Part 2 of my Journey to Becoming Consumer Debt Free

confessions, Debt Repayment, Law School, Lawyering

I wrote a post to celebrate the day my credit card debt went from $11,000 to ZERO. It was a long journey and took me 4,500 words to share it. So I broke it into parts. You can start at the beginning in Part 1: Undergrad. You’re currently in Part 2: Law School and the time I spent practicing in Nevada. And up next will be Part 3: After I moved to Washington (coming Thursday). Let’s get started.

I am Consumer Debt Free!!! Read my 12 year journey of how I got into over $35,000 in credit card and car debt, and how I paid it off.

Part 2: Law School

Law school began and it didn’t take long to realize that the cost of living loans weren’t enough to actually pay the cost of living. Eventually, my credit cards were paying cell phone payments and grocery bills. Here’s a tip for you all, if you’re starting grad school, have some money in savings. That’s just good advice.

I want to take this time to include an Editor’s Note for context: I was the first in my family to go to college. I was incredibly unprepared financially for both undergrad and law school. Like I said in Part 1, I had an 80-90% tuition scholarship for Undergrad and worked full time. I received a 50% tuition merit scholarship for law school. During my second year and first-second summers of law school I received Federal Work Study. Federal Work Study meant that my student loans were reduced by the number of hours I worked during the semester/summer. For example, a semester’s cost of living was about $7,000 at Gonzaga. This should pay for all semester starting expenses like books (Which often cost over $1,000, even on Amazon) as well as whatever supplies you need, AND rent, food, gas, utilities, etc. I chose Gonzaga over Seattle University almost exclusively because the significantly cheaper cost of living in Spokane vs. Seattle (second consideration: GU had one of the top rated legal research and writing programs in the country). While I did work study, I got about half of that up front, and then I received pay checks from my internship, and the organization I interned for received a subsidy for my wages, meaning they got cheap labor and I got lower student loans while gaining incredibly relevant experience that I use daily in my current position. It’s a wonderful program and I still feel extremely blessed by it.

My law school apartment was $515 a month, my car payment was $323 (isn’t it weird the things you remember?), car insurance was about $140, and I don’t remember the rest. But if you take $7,000, subtract $1,000 for books, and divide by 4 (for ease, in reality it covers a little longer than 4 months because you don’t get the next check until the next semester starts, and I think it was a bit more than $7,000), that’s $1,500 a month. So after my small 1 bedroom apartment in a VERY affordable area of the country, and the legal requirements to own my car, I had $522 to live off of each month, BEFORE utilities. Needless to say, if you’re going to college and you see a cost of living estimate on your financial aid, do not believe that’s going to actually cover your living expenses.

Back to the story: You’re not allowed to work more than 10 hours a week during your first year of law school. I didn’t work at all during the first semester, but I got tired of only hearing about the law all the time. So during winter break I went back to Target, and proceeded to work 8 hours a week (4 on Saturday, 4 on Sunday) during the second semester. That provided a little extra cash – a LITTLE. Thankfully, I still had some help from my family. But I wasn’t about to call my grandpa and ask for $50 to go grocery shopping. I did have some money – can’t you see that none of those credit cards were maxed out?!

I am Consumer Debt Free!!! Read my 12 year journey of how I got into over $35,000 in credit card and car debt, and how I paid it off.

Sometimes student loan money went to mental-health snacks that we snuck into the library and took blurry photos of during final exams.

And that was it. The downward spiral of credit card debt. The kind of debt where you make the $80 minimum payment, and then charge the $50 that freed up before the next statement comes. The kind of debt where you spend the next 6 years paying interest on the cell phone bills, the car insurance, the groceries, and yes sometimes, the stupid wasteful purchases of clothes, shoes and cran vodkas needed to stay sane during three years of hell on earth. Some of it was worth it, most of it wasn’t, but I don’t regret paying my power bill on time (and honestly don’t regret some of that mental-health spending either, even if sometimes it was on alcohol or a killer deal on Burberry Rain Boots that I still wear).

I am Consumer Debt Free!!! Read my 12 year journey of how I got into over $35,000 in credit card and car debt, and how I paid it off.

A charity auction that a group I was a part of put on each year, see also, me before braces.

That’s an important part of this story that I should tell you. I’ve never missed a payment. I’ve only paid late a couple of times and it was because of a check mailing issue or an oversight on my part, and only by a day or two. The fees and marks were always reversed. I really did build up an awesome credit history that was only brought down by my debt to credit ratio. Even so, I left law school with about $11,000 in credit card debt. That’s A LOT of debt. I was 24, moving to a new town, starting my first grown up job, and ready to be rid of it.

