Episode Transcript

Melanie Lockert

McKenna: [00:00:00] Hello, everyone, and welcome to Health: It's Personal. We're so glad you're here. We are talking about financial health. We are in our financial health series. We have so many wonderful guests, especially the one that we talked to today, Melanie Lockert of Dear Debt. This brand she created called Dear Debt, of course, has been influenced by her journey with that and kind of going on the trajectory that she always thought she was supposed to, going to a private university, thinking she would get like a big paying job right out of college and being a little bit let down by that and then severely overwhelmed by her student loans. And so this is a super relatable conversation, how she explains how we can write letters to debt, Dear Debt, I am breaking up with you. So she's so charming and so smart and we're so thrilled that we had her on the show today. [00:00:52][52.5]

Karen: [00:00:53] Yeah, she's absolutely brilliant. All of her advice was so easy to follow. Practical, no judgment, no shame. It's almost like having someone who's been on the journey, just holding your hand and kind of guiding you along the way. And I really like that about her. [00:01:10][16.6]

Sean: [00:01:10] Usually when I hear conversations and tips and suggestions like these, it can go into a few different directions. And in my opinion, many of them will go into like pretending everything's going to be great no matter what, and like avoiding the real talk about these situations. And it's just focusing on I'll just be positive and stuff like that. But I feel like Melanie does a great job of balancing that realistic, transparent truth behind everything. You know, you have to see the numbers. You have to admit to yourself, this is what it is. I have to pursue this path or else what? Right. What else is my option? But at the same time, setting your intentions, creating, you know, your dream wish lists and what you want your life to look like once debt is gone. So I really appreciate that. [00:01:53][42.4]

McKenna: [00:01:53] Her journey led her down an unexpected path. And this is something we talked about in our coping series, too, is mourning the loss of the life that we knew before and knowing that the only way to move through it is forward, which might look a little different than it did, you know, when we started this new journey and I saw a lot of similarities in the conversation that we have with Melanie today, too. [00:02:18][24.3]

Karen: [00:02:18] Hundred percent. [00:02:19][0.4]

McKenna: [00:02:19] Yeah. And she also talks a lot about how it's a big mental state. It has a lot to do with your mental health. And that's not necessarily a conversation that everyone's having. So her letters to debt and inviting other people to write their letters to debt, is such a great way to have that conversation. [00:02:37][17.4]

Sean: [00:02:38] Yeah, I really appreciate just that, because I know so many people who grew up in poverty or who have struggled financially or who had really great lives but had a massive life change, especially around middle age. You never know what's going to happen in life or where you're going to be next. And that mental health journey with the financial journey is so important to address head on, just like we're looking at. Here's exactly how much I owe. I have to look at those numbers. We also have to address that mental health aspect and the other impact it's having on our lives and the changes it could bring. [00:03:08][30.5]

McKenna: [00:03:09] Yeah, sometimes it could be crippling to think about looking at that actual number that you have. And so we ignore it. But the only way to feel better about that situation is to have all the facts and educate yourself and know your interest rates and know the steps you need to take to move forward. But we can continue to put things like that off because it feels so scary. [00:03:31][22.0]

Sean: [00:03:32] Damage report. [00:03:32][0.3]

Karen: [00:03:32] Yeah, really scary. When McKenna was small, I was a single mom and going to college and had all of the college debt and was going to be an educator. So. So where Melanie had that opportunity to make additional money, I didn't feel like that was possible for me. But I love how resourceful she was and finding ways to increase her income so that she could make such an impact on her debt. [00:03:59][27.1]

Sean: [00:04:00] And it's a very, like, realistic millennial story. When we hear millennial in the news, we I think people still forget it's not teenagers, right? They're full grown adults where, you know, forties and up soon. So it's a very much real life human adult story. And I loved, you know, that hustle. And I wish it wasn't that way, of course. But, you know, it's just so relatable, I think. [00:04:22][22.5]

McKenna: [00:04:23] Yeah. And I think a lot of people right now, too, like she felt like when she got out of college, it would be a no brainer. I'm going to get a great job because I put in all this work and that's what people told me. And I just signed at the dotted line for my student loans and without any real conversation or education on the matter. And then it might have felt like a slap in the face when that wasn't the case, when she graduated and she was having a really hard time making New York rent and working twelve dollar an hour jobs. And I think that's incredibly relatable to a lot of people living in big cities. [00:05:00][36.7]

Karen: [00:05:00] I think it's really important to understand when you're going through tough times, whether they're mental health challenges or financial challenges, whatever they are, that this is a moment in time and that these don't always last forever. McKenna and I have talked about this before, but I was thinking when she was talking about it, about looking at your life in little tallies. Yeah. And then you can really see how short this pandemic is or how short it is to pay off. Four years of debt seems like forever. You know, it probably felt so long for her. But in the grand scheme of things, in the grand scheme, it's not what you think. [00:05:41][40.8]

McKenna: [00:05:41] Yeah. If you write down a tally for each year, I would write down from now one hundred and twenty five more tallies. Yeah. Of my life. And then this one tally looks like nothing. [00:05:53][11.2]

