Digging Immediately Out of Debt

Editor’s Note: This article previously appeared in a different format as part of The Atlantic’s Notes section, retired in 2021.

This reader, a self-described “Financial Independence Obsessive,” has an impressive track record—but she’s still deeply worried about money:

Hello! Thank you for this reader series. I should be a classic poster child for upward mobility. I grew up in a working class/poor family, with my parents mostly working retail. They divorced and my mother remarried, creating a large blended family of five children. I grew up acutely aware that my family didn’t make much money, which inspired a lot of anxiety about money and “passing” for middle class.

My family was never homeless, but we were under-housed; we were never hungry, but we relied on free school lunches, WIC, and food stamps. I started work cleaning motel rooms at 14 and saved half of every paycheck from my various part-time jobs until I graduated high school. Being a good student (I graduated valedictorian and earned some scholarship money), I thought that going to college would be an automatic ticket to financial security. Even with my savings, scholarships, and grants, I still accrued $40,000 in student loan debts.

I was fantastically lucky. Within a year I landed a job in my field, and I funneled about 2/3 of my take-home pay toward my loans. This was where the Mr. Money Mustache blog [previously noted here] helped a lot, as well as sharing expenses with my also-employed boyfriend who had similar financial goals. I was able to pay off my loans in about two years.

But ANY setback could have been disastrous, as I kept no emergency fund or savings while I was dumping all of my money into my loans. The specter of the debt was always there, but living like a poor college student or a working poor family wasn’t a change for me.

Now I’m student loan debt-free (I’ve never carried credit card debt), and last year I maxed out my 401(k), IRA, tithed 10%, and also saved about $10,000 in a Vanguard account at age 28. I’m certainly on track to retire before 40, barring disasters.

However, I never stop worrying about having enough money, and I also have immense guilt about my parents still being a few missed paychecks from being destitute. My parents are proud of my accomplishments, but also too proud to accept any substantial gifts from me.

When my partner and I shared that we were buying a house (with the full 20% down—we also put double payments toward the principle for the first year), my renter father was noticeably uncomfortable, and again I felt massive guilt. He hadn’t been able to afford a real bed until I turned 18 and he stopped paying child support, and that haunts me still.

I also have friends my age who weren’t as lucky as I was to land a well-paying job, so I feel anxiety about discussing any money matters at all with anyone. By all accounts I’m doing well, but I don’t think I’ll ever feel like it, or feel good about it unless I am able to give it away.

In contrast, reader Gwen started with a lot more student debt and still has a long way to go:

Thank you for your focus on money lately. Money is paralyzing, but I think opening up about it recently has helped me feel less panicky. I’m 27, paying off over $125k in student loan debt (all from undergrad), pay the same amount in rent as I do in student loans every month (about $800), have $0 in savings, and $2500 in credit card debt.

What hit me most a few months ago was that I’d been paying over $800 a month for over four years toward the student loans and had just gotten to the point where my balance is equal to the principal of the loans. I’ve paid down over half of my credit card debt in the last four months by spending as minimally as possible and not contributing to my 401k, but for now the student loan situation remains the same.

I’d love to get married (and have a wedding) or go to grad school, but I find myself delaying both and adjusting expectations because I have such crushing guilt every time I even think about spending more than $50 on something. I feel like I made the wrong choice about undergrad; I didn’t know I’d need to take on debt going into it, but once I did, I didn’t transfer or mitigate the situation because I didn’t understand the implications of student loan debt. And, like many others, I believed that when I graduated with whatever liberal arts major I chose, I’d be able to find a great job and pay off my debt easily.

I am so ashamed and guilty and resentful when I think about 18-year-old me signing away my paychecks from my 20s and 30s for  four years at a private school in New York City and a psychology major.

We are a financially illiterate country, sold the idea that you deserve a house, a new car, to go to whatever college you want, and to take any vacation you want. As sad as it sounds, racking myself with guilt every time I spend money has helped me be more frugal.