My First Lawyer Job – Clerking

When I started my new job (a judicial clerkship) I let myself have one paycheck for fun things, and then I got serious. That paycheck wasn’t huge because I worked part time during bar prep, but it was still an awesome feeling to be working again! I made a chart. I tracked my spending. I paid things off! Credit Cards #3, #5 and #6 were done! I was so proud of myself. In roughly a year I made some good progress. I still had about $8,000 left.

I am Consumer Debt Free!!! Read my 12 year journey of how I got into over $35,000 in credit card and car debt, and how I paid it off.

I clerked in a really small town that didn’t have a Target or a Mall, and Amazon Prime didn’t exist yet. So I spent my time and money learning new things like how to bake holiday-themed cupcakes and snowmobile.

Becoming a Real Baby Lawyer

I got a job offer a month or two before my clerkship ended, and in that economy you had to take a job as soon as you got it. It was at a big firm and I made more money than I’d ever made in my life. It was COOL. It was less than new associates made in the years prior and significantly less than the general public thinks lawyers make, but again with the economy it was awesome. At this point I still had several friends who were unemployed or working in non-law jobs despite being incredibly smart and full of potential. Thanks a lot, Great Recession.

I traded in my beautiful jeep for a sedan with better gas mileage, and jinxed myself by saying, “I’ll never make less than I do right now, right?” Famous last words, young one. Here’s another tip for you guys, you can ALWAYS make less than you do right now. Income is not a straight line on a graph. It fluctuates. And it’s always better, did you catch that?, ALWAYS BETTER to plan for the worst.

But I didn’t. I bought a brand new Ford Focus. It was actually a better financial choice to buy new. I did the math on this. The difference in interest rates and upkeep made it a wise decision. And when you factored in the MPG difference from my Jeep to my Focus, the reduction in interest, and the cheaper car insurance, I actually saved money every month by making the switch.

I am Consumer Debt Free!!! Read my 12 year journey of how I got into over $35,000 in credit card and car debt, and how I paid it off.

Then, after buying this car, I made the incredibly wise decision that I would “enjoy” my first year of being a real grown up. Budget? Who needs that? Savings? What’s that for? Paying off my credit cards? I’ll get around to that later once I’m done experiencing what life is like when you can actually afford to live it. Remember when I used to make my own coffee in law school? There’s a Starbucks right next to my new apartment AND in the building of my office. Folgers is for fools!

When You Realize Your Income is Not A Straight Line Up

There were times during that fun-year that I would get home to several packages from Amazon and have no idea what was in the boxes. I bought whatever I wanted, whenever I wanted. And all I had to show for it was a closet full of J.Crew and Ann Taylor clothes and $8,000 of credit card debt. Oh and a new car.

The only bonus from this part of the story is that those work clothes I bought during my fun-year were a really nice quality. I still own and wear most of those blouses and suits. They’re in great shape and thanks to the fact that dressing like a lawyer can be boring classic, the clothes are still in style.

But then I left that job. I had really good reasons for doing so, but the economy sucked so I took a pay cut. A BIG pay cut. Luckily I had haphazardly saved some money, so that was able to carry the difference for awhile. But I could cry every time I looked at my credit cards and compared them to my closet. And my responsible new car purchase haunted me for years while I made a new-car-car-payment and made as much as $35,000 LESS per year than that first law firm job. Ouch. Thankfully I paid that baby off in January, 5 months early, and now I love her almost just as much as I loved my Jeep.

This was when I realized that income is not a straight line up. I took one glance at my debt and made the executive, 25 year old, decision to ignore it. I lived life on a budget again, and paid what I could, but I felt like I was making no progress and looking at the balances just made me feel bad about myself.

Leaving my first firm job was when I moved to Small Town and thought all of my life’s dreams had come true. I was wrong. Horribly wrong. And 6 months later I was offered a job in Western Washington. I took it in an instant. That job was an amazing blessing. It wasn’t a financial blessing. I didn’t get a raise. But I got away from a heartbreaking situation and a tiny little town I couldn’t live in anymore, and I had the opportunity to practice in an area of law that I am passionate about with some great mentors.

I am Consumer Debt Free!!! Read my 12 year journey of how I got into over $35,000 in credit card and car debt, and how I paid it off.

My first Pike Place flowers. Also, it’s kind of fun to look through these old photos and see how much better digital cameras have become.

As it turned out, God had amazing plans for my life here in WA. I am happier and more at home than I have ever been. But the journey was still just as frustrating, and even though I didn’t get a raise, I moved to the Seattle area where the cost of living is exponentially higher than anywhere in Nevada. This meant that I put my head in the sand for awhile, until I hit a financial low point and knew I had to make a change. 

Coming on Thursday: Part 3!

I am Consumer Debt Free!!! Read my 12 year journey of how I got into over $35,000 in credit card and car debt, and how I paid it off.

I AM CONSUMER DEBT FREE!!!! {Pt. 1}

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