Sean: [00:05:53] Yeah. Mm hmm. One other thing that we didn't really touch on today, but I find it so important is that balance between if you're on this journey to pay off debt, you also have to remember to live now. Yeah, we might be cutting back on things. We might be saving we might be focused wholly on paying off that debt. But you also have to remember that sometimes we only just have right now, too. And that doesn't mean we should just spend it all, like just buy everything right now. [00:06:20][26.8]

Karen: [00:06:20] No, but we're only guaranteed today. Sean, that's such a great point. [00:06:23][3.1]

Sean: [00:06:24] Yeah. And that was our struggle when we were paying off Jim's student loan debt. And it was that struggle of, you know, especially having grown up in poverty. You know, I'm so focused on getting rid of this debt and I'm so always anxious about all the money problems. But how do I pause that for a moment and just enjoy this? Is it OK to decide to do this one small thing for myself? Is that selfish? Is that irresponsible to, like, go to dinner? Right. But some people are struggling with that. [00:06:53][29.7]

McKenna: [00:06:54] That's a great point. And it's about balance. And I think that Melanie mentioned a lot about the aspect of it, where people feel like their lives aren't even worth living anymore because their debt is so crippling. And that comes from them not being able to appreciate the day that they have in this life because it is solely focused on paying off their debt and they don't know when that's going to end. And so giving ourselves a bit of space to live is so important and crucial to our mental health. [00:07:28][34.2]

Karen: [00:07:29] Yes, absolutely. Melanie mentioned that you aren't your debt. This doesn't define you. And this is a moment in time, but it can feel very crippling. And please know that you're not alone. The Suicide Prevention Lifeline is available and it's at 1 800 273 8255. [00:07:50][21.1]

Karen: [00:07:52] Many of our guests have mentioned to us about Seven Cups is a great resource as well. And Melanie is such a generous and loving soul. And she would be happy to share her experiences through her blog and her podcast. Please know that you're not alone and that your life is worth living and there is life on the other side of your debt. [00:08:13][21.1]

McKenna: [00:08:14] Yes, absolutely. So everyone, please take care of yourselves and again, know that you are not your debt and that we're here for you and there are communities out there. And please grab a cup of tea and enjoy. [00:08:26][12.5]

Podcast Intro: [00:08:29] Health is harmony. When you're aligned to everything you believe in is when you feel that harmony, and you feel peace. Trying to get to the root cause of things. There is just so much to learn. Can you be present in those moments in your life that mean the most? Because health, it's personal. [00:08:45][15.4]

McKenna: [00:08:47] Welcome, Melanie. We're so glad you're here to share your wisdom and insight with us and our listeners. You're an author, speaker, writer and podcaster. And your work is largely inspired from your own journey with that and has evolved into a love of helping others in this area. If you wouldn't mind, please share with us more about your background and your journey. [00:09:06][19.9]

Melanie: [00:09:08] Yes. Thanks so much for having me here. I'm so excited to share my story. So, as you mentioned by name is Melanie Lockert and I'm the founder of the blog DearDebt.com. I also hosted the Mental Health and Wealth Show. And so my journey into personal finance and debt repayment really started around eight years ago, which is crazy to think about. But eight years ago is when I really decided to say enough is enough and I'm going to pay off my student loan debt. So just a little glimpse into the year before that, 2012, I was severely depressed about my student loan debt. I had graduated from NYU with the master's and performance studies. I had this idea that I was going to have a nice arts job in New York City and, you know, live this amazing life with arts and culture. And I couldn't find a full time job after graduation, I was teaching theater in Harlem and having a few part time jobs cobbled together, but not enough to pay New York rent as well as student loans. And so I made the difficult decision to move to Portland, Oregon. After that, my then partner was there. So I had other reasons to move as well. But I thought it's more affordable there. I'll be a big fish in a small pond. Everything will be better there. And that was not necessarily the case. [00:10:31][83.1]

Melanie: [00:10:31] I went to Portland and all I could find were 10 to 12 dollars an hour temp jobs. And I also was on food stamps for a brief period of time. And so this was not what I had imagined my life to be. After getting a master's degree from NYU and so I was so depressed about my student loans, I felt anxious because it was such a huge amount of money. In total, I borrowed eighty one thousand dollars. But, you know, I had gone to school at two different times. So by the time I graduated NYU, I had been paying my undergrad loan for about five years and so I still had sixty eight thousand dollars left and I just had no idea how I was going to pay it back. I felt so much shame because I went to this fancy private school. I felt a lot of guilt that I went to this private school and that I also didn't have a job to actually pay it back. Like I felt so many emotions. And, you know, a lot of us can relate to having our job and our income equate to our self-worth. [00:11:34][62.4]

