By Erin Frank as told to Alden Wicker
NEW YORK (Learnvest) — In 2005, I moved to New York to start a job in book publishing. I had $28,000 in school debt and no credit card debt — but I underestimated how much it cost to live in the city.
I was making only $30,000 (about $27,000 after taxes), yet I wanted anything and everything. I was a huge fan of Broadway. I wanted to go out to dinner. As a result, my credit card exploded — in a year, I went from zero in credit card debt to $8,000!
My mom was really concerned, so she lent me the $8,000, with no interest. I used it to pay off my card — and then started charging it again.
One day in 2008, I tallied up my personal loans and credit cards and realized that I was $16,000 in debt — and that didn’t include school loans. It was more than half of what I made in a year.
When two co-workers and I started joking about how broke we were, I realized we were in similar straits. We looked around for help and inspiration, but we could find only investment and money planning groups for older individuals — people who made at least twice as much as we did.
So I proposed starting our own group, which we called “Money Lunch.”
My debt aha! moment
We brought lunch from home (of course) and met in a conference room to share our financial positions. We were honest to a fault and, most importantly, we never judged each other — no one’s debt made them good or bad.