When someone realizes they have a spending problem, getting to the root of it isn’t often the first step they take. After all, a spending problem is typically uncovered when you start having trouble paying bills.
When Jon Dulin developed a spending problem, he decided the only way out was to dig deep and find out why he was overspending. Now he’s debt-free, in control of his money, and happier than ever. Find out how he did it.
First love, first credit card, and a mound of debt
When Jon was a freshman in college, he got his first credit card. And for a while, he used it well.
Jon would use the card to buy small items, then pay off the card before the end of the month to avoid accruing interest. But then sophomore year happened — along with his first love.
In an effort to show his girlfriend how he felt about her, Jon would regularly take her on dates and buy her things he couldn’t afford. By the time summer rolled around, he was $2,500 in credit card debt.
He paid off the debt with his summer job, but he accrued more debt through the end of college — and the end of his relationship. Even though Jon didn’t graduate with student loans, he still ended up turning his tassel with $4,500 in credit card debt.
Graduating with debt and into a recession
As if graduating with debt isn’t hard enough, Jon also graduated during the 2001 recession. Although Jon thought his degree would lead him to a six-figure salary, he had a hard time finding a job after college.
Unfortunately for Jon, his spending habit turned into an outlet for depression after college. He continued to spend money to feel good, even if it was only a temporary fix. When the positive feeling he got from shopping went away, he would have to spend again to feel better.
Two years of this cycle shot Jon’s credit card debt up to $10,185.
Taking a hard look at spending
Then one day in 2003, Jon went to the mall. As he was getting ready to buy a jacket, a light bulb moment struck. He asked himself point-blank: Why am I doing this?
Suddenly, Jon realized he had a problem with spending money; he was spending to feel better. So he drove home and began the hard process of dealing with the problem and its root cause.
The first thing Jon did when he got home was dump all of the clothes and electronics he’d bought over the years on his bed. He took a picture of the pile and shoved it into his wallet.
From then on, Jon would use the photo to remind himself to think twice before spending.
Then, Jon did what many people are not brave enough to do. He started a process of self-reflection that made him see that his problem with spending money was rooted in his low self-esteem.
He read books on self-improvement, saw a therapist, and confessed everything to his parents. Much to his relief, they were supportive and reminded him that there was no need to be embarrassed.
And with that, Jon got to work on his debt.
A few missteps in debt repayment
Wouldn’t it be great if the moment you decide to solve your problems, every effort you make to that end is met with success? Unfortunately, that’s not usually how things work out.
As Jon worked to pay down his credit card debt, he used balance transfer credit cards to lower his interest rate to zero so he could make faster progress. But balance transfer credit cards are tricky and can lead to more debt when mishandled. That’s exactly what happened to Jon.
Although he was able to pay off his high-interest credit cards with a balance transfer credit card, he didn’t completely stop spending. So he tried again until he got it right.
During this time, Jon’s career was looking up — and he capitalized on that wisely. When he finally found a full-time job, he didn’t quit his part-time job. Instead, he used the extra money from his part-time job to pay down his credit card debt.
By the time 2005 rolled around, Jon was officially credit card debt-free.
Moving on from his spending problem
In the process of paying off his debt and building his career, Jon realized he enjoyed blogging and wanted to help people like him with their finances. He was blogging on the side until 2013, when he was able to switch to doing it full-time.
Jon doesn’t spend money to prove his love in his relationship either. Instead, he and his wife are working on a larger financial goal together: an early retirement. They’re also striving to do work they love, not work they feel obligated to do to earn money.
How to conquer your spending problem
Think you might have a spending problem? Here are a few resources that could potentially help you get to the root of the issue so you can take control of your spending:
- Talk to a trained active listener at 7 Cups for free
- Use Zocdoc to find a therapist near you
- Reach out to a financial therapist through the Financial Therapy Association
Remember, the road to financial success is rarely straight and missteps can even happen to experts.
But by addressing his mental well-being first, Jon was able to create a debt payoff strategy that he could sustain. Once he paid off more than $10,000 of his credit card debt, he never let a problem with spending money get in his way again.
And that’s what happens when an issue is worked on at the root, not at the branch.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 6.23%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|