Melanie: [00:11:35] And so because I couldn't really find a full time job making any kind of decent money, because I had all of this debt, my self-esteem was so low and I was so depressed and pretty much a year of that, I just realized if I could spend the same amount of energy I do crying, worrying, obsessing about my debt, actually trying to pay it back and do something, maybe this, you know, will work out. And so that was really the impetus of me starting Dear Debt. I had discovered personal finance blogs and I thought, I want to start my own. I want to start it as a tool to keep myself accountable in the debt path process. And I really want to highlight the emotional relationship to debt in the mental health struggles, because I wasn't seeing that in any of the personal finance blogs that I was reading. And so the concept, Dear Debt is really based on the Dear John concept, like writing breakup letters to debt. And so, you know, throughout the blog and the journey, I was able to pay off my debt in a few years. It completely changed my life, having that blog and setting that intention. And I was able to freelance right after that and do a bunch of other things. And I paid off all of my debt in December 2015. [00:12:48][73.3]

Karen: [00:12:50] That's amazing. Wow. I love that you said that you just changed your energy, like where your energy was focused. I can relate to that sometimes. You know, you get caught up in putting your energy or you're upset or thinking about how things are instead of how things can be. And I love that you refocus. That's really cool. [00:13:11][20.7]

Melanie: [00:13:11] Yeah. I just realized that, you know, I kept kind of spinning my wheels and just going on this cul de sac, this broken record of thinking. And I was like, clearly this is just making me miserable and nothing's changing. So I have to do something differently. And, you know, I tell a lot of people that I coach, you know, what got you into this situation isn't going to be what got gets you out of this situation. So you have to do something different to get different results. [00:13:37][25.8]

Sean: [00:13:38] Very good point. Mm hmm. [00:13:39][1.2]

Karen: [00:13:40] Well, your book contains those letters. Did you actually write a letter to your debt yourself before you started the blog, or did you think this is a cool idea for a blog to really get people's feelings out? [00:13:52][11.9]

Melanie: [00:13:53] So I didn't actually write a breakup letter until I started the blog. And actually, it kind of was something I did about six months into the blog. So actually the original name of the blog was Do or Debt because it was like a do or do or die situation, except a lot of my blogger friends were like, it looks like DoorDebt when you read it as a URL... And I was like, oh no, it's not Door Debt. It's Do or Debt. And so I was like, you know what? I think I need to, like, change this. And I also was thinking, now, how can I really stand out and show that I'm the blogger that's talking about emotions and mental health. And then I thought, you know, what about writing breakup letters to debt? Because I had already been anthropomorphizing debt and talking to debt as if it were a person anyways and kind of having that relationship. So I thought, let's write this breakup letter, let's have a fun creative outlet for them. [00:14:50][58.0]

Melanie: [00:14:51] And so that's when I kind of rebranded as DearDebt.com, like about six months in. And I invited the whole world to write Dear Debt letters as well. And so. I wrote a bunch of Dear Debt letters throughout the years and I opened it up to the community and we've had so many wonderful Dear Debt letters over the years. Some are incredibly funny, some are incredibly painful. Some are more positive, like, dear debt, thank you for keeping a roof over my head. Dear Debt, thank you for putting food on the table, you know? And so it was so wonderful and interesting to see so many different perspectives and so many different relationships to debt. [00:15:29][38.2]

Karen: [00:15:30] Yeah, I think we don't talk enough about mental health and financial wellness, but your book contains letters from you to your debt and it breaks down complex financial concepts into clear, manageable tools, step by step processes and acts as a workbook at times in order to provide practical wisdom and steps to take that the readers might move forward in their journey. Would you mind telling us a bit about how this process helped you? [00:15:58][28.7]

Melanie: [00:15:59] Yeah. So the process that I outline in my book is really focused, first focused on mindset. So, you know, you really have to commit to saying I'm going to pay off debt. You know, I think a lot of us get stuck in this mindset of like, I'm never going to pay off debt or money is evil or this is too hard. And I forget who said the quote, but it's something like whether you think you can or you can't, like, that's going to be the result. Right? Like, do you think you can then, you can. If you think you can't, then you can't. So it's really important to believe that you can and you will, even if it feels like it's impossible. [00:16:39][39.6]

Melanie: [00:16:40] Because when I started my blog in January 2013, you know, I had said I'm going to pay off this amount of debt in four years. At that time when I started the blog, I had about fifty seven thousand dollars and I was making twelve dollars an hour at a temp job at that time. And I was like, I have no idea how in the world I will pay this back in four years. But that's what I said. And a bunch of amazing things happened that actually made it possible to do that even in a little shorter amount of time. I really think setting a big goal is important. I really believe, you know, kind of shifting your mindset and reassessing, you know, your money beliefs, because I had a lot of beliefs about money that were keeping me stagnant. You know, I thought student loans are the good debt. Everybody has student loans, you know, like, oh, it's not it's not that bad. [00:17:26][45.8]

Melanie: [00:17:27] And so even though those statements seem pretty innocuous, I realize that they were holding me back from actually making progress. And so I had to reevaluate everything I thought about money and debt. And I was like, you know what? I don't think there is such a thing as good debt. At least if it makes me feel this way, it's not good for me. Yeah. And, you know, there's some people that have a higher risk tolerance and that doesn't bother them. For me, it felt like it was eating me alive. And, you know, every time I got paid, I felt like I owed someone else money, like it's just taken away. And so, you know, the first part was really about focusing on mindset, committing to a big goal. [00:18:04][37.3]

