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I am 37 and spent most of my twenties and early thirties battling mental illness. Simply put, I suffered from severe depression and an addiction that made it difficult for me to hold a job and maintain my physical health. With incredible luck and support from AA, I managed to be sober two years before him and now have a job with health insurance and everything (office job at a doctor’s office). working) and earning income.
I am relieved to be in a relatively stable place, but I know that I will spend the rest of my life working to overcome my past. One of the biggest effects it has had on me is that my finances are all messed up. My credit score is terrible (the last time I got the courage to check it was in the 400’s) and I have student debt despite not being a college graduate (I think it was about $18,000. ), about $9,000 in credit card debt. Especially since maintaining a functional life is relatively new to me, I don’t even know where to start. You can recover from depression and addiction day by day, but will you ever recover financially? right.
I understand why you feel like an insurmountable obstacle financially right now.But as far as I’m concerned, you did The hardest part is already done. Are you dealing with and managing mental illness and addiction and building a stable life with a good job and a strong community? I do not mean to make light of your financial difficulties. I know it’s stressful in another way, but you’ve already gathered the tools you need to deal with financial hardship. That is, a support system, a decent income and a desire to be responsible. , and the spirit of each day.
I also want to point out that you are not alone. Most people, regardless of evil spirits, sometimes feel that their financial situation is “backtracking.” Everyone says you should start saving in your 20s. Few Americans actually do. They are too busy to know what to do, juggling debt and other priorities. My point is, they have their reasons, just like you have yours. Most people I know feel that getting out of financial insecurity is a “late” start. So, as much as possible, let go of the idea that there is a standard for ‘catching up’. Because there really are no standards. Everyone is entitled to the comforts of financial security, but there are endless ways to get there.
The first step is to look up all the numbers and write them down. This includes how much you earn, how much you owe, the interest rate on your debt, your credit score (sorry!), your minimum monthly payments, and your typical monthly spending. Try to approach these numbers from a neutral standpoint. Do your best to adopt the cool demeanor of a detective or scientist, even though they will make gritty self-judgments. You are just gathering facts and information. Even better, have a friend sit with you while you scrutinize your bill to calm you down when it starts spiraling.
Once you have a clear picture of your financial situation, you have several options. Consider debt counseling first. National Credit Counseling Foundation is a non-profit organization that can connect you with a certified credit counselor, ideally one who has previously worked with clients in their recovery from mental health and substance abuse disorders. “It’s very common for our credit counselors to help people dealing with debt problems related to mental health crises,” says NFCC vice president of public affairs Bruce McCrary. When he was a credit counselor himself, he says he worked with “countless” people in the same position as you.
The credit counseling process works like this: When you call the NFCC, you’ll be connected to a counselor and your first session – free in most cases – will go over your finances and discuss your plans. A counselor can advise you on how to check if you are eligible for student loan forgiveness, how to improve your credit score, how much money you can put into monthly debt, and more. If you don’t like the counselor’s atmosphere, call the NFCC back and ask to be referred to someone else. You are in charge here.
The initial consultation may give you enough material to work with. However, if you need more direct support, you can sign up for long-term (that is, until your debt is paid off) credit counseling. If so, a credit counselor will come up with a debt management plan that consolidates some (or all) of your debt, lowers interest rates, and creates a viable payment plan for you. The process isn’t free (most plans cost about $35 a month, McCrary says), but sticking with it will almost certainly save you money. I think we are currently paying a hefty monthly interest rate far more than that fee.
A debt management plan includes ongoing access to a credit counselor and should be utilized. If circumstances change (for example, if you lose your job or have a medical emergency), your counselor should adjust your payment plan accordingly. They also have connections with other support groups such as: anonymous debtor and the Managing Substance Abuse and Mental Health Servicescan make referrals if necessary.
One of the drawbacks of credit counseling is that credit lines are consolidated, which can initially lower your credit score by a few points when you enroll. (Again, this only happens if you agree to enroll. If he just called the NFCC for an initial consultation, his credit score would not be affected.) However, Research by Ohio State University Those who enrolled in a debt management plan were found to have significantly better credit scores over two-and-a-half years than those who had similar debt and tried to manage it on their own.
Finally, if a fan has problems and misses paying multiple debts without it If you tell your credit counselor that something is wrong, your debt will be rolled back to your former creditors, or collectors, and you will be back in the same dire situation (but probably worse). not). But sticking to your plan and working with a counselor can help you have clear timelines and goals. Most people who sign up for credit counseling pay off their debt in four to five years, McCrary said. It’s not easy, but it’s easy.
So, that is also an option. Another is to contact your current support network for advice. Ask around for recommendations — Do you have a favorite certified financial planner you trust (emphasis on being certified!), ideally experience working with clients in recovery? The kind of person who can meet you for an hour and help you sort out your debt. payment options? You can also find a certified financial planner online, ideally through the XY Planning Network. Most companies have him do a free 15 minute consultation over the phone so he can assess if it’s a good fit for you. If someone tries to sell you something or promises too good results, run away.
Financial planners charge more up front than debt management counselors (sometimes hundreds of dollars per hour), but one of the benefits is that you don’t have to be part of a rigorous program. That’s it. They can also provide more comprehensive advice beyond debt management, such as how to start saving and how to make other strategic financial decisions.
A third option is to use existing resources to manage debt more independently. You can read books on personal finance (here’s a good list to choose from, Paco de Leon’s book) finance for the people This is also a good idea), enlist a friend or mentor to help you plan and stay consistent (you can do the same for them). You can set weekly money dates to check your cash flow and payments (actually, do this no matter what).You can find additional communities online, such as this excellent community women’s personal finance Facebook group. Professional support is great, but there’s plenty of free information and support to learn just as much at this stage. It all depends on how comfortable you feel with autonomy. Don’t be shy about creating lots of scaffolding if you know it works better.
Another thing is that you will be afraid that you will fail, become hopeless, and spend the rest of your life paying off debt.do not allow these very ordinary idea overwhelm you There are people in the world who are willing to help. Keep them close and good luck there.
The Cut’s financial advice columnist Charlotte Cowles answers readers’ personal questions about personal finances.Email us your money concerns [email protected].
