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Debt Happened to Me – Here’s What I Learned on the Way Out

By David Bakke Date September 14, 2021

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I am working with Marcus by Goldman Sachs to help spread the word about Marcus loans. Debt can happen to anyone. I’m living proof. My debt story began when I got my first credit card. For various reasons, including fluctuating interest rates following the interest-free introductory period and multiple late payments that incurred fees and penalty interest, I’d racked up $30,000 in credit card debt within three years. I also owed another $10,000 to my parents, who generously paid for my college education. That’s right: within three years of getting my first credit card, I was $40,000 in debt.
Motley Fool Stock Advisor recommendations have an average return of 397%. For $79 (or just $1.52 per week), join more than 1 million members and don't miss their upcoming stock picks. 30 day money-back guarantee. Sign Up Now Once my parents caught wind of my dire financial straits, they presented me with an ultimatum: pay off your credit card debt, or else. Practically overnight, I refocused on a single financial goal: paying off debt as aggressively as possible. But that ordeal wasn’t my only financial challenge to date. I’ve also struggled with the hefty (though, of course, joyous) financial burden of welcoming children into the world and supporting them as they grow, as well as a painful divorce that cost far more than expected. Both added to my credit card woes. Below, I’ll explain each trial in more detail. I’ll also explain what I would have done had I had a powerful solution at my disposal: a loan from Marcus by Goldman Sachs. Marcus by Goldman Sachs offers an accessible alternative to high-interest, variable-rate credit card debt with a fixed-rate, no-fee personal loan. At Marcus.com, creditworthy borrowers with FICO scores above 660 can access loan amounts from $3,500 up to $30,000, with terms ranging from two to six years. Importantly, Marcus by Goldman Sachsprovides you with tools customized to your needs, including its Savings Calculator, an online savings calculator on the Marcus website which allows you to enter your credit card debt and see what you could save without affecting your credit score. Marcus wasn’t available during my years-long struggle with credit card debt, but it’s absolutely an option for regular people who find themselves in similar situations today. First, let’s look at how I got into debt. We’ll then discuss how a personal loan from Marcus could have helped me – and could now help you.

$40 000 in 3 Years

As my credit card debt (and monthly payments) mounted, I found it increasingly difficult to meet my basic financial obligations. For instance, to conserve what little cash I had left, I: Stopped filling up my gas tank, instead pumping just a gallon or two at a timeAte cheaper, less healthy food – lots of low-cost fast food, ramen noodles, mac and cheese, and the likeStopped going out, and therefore saw my friends a great deal lessDramatically cut back on entertainment – no more cable or movies out (this was pre-Netflix) Even worse, I felt bad. (And not just because I ate Ramen and fast food all the time.) My debt was a bright, glaring stigma, a crushing weight on my psyche. I walked around convinced that I’d let myself and my family down. That’s a big part of the reason I hid my debts for so long and allowed them to spiral so far out of control. I couldn’t bear the thought of my parents’ deep disappointment when I finally told them about my situation. Of course, they eventually found out on their own. And were they ever disappointed. At their insistence, I made the radical decision to focus every ounce of financial firepower on paying down my debts. With a stable job that paid reasonably well, I was able to pay well above the monthly minimums and work my way out of debt within four years. After years of struggling, I was finally able to overcome the revolving cycle of credit card debt. And if there’s one thing I’ve learned over the years it’s that my financial struggles were in no way unique.

A Dear Child

Unfortunately, that wasn’t the end of my tangles with debt. A few years later, I welcomed my first child into the world. Emotionally, it was indescribable. Financially, it was a challenge that I simply wasn’t prepared to tackle. Specifically, I was shocked to learn just how many unexpected expenses kids create. When my little one was barely old enough to crawl, an – ahem – accident in the back seat of the family car did a shocking amount of damage to the vehicle’s upholstery. After a couple weeks of ad hoc fixes, I gave up and had the whole thing reupholstered, charging several hundred dollars (on a very tight budget) to my credit card. That’s just one example. The first few years saw a slew of similar expenses, resulting in persistent, low amounts of credit card debt that I couldn’t shake. In talking with other parents, I count myself fortunate. My kid threw up inside my car. That’s far less expensive (not to mention nerve-wracking) than a 16-year-old smashing up the family wagon on his inaugural ride. According to Angie’s List, replacing a damaged transmission can easily cost $3,000. That’s so often how debt happens – not because of a conscious choice to overspend, or even budgetary neglect. Debt can happen to anybody. It’s nothing to be ashamed of and you’re certainly not alone.

Saying Goodbye the Costly Way

Recently, I faced a new and unfamiliar challenge: divorce. The divorce was about much more than finances, of course. But the financial aspect of the experience is one that, in retrospect, I was not prepared for. I had no idea how much divorces actually cost, nor had I thought through the long-term financial impacts. I’m not going to go into too much detail about the particulars of my split. However, I can say in general terms what divorcing couples can expect on the financial front. According to Nolo, the average cost of a U.S. divorce exceeds $15,000. And that’s just the average. The more complicated the divorce, the more expensive it’s likely to be. Every major asset or point of contention adds to the case’s time and complexity, and therefore, the amount of work that needs to be done to resolve it successfully. A typical divorce involves various upfront and ongoing costs, such as alimony, child support, claims after the fact, and of course court and attorney fees. The last category can be shockingly expensive: per Nolo, $250 per hour is a rough average for competent divorce attorneys. Unfortunately, due to budgetary constraints, I had to pay the balance of my attorney fees with a credit card, dramatically increasing my debt load.

An Easier Way

A loan from Marcus by Goldman Sachs would have been a huge help in all of these situations. When you’re able to choose your monthly payment date, you have more control over your monthly budget, especially when you want to align your payment with when you receive your paycheck. Had I been able to choose my monthly payment date and enroll in auto-pay, I’d have felt a lot more secure in my cash flow – and saved a bundle on unnecessary fees. I also wouldn’t have felt like my only viable debt-busting option was a new credit card account with a zero-interest balance transfer promotional period. That’s a potentially risky strategy, as all zero-interest promotions end sooner or later, and most credit cards don’t allow you to choose your monthly statement due date or reward your diligence by allowing you to defer one monthly payment after 12 consecutive months of on-time payments the way Marcus does. When I first heard about Marcus by Goldman Sachs, I was pleased to discover that it understands the extent to which consumers are disgruntled by pre-assigned payment dates and unpredictable interest rates. That’s why it enables customers to choose their monthly payment date and a payment option designed to fit their budget. If my debt struggles sound familiar to you, I’d recommend taking a closer look at this strategy. Compared with my all-out assault on debt, it could save you untold emotional and financial stress.

Final Word

My financial story is not unique. Far from it. Millions of young Americans’ paths follow a similar trajectory. What’s personal about my story isn’t how debt happened to me. It’s how I got out – through a combination of discipline, creativity, and perseverance. I managed to overcome my debts, but I still wish I’d had additional resources and support at my disposal. If you’re facing high-interest credit card debt, do yourself a favor and look into your loan options at Marcus.com. Those who qualify for a loan from Marcus by Goldman Sachs enjoy fixed interest rates, predictable and flexible monthly payment options, and no hidden fees, ever. Can you say the same for your credit card? Get Out of Debt Borrow Money TwitterFacebookPinterestLinkedInEmail

David Bakke

David started his own personal finance blog, YourFinances101, in June of 2009 and published his first book on ways to save more and spend less called "Don't Be A Mule..." Since then he has been a regular contributor for Money Crashers. He lives just outside Atlanta, GA and most all of his free time is taken up by his amazing three year old son, Nicholas.

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