Melanie: [00:18:05] The first step is really about knowing your numbers. And this is often the most painful part of the journey, because a lot of people think they know how much debt they have, but they probably don't really know until they look at the numbers and they're like, oh, yeah. And I have a funny anecdote in the book where I think a month or two after graduating from NYU, I was like, OK, I need to get my finances together. I need to start paying off my debt. And I created a Mint.com account and I synched up all of my accounts and everything. And that was where I saw, you know, in black and white that I owed sixty eight thousand dollars. And I just felt so anxious. I felt like someone had punched me in the stomach. And literally two days later, I just deleted the account. [00:18:50][44.9]

Karen: [00:18:51] Yeah, I think that gets people caught up or it stops us. Right, because we're like, well if I don't know the number then it's not that bad. [00:18:59][7.7]

Melanie: [00:18:59] Yeah, exactly. Like in in my book, I actually describe paying off debt as a similar journey to the five stages of grief. And so, you know, the first stage is denial. And I was definitely in denial. I was like, nope, not going to look at that number. And, you know, like anybody knows, denial, you know, eventually comes for you, the truth eventually comes for you. And so that really happened to me almost six months later when I had that realization that I can't afford to live in New York and pay my student loans. And I had to make a choice. And that was when I realized that my student loans are affecting my life choices, like I want to continue living in New York, but it doesn't feel financially responsible. And because I do feel so bad about my debt, like it doesn't feel like the right decision for me. [00:19:47][48.2]

Melanie: [00:19:48] And so that was when I really understood that I have to pay this back. And so obviously, you know, knowing the numbers is super important and then really taking a look at your income and expenses. Like, what's actually hitting your bank account every month, you know, a lot of people tend to know their gross salary like, oh, I make fifty thousand dollars. But what's actually hitting your account after taxes, after deductions, after everything? Because that's that's the number that we need to be working with, is actually how much is hitting your account and then looking at your expenses, like where is your money really going? We often think we know where it's going, but then if you track it for 30 days, you might be surprised. And, you know, I think that's really important to figure out how much wiggle room you have to pay your debt, because the most basic concept of actually getting out of debt is paying more than the minimum. [00:20:37][49.2]

Melanie: [00:20:38] You know, I mentioned for the first five years of my debt repayment when I only had my undergrad loans, I'd just pay the minimum because it said minimum payment. I thought, OK, that's what I pay, is just treat it like a bill and just, you know, whatever. But then once I graduated from NYU and had tripled my debt, I realized if I just pay the minimum, it's going to take me so long to get out of debt. And more importantly, it's going to cost me so much money and interest because I had actually calculated my daily interest that was accruing and it was about 11 dollars per day. And when I realized that I was paying three hundred dollars a month in interest, I just felt like. That is so much money, and I kept thinking, like that could be a flight from New York to L.A., that could be a really fancy dinner, like a Michelin star restaurant. That could be like some amazing concert like that could be so many things. And it just it made me so angry. But luckily, I was able to fuel that anger into the debt payoff. [00:21:39][61.2]

Sean: [00:21:41] That's great. [00:21:41][0.2]

Karen: [00:21:42] Yeah, that doesn't happen for everyone. That that can be crippling. [00:21:45][3.5]

Melanie: [00:21:46] Totally. Yeah. [00:21:46][0.6]

Sean: [00:21:47] Yeah, yeah. Speaking of it, as we all know, the effects of debt can be incredibly crippling and can alter someone's financial and mental stability. So how did you start to work with other people about that emotional impact of debt? [00:22:02][14.9]

Melanie: [00:22:02] So I totally felt alone in all of this when I started my blog, because, like I said, I was reading other personal finance blogs and I loved it. And they had wonderful tips and great stories, but no one was really addressing this. And so when I was vulnerable and open on my blog, I just felt so scared and like I'm exposing myself. But I knew that it was important story to share. And then once I was open, I kept getting so many comments and so many emails, like I feel the same way, like I feel so anxious about my debt. I feel so depressed about my debt, to the point where actually about a year in, people were starting to Google. I want to kill myself because of debt, which was so harrowing. [00:22:43][40.5]

Melanie: [00:22:44] And, you know, I ended up writing a blog post as if I were writing to that person, you know, saying debt is not a death sentence and, you know, you are not alone and you are not a loan, and really trying to harp on that fact that, you know, it's not worth it. And of course, ironically, since I wrote that blog post, then I started getting more and more search traffic for that very term. And it was really at that point, I realized that the mental health and debt relationship is much greater than any of us realize. And that's really what has informed my recent work with MentalHealthAndWealth.com and my show, the Mental Health Health Podcast, and I really consider what I'm doing now is kind of the sister site to Dear Debt, because everything that I had done for those five years just came to a boiling point that this is a much greater issue than I had even anticipated. And so I'm always trying to work with people on what are some solutions financially as well as mental health wise to get you in a better place. [00:23:46][62.7]

Sean: [00:23:47] Really wonderful. And I like how, you know, not only were you able to help others through that process, but as we know now, it helped you, you know, helping and giving to others and walking them through these things. I can see how therapeutic that might be for you while you're going through this journey as well. [00:24:03][15.6]

