My Darkest Financial Secret

This will be a tough post to write. Not because the news contained within is shocking or surprising, but because it is the first time I've been completely, totally, 100% honest my own money choices. Here is my deepest, darkest, dirtiest secret about my finances….

My Darkest Financial Secret

For those just tuning in a little back story: I bought my first home in July 2013. I funded the renovation with a 203k loan, but went over and had to raid my savings account to finish the project. Having no savings cushion then led me to lean on my credit cards for “emergencies” in the Fall of 2013 and by NYE 2014, I was 8,432.16 in debt. 

I've been tracking my net worth all year and detailing my debt payments in the quarterly net worth updates. I was doing well on repayments, until the summer. My beloved dog died, my identity got stolen, and I had an intense falling out with a roommate all within the span of three weeks. On top of everything else I was still dealing with from the Fall (broken engagement, runaway renovation), it felt like a ton of bricks.

And if you've been reading here for a while, you know that I have a problem with shopping my feelings. Which is exactly what I did.Always saying “yes” to myself and opportunities instead of saying no, because GOD did I need cheering up, and badly.

At the end of July I was $10, 832.14 in debt, almost 3k up from where I was in April.

For shame!

By Fall 2014 I was feeling better and I managed to make some progress on my debt repayment. I paid back my parents in full. I paid off my small, lingering, student loan. (The smartest decision I made was paying off accounts that couldn't be racked up again, so that debt is now gone for good!) I saved enough money to put down a sizable down payment on a new-to-me car I bought in November that I desperately needed.

Between my savings, my home appreciation, and my winning retirement accounts, my net worth did increase over the year.

All-in-all there were some financial victories in 2014.

But ultimately, 2014 was a year of financial failure, because honestly, I was too enthralled with the emotional things that were going on around me to pay too much attention to where my money was going. I am disappointed that for years I've prided myself on being a go-getter and a goal reacher, and my biggest financial goal in 2014 was to pay down all of my debt. I did not get there. Not even close.

I ended 2014 $8,164.97 in debt (does not include car loan.) This is only $300 less than where it was when I started.

Because I use my YTD spending tracker, I was, however, able to see how much I did put toward my cards. I made $11,011.54 in credit card payments this year, which would have been enough to cover all of the debt and then some.

How? Why?

Put simply: I was paying off debt, but only at the rate at which I was spending. 

Please let this be a lesson to those of you working your way out of debt right now: STOP USING YOUR CARDS. You will never get anywhere if you don't.

Currently, mine are in my freezer.

Where We Go From Here

I took a lot of time off over the holidays to rest from a stressful year and reflect on what is most important to me.

  • I've decided that 2015 is the year I'm going to stop letting the emotional turmoil of my past hold me back.
  • This is easier said than done, but it also includes my debt. Debt keeps you shackled to your job, your life, your location. Whether you realize it or not, debt comes with large emotional baggage.
  • As a New Year present to myself, I put $1,000 from my savings to my debt on January 2nd.

So as of right now, my debt sits at $7,164.97.

And as of January 1 2015 I'm on the Spending Diet, as created by the lovely Anna Newell-Jones. The gist of it is that you only spend on necessities, and give yourself $100 of “play money” each month. This is different than the spending fast where you don't spend anything except what it costs for rent/utilities/gas and groceries. That seemed a little too strict for me to begin with, but I liked the idea of the diet, so I'm trying it out.

Halfway through the month, it is going OK.

I've set a pretty lofty goal of trying to pay down all of my debt by March 31, which math-wise means I have to put $1200 toward my debt every fifteen days (and then a little extra at the end.) It's ambitious for sure, and I don't know what life is going to throw my way, but that is why I am sharing it with you all- to put it all out there and keep me accountable once and for all. I've also been inspired by other finance bloggers who came clean about their debt, like Carrie and Stephanie of the Empowered Dollar.

I hope this inspires some others out there battling with recurring credit card debt to join my movement, throw the cards in the freezer, and get free once and for all. This is Part 1 of what I'm calling the LBMT- Get Debt Free Plan.

I can't wait to share the progress with you all as the months go by. Anyone else have their finances in the plan for 2015?

Update: See my January Debt Repayment and  February Side Hustle Income Update.

Final Update: See how I paid off all $8,000 in 90 days here. 

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  • Slave_to-the_man
    February 4, 2015 at 9:44 am

    So why do you not include car debt in addition to the $8,100? That is bad debt. Nobody “needs” a brand new car. If you had a “sizable down payment,” you should’ve bought a beater that got you from here to there. No need to buy new. You should sell the car and get rid of that debt. Get a beater. You’re broke, and can’t afford a new car. Good luck.

    • Lauren Bee
      February 5, 2015 at 3:43 pm

      I’m glad you brought this up. My car is “new to me,” I didn’t buy a brand new car. It’s a 2013 with mileage on it. And I do plan to tackle the car once I approach the credit cards. And while getting a beater and being debt free was tempting, I live in Atlanta and have a considerable commute, so being comfortable and having a reliable vehicle was important. I’m not advocating that what is right for me is right for others, and in the end suggest people should do what feels right to them.

      For me, it is important to look at it as two separate debt buckets…well three if you count my mortgage. This keeps me from being overwhelmed. Hope that makes sense. Thanks for commenting!

  • Laurie @thefrugalfarmer
    February 3, 2015 at 8:49 am

    Lauren, you got this. There is no shame in failure, the only shame is in not trying. Keep up the great work. You are working a solution, and that is the important part. And the pf community is here for you all the way.

