I’m thrilled to bring you another inspiring and practical story in my interview series, Inspiring Women in Recovery. This is a story of recovery from credit card debt which is probably something many people can relate to. It is something I also had to overcome once I began to work on my finances in sobriety.

Today’s story comes from a lady I’ve met in the personal finance world. Additionally, she has written a few guest posts for me previously. She goes by the name Good Nelly in the personal finance world.

I hope you enjoy and glean some practical advice from Good Nelly’s personal story of recovery from credit card debt…

How I Managed to Repay My Credit Card Debt

Now you see me as a personal financial adviser. I try to help people to manage their finances well and repay their debts.

But it’s not a God gifted talent. Rather I had to face an adverse situation to realize how important finance is in our lives. Life has taught me to handle finances well or else to face the consequences.

So, let me share with you all how I paid off my credit card debt.

Didn’t know the consequences of making minimum monthly payments

Like many other young people, I also started using credit cards without knowing how to manage them properly. Rarely did I know the consequences of not paying the balance in full every month. I used to make the minimum monthly payments on time and was happy I was paying my bills.

I also didn’t realize that it was affecting my credit score negatively.

But, one fine day, I got a call from a collection agency and realized that it was high time I did something to repay my credit card debt.

Finally planned a budget

I have mentioned in my previous write-ups too, that I was not good at budgeting initially.

Like many of you, I also used to hate budgeting. It was a daunting task for me. But, somehow I planned one; to be frank, it didn’t work out for me in the first go.

I tried envelope budgeting for a few days. It helped me to follow my budget.

With trial and error, I could plan a realistic budget after a few months.

Got a clear picture of my financial life and outstanding debts

I have learned one important thing while trying to clear my debts. That is, unless you have a clear picture of your financial life and your outstanding debts, you won’t be able to manage it properly.

And how will you do that? Well, here’s what I did…

I gathered my all statements and documents. Then, I took the help of pen and paper along with a spreadsheet and wrote down the name of the creditors along with the interest rate, the amount I owed, etc.

After analyzing my debts I found out that:

Credit card A had a $9,000 balance @ 10% interest

Credit card B had a $ 12,000 balance @ 12% interest

Credit card C had a $15,000 balance @ 14% interest

As you can see the outstanding debt amount was about $36,000. At that time, the minimum payment I was making was about $610.

I was struggling to make even the minimum monthly payments with my limited income. But fortunately, I could somehow carry on making some payments on my credit cards. However, I defaulted on payment on one card as I faced a financial emergency. I had to do an emergency car repair.

After careful thinking, I decided to approach a consolidation company

I heard my parents’ advice. They advised me to take help from a debt consolidation company as they would guide me in every aspect to repay annoying credit card debt.

I got referrals from my friends and relatives and finally approached a consolidation company to be debt-free.

It took about 2 and ½ years to clear my credit card debts.

If you’re also struggling to repay your debts, you’ll understand that you look for various options to earn and save as much as you can. The same thing happened to me.

During that time, my income was also not that much. And, I refused to take my parents’ help to solve my debt problems.

What I did was I took up some part-time jobs along with my freelancing job. My earnings were dedicated to paying back my debts.

However, just earning was not enough. I had to make some changes to my lifestyle to save more and more.

Lifestyle changes I made to save more

I advise people that one has to make changes to lifestyle to pay back debt and to avoid incurring more debt.

Here are some lifestyle changes that I tried to do.

Started having homemade food instead of eating out

I have a habit of eating out frequently. Often, I visited Starbucks for my morning cup of coffee. You won’t believe how much I could save after preparing my coffee myself at home. I started carrying my coffee whenever I went out for work.

I also started planning my meals during the weekends. That helped me to buy exactly what I would need in the following week.

Doing so, I could also save a significant amount in grocery shopping. I could also buy things in bulk because I knew I would consume it on time.

I got a friend roommate to motivate me

The apartment where I was staying was quite a big one. So, I decided to share my apartment with someone. But when you’re doing it, you have to be cautious.

Luckily, I was introduced to a friend’s friend who was looking for accommodation in my city. So, Lisa became my roommate.

Not only did she help me to pay back my debts by sharing my apartment cost, but also constantly motivated me to repay my debts.

Make a list before visiting any shop

One of the major reasons for my credit card debt was not thinking before swiping my credit cards. That’s why you need a list.

Those of you who’re trying to get out of debt, I would advise you to carry a list before you visit any shop. I would say make a list before you even go garment shopping. Doing so, you know exactly what you want. First, buy those items. Then, if you have money left from your budget, look for other items.

Likewise, when you go grocery shopping, first buy items on your list. Then, if you get enticed towards discount items, you can purchase them if you can consume them before the expiry date.

Along with this, I would also like to ask you all to start an emergency fund, which can help you avoid debt.

So, what do you think? Won’t you be able to solve your debt problems?

You can! Just take the first step!