Melanie: [00:24:04] Yeah, it's creates a wonderful sense of community. And, you know, I think any time that we can feel like we're not alone, like what I've learned throughout this journey is that everyone just thinks they're so alone. And then it just takes one person to share this kind of taboo topic. And then people come out of the woodwork saying, you know, I felt the same way. And, you know, for the past couple of years, I've actually organized a suicide prevention blog tour, which is where I've gotten about 30, 40 of my personal finance blogger friends to write about this very topic for September, which is Suicide Prevention Awareness Month. [00:24:40][36.3]

Melanie: [00:24:41] And that was also fascinating, too, because these are bloggers that don't necessarily write about this on a regular basis, but they decided to write about it for the month of September because of this campaign. That was so fascinating, too, because I kept hearing from people like, number one: oh, my gosh. So many readers are reaching out to me about this topic. Like they're saying, it's so helpful and they feel the same way. Or I would hear from bloggers that I feel the same way, but no one knows, or actually my brother died by suicide because of financial issues or my neighbor did the same thing. And all of these stories just kept coming out of the woodwork. And that's when I just realized, like, this touches everybody in some kind of way. [00:25:24][43.2]

Sean: [00:25:25] Yeah, for sure. And I love that. That's one of our biggest goals as well with this podcast. And everything else we're doing is trying to have those conversations and inspire people in that way and help them understand that they're not alone. So we really love that. And why do you think it is challenging for so many people to talk about those emotional and mental impacts of debt? [00:25:44][19.1]

Melanie: [00:25:45] I think it's hard to talk about the emotional relationship to debt because we have this idea of like extreme personal responsibility without really looking at the systemic issues that are also causing some of the problems. And what I mean by that is like people think like, oh, well, you took out a private loan and a fancy school. That's your problem, deal with it. And it's like, yeah, I totally get it. Like, I'll admit, I signed the promissory note. I knew what I was getting into. Like, I get that to an extent. But then when we zone out a little bit or zoom out a little bit, rather, you know, wages have been stagnant for about 30 years. Health care has been incredibly expensive. School has been incredibly expensive. Child care is incredibly expensive. The financial cards are stacked against us in so many ways that we're not really even acknowledging and people aren't looking at the systemic issues that are causing a lot of us to be in a financial precarious position. [00:26:47][61.5]

Melanie: [00:26:47] And, you know, obviously, I admit that I took on those loans myself. But then when you think about it, it's like, why should school be 50,000 dollars a year? Yeah, you know, we're not looking at that. And I think people feel a lot of shame because they think that it's all their fault. They feel like they made a mistake, especially if it's something like credit card debt or maybe they were overspending. You know, people don't want to admit that it was their own doing or that it was their fault when it's like we don't know what issues are going on in their life. And it's really hard to to talk about that, especially because the weight of debt feels so crushing. And like I said to me, the first stage is denial. So they might just be in denial and not even want to talk about it. [00:27:32][44.3]

Sean: [00:27:32] And not to mention the interest rates for those student loans, the predatory practices behind them. And like you mentioned, credit card debt. Those interest rates are insane, too. And, you know, you never know. Like you said, it might have been an emergency for a family member themselves, that maybe they had to get into that debt, like you said, because they had no other choice in that moment. So we shouldn't jump to those conclusions. And but then it can also be, like you said-. [00:27:56][24.0]

Karen: [00:27:56] A lack of education. [00:27:57][0.7]

Sean: [00:27:58] Yeah, yeah. Exactly. [00:27:59][0.6]

Karen: [00:28:00] Yeah, for sure. And it seems common practice for everyone just to take out a student loan here and then go to college and you think, OK, everything's going to be fine afterward. And when it's not, there's a sense of shame or sense of failure. And then all of that snowballs. Right. The three hundred dollars you're throwing in the trash and then you miss a bill and you have a late fee, all the things that happen. [00:28:23][23.7]

McKenna: [00:28:24] Yeah. And I think that, too, when you're promised that if you sign on to this loan and go to this prestigious university, that you will then get a job after that will easily pay off your loans because you have all of this support and you obviously are driven. And that's not the case necessarily like you were saying. And I think a lot of people are struggling with that right now, too, who have graduated and are like, OK, no one's hiring. [00:28:54][30.2]

Melanie: [00:28:55] Yeah, I think millennials were sold this kind of bill of like go to school, work hard and you'll get a great job and it'll all work out. And as we saw with the 2008 recession, then also what we're dealing with now, that is just absolutely not the case. And, you know, there isn't really an education about student loans. Like when I was 17, my dad was like, here, sign this paperwork. You know, if you want to go to college. I was like, OK. Like, I didn't really know what I was getting into. I just knew that I wanted to go to college. I had to take out loans. And I didn't even know that my loans were accruing interest while I was in school because I thought I had borrowed eighteen thousand. And then when I graduated it was twenty three thousand and I was like, wait. And I was like, oh my gosh, this is how interest works. And then I- [00:29:45][49.4]

Karen: [00:29:46] Learned, like, thrown in the deep end. [00:29:48][2.0]

