you have to tap the funds, leaving you discouraged.

3. Know that you are playing a long game. Measure your progress mostly in actions taken, less in bottom-line changes, until you have been at this for at least two years. Paying down debt on a tight budget is a slog, and when emergencies come up, there will be setbacks. It is also an emotional process that stirs up all sorts of things as you go: pride, guilt, shame, regret, hope, desperation, you name it. You have to work intently to balance this stress with self-compassion, rest, gratitude, and, yes, the willingness to say you can’t do it alone.

Read more of my advice about cultivating the deep-debt mindset:

4. Be cautious about credit card balance transfers, points, and the like. I wrote early on about how you have to detox completely from these strategies when you are starting to recover from debt. Two years later, I have the scars to show from falling off the wagon, but I also now have more recent, decent success with paying down a zero-interest transfer in time. It takes discipline — a lot — and it is too confusing to do this with a card you have an active balance on. Only use balance transfers on a card with a zero balance already, and only shift what you can comfortably pay back in a year without new charges. Don’t use points at all until you can pay the card in full every month.

5. When you get a windfall, blow a little. You heard me. Whether it’s a tax refund or a gift, unexpected side income or a rebate on an appliance, earmark a little for something that’s just for fun. In 2020, we got a cash gift from a family member. Most went right to the debt, but a few hundred went to purchase a vintage end table I’d be lusting after. During thin times, window shop and make your wish list so you will be ready when a little extra comes your way. (This is a corollary to The Traumatic Budget Golden Rule of Recovering from Debt: Don’t Be a Dick to Yourself.)

I started doing something new this past eight weeks: I began to freaking take care of my body. I had some health scares this winter, and I am ashamed to say that even then — I did nothing. In February, I signed up with Noom (affiliate link, but I swear I stand by this app). It is primarily focused on weight loss, but the way the app works is actually an awful lot like what I had to go through to get better with my money, and the benefits go beyond a few pounds. The Noom training course is reeducating me about my whole relationship to food and exercise, undoing old knots of fear, resistance, shame, and denial, and teaching me to enjoy my life again in ways I wasn’t expecting. It’s reminded me how much the work of the last two years has been way more than saving a few shekels. It’s transformative to feel I have some control again, without punishment.

No spoilers on the #SnyderCut, by the way. But just this: Set aside four hours for it soon.

If you’re just joining me here, want to see how it all began? Click this post:

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I’m a 50-something bohemian with a mountain of debt and regrets. Can I dig out before it’s all over? I brake for poets.

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