    • Lauren Bee
      February 5, 2015 at 3:40 pm

      Thank you Laurie!

  • Carrie Smith
    January 20, 2015 at 8:27 am

    Lauren, I’m inspired by your candid look at your situation and your bravery in sharing it publicly. As someone who has personally struggled with being in debt, getting out of it, and then finding myself back in debt again, I can relate to what you’re going through. And it’s tough. I have yet to find a set of spending habits that I can stick to, and haven’t made nearly as much progress on my debt as I’d hoped either. This update has me thinking I need to write a follow-up to my summer 2014 challenge. Thanks for the shove! <3

    • Lauren Bee
      January 20, 2015 at 11:21 am

      Thank you Carrie! It is a struggle, and I also haven’t found one spending plan that works, but I think I’m on my way to finding a process. Keep us apprised of your progress!

  • MakintheBacon
    January 16, 2015 at 9:04 pm

    Kudos to you for being brutally honest about your finances. It takes a lot of guts to do so, especially when you’re a public and popular figure in the personal finance/blogging world. I kind of screwed up my finances momentarily by not saving up for Greece, but going anyway (I think I’m an emotional traveller..lol). Thankfully,things ended up turning around by getting a raise at work and getting an additional 6k from work backpay and severance pay combined.

    • Lauren Bee
      January 19, 2015 at 2:26 pm

      I also travelled a lot this year without saving up first, we all do it. Don’t beat yourself up!

  • Shannon
    January 16, 2015 at 9:08 am

    I am sure that this was one of the hardest posts you have ever written Lauren, but I applaud you for your bravery! You now have lots of accountability buddies and cheerleaders rooting you on as you tackle this! Good luck!

    • Lauren Bee
      January 19, 2015 at 2:26 pm

      Thank you Shannon! Your support means everything 🙂

  • Michelle
    January 16, 2015 at 4:39 am

    Don’t be so hard on yourself. I’m an emotional spender and sometimes things just sneak up on you. You had an intense 2014 and that was a lot of stuff to manage. I think you will be fine and that you will kick this debt’s a@@! Looking forward to reading your paid off post.

    • Lauren Bee
      January 19, 2015 at 2:26 pm

      You know what? I’m looking forward to that day, too.

  • J. Money
    January 15, 2015 at 9:23 pm

    YOU CAN DO IT!!!

    Look at everyone here cheering you on 🙂 Tell us what we can do to keep you on track! Want me to text you every two weeks? Write you a hand written letter in the mail? Charge you $20 every time you miss a mission? Haha…

    Either way, we all know you can do it and we’re all rooting for you 🙂 2015 is the year of the L Bee and her (full of money, not debt) Tree!”

    • Lauren Bee
      January 19, 2015 at 2:40 pm

      I would love a letter! lol, but I just love letters in general.

  • BrokeMillennial
    January 15, 2015 at 3:44 pm

    You can do it! I’m so impressed you came clean and now you have a bunch of people in your corner supporting you.

    • Lauren Bee
      January 19, 2015 at 2:40 pm

      I know, I’m so floored by all of this support. I thought people would be internet yelling at me in all CAPS.

  • Janine
    January 15, 2015 at 3:35 pm

    I think it’s great that you shared this, I’m sure you will kill your debt in 2015! Good luck!

    • Lauren Bee
      January 19, 2015 at 2:40 pm

      Thank you!

  • Shannon Ryan
    January 15, 2015 at 1:27 pm

    I appreciate your honesty, Lauren. I know you’ve had a tough year and it is really easy to soothe yourself through shopping. I know you don’t want to be in this place right now, but it is temporary, you are owning up to it and doing the work that needs to be done. Proud of you and cheering you on!

    • Lauren Bee
      January 19, 2015 at 2:40 pm

      So much is in flux right now, but I want this monkey off of my back!

  • Bailey
    January 15, 2015 at 1:25 pm

    Thank you for being honest! I made some poor financial decisions in 2014 (taking out a personal loan I could have done without if I only saved my money!) and didn’t budget until August. I’m looking forward to 2015 to getting on track!

    • Lauren Bee
      January 19, 2015 at 2:41 pm

      Ah yes, the personal loan.I have been there before.

  • C@thesingledollar
    January 15, 2015 at 11:18 am

    On the one hand, obviously you do need to make some changes/not keep spending, and on the other, I think you should cut yourself some slack. You had the definition of a tough year. People make shitty financial decisions for worse reasons. Look at it as a relatively non-disastrous learning experience, know in the future that you’re prone to this, and move on! Thanks for writing about this.

    • Lauren Bee
      January 19, 2015 at 2:41 pm

      I should call you whenever I’m having a bad day, you’re great at making me feel better!

  • ValleyForSanity
    January 15, 2015 at 9:34 am

    Yes! I had the same year. I’m not giving up all of my credit cards, but I already shredded the ones that are on my 2015 pay-off list. (Paying off all of them will take me more than one year.)

    • Lauren Bee
      January 19, 2015 at 2:41 pm

      That’s fantastic. I just find that having them in the freezer is better than keeping them in my desk drawer at home. Now I can’t pull them out the instant I need something, I legit have to think about it, or as is often the case, I use my debit card and pay cash.

  • ShenDove
    January 15, 2015 at 9:09 am

    I really appreciate your honesty! Dealing with the emotional aspect of debt is the hardest part of all. Cutting up cards has been effective for me in paying down CC debt in the past year, but I still have away to go to get to zero. Hoping I can look back a year from now and be credit card debt free.

    • Lauren Bee
      January 19, 2015 at 2:25 pm

      I look forward to catching up with you on that!

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