Melanie: [00:29:48] I know, you're like, ah! And then the graduate plus loans, as Sean was saying, that high interest rates there were seven point nine and six point eight percent interest at that time, and that was about 50 grand, which is why it was costing me so much money per day and interest. And you you kind of have to learn the hard way and. You know, the costs of going to school has not kept up with, you know, the wages at all. [00:30:13][25.1]

Karen: [00:31:28] So as we just mentioned, education is such a big part of any lifestyle change. So what are some steps that one might take when tackling debt? [00:31:36][8.2]

Melanie: [00:31:37] I think it's important to understand your rights and understand the terms of your loan, so like I mentioned earlier, really understanding how much you owe down to the penny. What is your monthly payment? What are your interest rates and what are you and what is your repayment term? How long do you have to pay back this debt? And I think it's important to start to do that math of, you know, your debt and then also figuring out a strategy that works for you. So, you know, there's common strategies like the debt avalanche and the debt snowball, which the debt snowball method really focuses on throwing your extra money towards the smallest balance. And the debt avalanche focuses on throwing your extra money towards the highest interest debt. [00:32:23][46.3]

Melanie: [00:32:24] And I did the highest interest debt, you know, avalanche when I was paying off my debt because, you know, I had so much money at seven point nine percent interest, and six point eight percent interest. And like I said, I was so angry when I realized I was paying eleven dollars per day and interest. And so that was my strategy. I actually also added two additional strategies in my book, one that says if there's a debt that makes you angry, like, you know, divorce debt or debt from an ex, pay that off first or, you know, or if there's a debt that keeps you up at night and will give you peace of mind if you pay it off, like maybe you owe your parents money or your best friend and it will just make you feel better if you can pay that off first and do that because debt's emotional and- [00:33:11][46.7]

Karen: [00:33:11] The psychological method. [00:33:12][1.0]

Melanie: [00:33:13] Yeah, I definitely think, you know, if you have a debt that really makes you angry or a debt that keeps you up at night, pay that off first. Because once you do that, then you'll be able to breathe a little bit easier and focus on the rest. [00:33:22][9.8]

Sean: [00:33:23] I love that it's like divide and conquer, but with a really good intention behind it. [00:33:27][3.5]

Melanie: [00:33:28] Yeah, exactly. [00:33:28][0.5]

Karen: [00:33:29] What are some support systems that are in place for those not sure where to start? [00:33:33][3.4]

Melanie: [00:33:33] Yeah, I think there are so many blogs right now, like since I started eight years ago, that has been an influx of blogs. You can literally Google personal finance blogs. You can find a bunch on Twitter. Actually, Instagram has a lot of what I'm understanding is called, quote, micro blogs where people aren't even having websites anymore, but people are kind of sharing their debt stories on Instagram and having like little microblog. So if you look up the hashtag #DebtFreeCommunity there's a whole debt free community of Instagram, people kind of sharing their stories of getting out out of debt and what they're doing. And that's a really great community as well. I think this isn't totally standard advice, but actually there's something called Debtors Anonymous, so similar to other 12 step programs. So if your problem is overspending, you chronically find yourself in debt. That could be a good resource as well. [00:34:26][53.1]

Sean: [00:34:28] That's a really cool idea. [00:34:29][1.4]

Karen: [00:34:30] Yeah, I love that. What are the steps that you took that changed the trajectory? Was there a point in your process or a point in your debt repayment plan when you started feeling like you were really making an impact and you could breathe a bit easier? [00:34:45][15.4]

Melanie: [00:34:46] Yeah, so I'll be completely transparent. And yes, it was when I started to make more money. And so, you know, really, there are only two ways to pay off debt, spend less, earn more. And a lot of people get really inspired by frugality and cutting back and having coupons. But for someone like me who was already a minimalist, who really didn't spend that much money, like I hit that frugality plateau pretty quickly, and I was like, OK, I can't cut back anymore. Like, I'm living in a studio apartment with my partner. I don't have a car. I don't have health insurance. Like I walk and bike everywhere. Like there's really nowhere else for me to cut back right now. And so I realized the only thing that I could do was earn more like that was my only option. And so I started hustling like crazy. [00:35:35][48.4]

Melanie: [00:35:35] I was working as a brand ambassador. I helped plan events for people's birthday parties. I pet sat, I worked an overnight rave, once, selling water bottles like I did pretty much any gig that I can find that was legal on Craigslist and TaskRabbit. And, you know, there's a bunch more sites now these days that you can find those types of gigs on as well. And, you know, I was just working all of the time. And then once the blog started, I realized that other bloggers were making money as freelance writers. And, you know, at that time I was out and about doing all of these weird side hustle that I was just describing. And I thought, man, it would be really nice if I could just stay at home and write and make money. And, you know, I thought, well, I have a master's degree. I think I can write and I have this whole blog as a portfolio. Let me start pushing people and see if I can make it work. [00:36:26][50.7]

Melanie: [00:36:26] And I got my first article making twenty five dollars, and it was it was exciting. And, you know, I got it up to 75 and then one hundred and then. I started realizing that banks and fintech companies could pay more, you know, hundreds of dollars for an article, and then that side hustle really grew. And that's actually what I do now as a full time job, is I'm a freelance writer in the finance space. And, you know, I was able to essentially double my income from 30000 to 60000 once I became self-employed. And so obviously, self employment isn't something for everybody. But for someone like me who is stuck in the nonprofit Low Pay Trap, I was able to make an income that I'm pretty sure I would never be able to make in the nonprofit space. [00:37:12][45.5]

