Summer 2014 was the hardest time of my life. I like to call it ‘crying-in-cars-2014’, because I spent a lot of time crying in my car. I was anxious and depressed, and for some reason, my car was the place that all that shit surfaced. It all stemmed from of my money situation at the time, and my total lack of financial literacy.
At the time, my income averaged $900 a month, and I was carrying $18,000 in student loan debt. My work life consisted of catering for $12 an hour and working as a gym receptionist for $9 an hour. I lived with several wonderful people, none of whom carried any debt. That made me feel isolated and embarrassed at what my life was. I had a lot of free time and I spent it freaking out, and of course, crying in my car.
It was crystal clear to me that I needed to step up my financial literacy game big time and ASAP. All my anxiety stemmed from my money situation. I felt trapped by my low income and was scared out of my mind that this would be the rest of my life.
How could I break out of the shitty money cycle I was in? I knew that debt was bad, but paying it off felt impossible. Finding a full-time job seemed impossible since I’d never had one- my lack of experience kept me from getting the chance to earn experience.
I’m not sure how exactly I decided to do this, but one day I literally Googled ‘how to pay off student loans faster,’ and fell into the personal finance blogosphere. There, I discovered a world where people were talking about money from every angle. I found stories of people who had paid off hundreds of thousands of dollars in debt. Stories of people who retired at 30. Stories of people who increased their incomes and started their own businesses.
Suffice to say, it blew my fucking mind. I didn’t feel so alone with my money issues anymore. There were other people struggling too! There were people who had succeeded! And they were all writing about it, sharing the tools they used to pay down debt, grow their income, and reach for their audacious money goals.
Just by finding this world, my life changed for the better. My anxiety and depression lessened because I felt less alone. My financial literacy grew almost immediately.
Right away I started implementing some of the strategies I read about online in my own life. I followed the debt avalanche method to pay down my remaining $18,000 worth of student loans. I ruthlessly cut my budget to free up some funds. Side hustles became my religion, and I increased my monthly income.
In 2014 I made $15,000 total. I also paid off $2,000 worth of debt.
Within ten months of my introduction to the personal finance blogosphere, I had paid off all my student loan debt. Within 16 months, I had doubled my emergency fund and maxed out my IRA. In January, two and a half years after crying-in-cars-2014, I founded Bravely to help other women take control of their finances.
Financial literacy did these things for me. It changed literally everything about my life. I paid off my debt, increased my income, started investing, and eventually, started my own business. All from learning more about money and how to use it.
My road to financial literacy was a bumpy one. I was starting from rock bottom. Growing up, there was no financial education in my home. My mother was single-handedly raising three kids and getting her Master’s, and teaching my brothers and I about the power of compound interest just wasn’t high on the to-do list.
The online personal finance world opened me up to money topics I didn’t know existed, and gave me the tools to conquer the money problems I had in front of me. My specific questions were answered, because there were thousands of other people out there dealing with the same problems.
For example, I was desperate for a way to start beating my student loan interest. I learned that I could reduce my interest rate by .25% by signing up for automatic monthly payments. For someone earning $900 a month, that rate reduction meant a lot.
Taking it further, I also found out that student loan interest accumulates daily. The more often you pay, the less time interest has to grow.
So if I made a payment on Monday, interest started accruing again on Tuesday. If I made a second payment on Friday of the same week (rather than waiting until the next month) I only had to pay interest on four days accumulation instead of 30. That meant more of my payment went to eliminating the principal balance.
Expanding my financial knowledge with things like that made me feel powerful. It made me realize that I could take control of my money in small and large ways. If I could pay off $25,000 worth of debt never having made more than $30,000 a year, what couldn’t I do?
Of course I could start investing. Of course I could start a business. Money was just a language, and I was starting to speak it.
Financial literacy changed everything about my life. It helped me dig myself out of debt and start saving. I was able to start investing and begin to build long-term wealth. It gave me the tools and confidence to start my own business.