Melanie: [00:37:12] You know, at that time I rent was four hundred dollars because I split in half with my then partner and, you know, to double my income from 30 to 60 thousand. And I kept my lifestyle the same. That is really what made the difference in me being able to make progress. Like suddenly I was putting 2000 towards debt, three thousand towards debt. Like that's a crazy amount of money to be put in towards debt every month. But I was able to do it because my rent was so low and because I was able to double my income. So I know a lot of people say, like, what's the trick to pay off debt? And I have to say for me, it really was earning more. Like depending on your situation, it could be different. But for me, unequivocally, it was about earning more through side hustling and self employment. [00:37:56][43.9]

Karen: [00:37:58] I can hear the pride in your voice and also, like, really excited for all the for how creative you got about it. So you dedicate a chapter to starting a person's journey out of debt. And I think that's a really important place to kind of reflect and readjust and think about the future. Why is that chapter so important? [00:38:22][24.5]

Melanie: [00:38:24] I think it's important to think about your debt journey and kind of where you plan to go and what your life is going to look like in the future. You know, debt repayment is not going to be motivating or important to you if you don't understand why you actually want to get out of debt. So for me, I mean, I was self-employed when I was paying off debt, but I was like, I want to stay self-employed. And, you know, I wanted to move back to L.A. so that they like to be honest, I did not like Portland, Oregon. It was too rainy for me. It was too white, too small. I'm a city girl. I was like, yeah, but it was much more affordable. And so I made that choice to stay in Portland until I paid off the debt, even though I hated it because I knew it would be a much more financially viable situation. [00:39:13][49.2]

Melanie: [00:39:13] And so what I did was I created a debt free dream list to keep myself motivated. And so I had I was like, what am I going to be doing when I'm debt free? And I was like, I'm going to move back to L.A. I'm going to take my mom to Italy because she's never been to Europe. I'm going to get cats because I really love cats. But I know they're an extra expense and I can't have them right now. And I'm happy to say that I've been able to achieve all of those things, like within a couple of years of paying off debt. And it's been so fantastic. And, you know, when I was struggling with debt fatigue and paying off debt, I kept thinking, my life isn't going to always be like this. I'm struggling and sacrificing now so that later I do not have to. And I kept thinking, like, I'd rather struggle as a young person or a younger person than an older person because we're all getting older. God willing. And it's not going to be more fun to, like, cut back and pay off debt as I get older. And I was like, if I take care of this now, I will be able to enjoy life later. And I have been. [00:40:20][66.2]

Melanie: [00:40:20] And so I think it's really important for people to create their own debt free dream list to really understand their why, you know, is your why the fact that you want to quit your job or take care of your children or retire early or whatever your big dream is like, you have to understand that. And you put posts on the fridge, put posters on your debit card and your credit card, create a Pinterest board with what you think your life is going to look like afterwards, because you have to understand and commit to that vision so that you can actually start the debt free journey because you will get debt fatigue. Like a lot of my blogger friends, you know, they were paying off their debt in six months to a year. And probably midway through I was like, I have to make four figure payments for years, not not six months, but years. And making four figure a thousand plus dollar payments for years is exhausting and draining and wild. And so you're bound to have debt fatigue and like want to give up. I totally get that. And that's why I also recommend having mini rewards in your debt payoff process, because you just have to to try to stay on course and also just commit to that vision of your debt free dream life. [00:41:36][76.0]

Sean: [00:41:37] So wonderful, I think that's so motivational. I love all those ideas. [00:41:40][3.2]

Karen: [00:41:40] Yeah, it really is. I know I love all those ideas for all kinds of goals. Right. Having a dream board and giving yourself mini rewards. [00:41:49][8.6]

Melanie: [00:41:49] Yeah, yeah, yeah. [00:41:52][2.3]

McKenna: [00:41:52] And I love the idea of my wife isn't going to look like this forever. I think a lot of people need to remember that right now. It's challenging and we're all exhausted. We have pandemic fatigue. We're just over it. But I think that's a great mindset to have to kind of keep yourself looking at the bigger picture for sure. Of course, you have your wonderful book and your blog and all of these incredible resources. How can people kind of engage with all of the resources that you have and any other resources that kind of help do you on your journey? [00:42:28][35.7]

Melanie: [00:42:28] Yeah, so people can find me at DearDebt.com. Also the book Dear Debt, as you mentioned, I have my personal site, MelanieLockert.com, and then I also have a Women and Money event that's currently on pause, which is LolaRetreat.com. And then where I'm hanging out mostly these days is MentalHealthAndWealth.com And the Mental Health and Wealth Show podcast. We actually have mental health and wealth hangouts every other Thursday at five p.m. Pacific that are free, where people can just come and talk about mental health and wealth in a safe space. And that's been really fun to kind of grow. People can find me at Melanie Lockert on Twitter and Instagram. [00:43:08][39.6]

Melanie: [00:43:09] And, you know, really what helped me get through my journey is a bunch of other personal finance blogs, because it was a wonderful to read these stories from people, because to be honest, I never had met anyone that had actually paid off debt before. You know, it's like I don't know anyone that's actually ever paid off debt. So even just knowing that it was possible, you know, through these blogs was wonderful. You know, I think there's a blog called Budgets are Sexy, which is really fantastic. You know, there's the Financial Diet, there's the Budget Mom, you know, finding resources on #DebtFreeCommunity. Also Broke Millennial, she has wonderful books. She has three different books. And she just came out with one called Broke Millennial Talks Money. And it's all about having awkward financial conversations. Such a helpful guide. [00:43:57][48.3]

Melanie: [00:43:58] And yeah, I think, you know, just take advantage of all of the resources and really find what works for you. And what I mean by that is like maybe you're going to learn best with the Instagram community. Maybe you like blogs, maybe you like books, maybe like YouTube videos. Figure out which way you prefer to learn. And, you know, there are definitely resources out there. [00:44:17][18.9]

McKenna: [00:44:18] That's great advice. Yeah, I think everyone can be thankful for the Internet in that way where we've been able to connect with people and hear stories that we don't, because in our small communities we don't always talk about money. It's like you said, it's taboo, it's awkward and all of these things. So that's so great. [00:44:36][18.1]

Melanie: [00:44:37] Yeah. I just want to let you know people know who are in debt and who are deeply depressed, you know, just to remember that you are not your debt and you know, you don't have to view it as a mistake. You can just view it as something that happened and that it can be temporary if you want it to be. You know, it is possible to get out of debt and also don't compare your journey to anyone else's because, you know, it can be really frustrating to read all of these headlines. Like, I know they're supposed to be inspirational, but when you read like someone paid a hundred thousand dollars and six months later, you can feel really bad and feel like, well, it's going to take me like ten years to do that. So don't compare yourself to anybody else. It's your journey and, you know, progress and being consistent. Those are the most important things. [00:45:24][47.5]

McKenna: [00:45:25] Hmm. Yeah, I love that. And giving yourself some grace and... Yeah, that's great advice. Melanie, what do you read or listen to or do right now that lifts your spirits? [00:45:37][12.1]

Melanie: [00:45:38] Yeah. So I'm actually bingeing in this podcast called Design Your Dream Life by Natalie Bacon. Actually, it's funny. She was a personal finance blogger with me, like back in the day. So now she's doing more like life coaching stuff, which I really love her episodes. And to lift my spirits, I'm honestly all about like reengineering your mood with music. I am obsessed with music. And so, you know, I'll put on some Britney Spears or some Beyoncé or Walking on Sunshine. You know, whatever song is going to lift my spirits and make me feel good. I also think, you know, looking at comedy videos or like I'm a fan of falling down Twitter rabbit holes and like looking at and Bernie Memes. Yeah, I like anything that I can just, like, make me laugh or lift my spirits for a moment. [00:46:28][50.0]

McKenna: [00:46:29] Yeah. I love that so much. And we actually have a playlist called 30 Second Dance Party. We all love it, like if if you don't have time in your day, but you're just really not in a good headspace, we love a 30 second dance party. So we have all of our favorite songs in there. So you have to send us some of your favorites and we'll add them. [00:46:47][18.2]

Melanie: [00:46:48] Oh my gosh, yeah, I love that off. I'll have to check that out. [00:46:50][1.3]

Karen: [00:46:50] Like, yeah, walking on sunshine is for sure on there. And Britney and Beyonce. [00:46:54][3.9]

Melanie: [00:46:55] Yes, I love it. Dancing is so therapeutic. [00:46:58][2.9]

McKenna: [00:46:59] Totally. This has been so wonderful. Melanie, thank you so much for coming on and chatting with us. [00:47:04][5.5]

Melanie: [00:47:05] Oh, thanks so much for having me. I'm really appreciative to share my story and new outlets and to new communities. [00:47:10][5.0]

Karen: [00:47:11] Yeah. Thank you. Have the best Day. [00:47:13][1.9]

Melanie: [00:47:13] Yeah, you guys too. [00:47:13][0.0]

Sean: [00:47:14] Take care. [00:47:14][0.2]

Melanie: [00:47:14] Okay. Bye! [00:47:15][0.2]

McKenna: [00:47:15] Bye. [00:47:15][0.0]

McKenna: [00:47:18] Thank you, everyone, for listening to this episode of Health: It's Personal. Follow us wherever you get your podcasts for bonus episodes and new release every Wednesday. The Health It's Personal podcast is produced by me, McKenna Uhde and hosted with the Phronesis Health Initiative team Karen Shively and Sean Tingle. Special thanks to portrait artist Alexander, musical contributor Bernie Ramke and to our guests and experts for their kindness and bravery in sharing their stories each week. [00:47:45][27.3]

Karen: [00:47:46] Please listen, subscribe, engage and send us topics we can explore that would help you on your journey. [00:47:50][4.4]

Sean: [00:47:54] Because health, it's personal. [00:47:54][0.0]

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