Financial Freedom Means Not Feeling Ashamed Anymore

Show Notes

• Guest: Katie Sanders
• Host: Adam Walker
• Publication Date: November 21, 2023

Highlights

2:03 | Katie explains how a lack of financial understanding coming out of college led to her racking up credit card debt for medical expenses.

4:16 | Katie talks about realizing she needed outside help for her debt problems.

5:48 | Adam and Katie talk about what she learned about money while working with MMI counselors.

7:55 | Katie shares why it was so important to get help and show her daughter that it's okay to talk about problems with money.

9:47 | Katie talks about how much freer she feels now that she's not trapped by credit card debt.

Episode Transcript

Adam Walker: Debt. We've all heard of it, most of us have it. Debt is an almost unavoidable reality of life. But what happens when it starts consuming life? The experts at Money Management International believe that financial challenges aren't meant to be faced alone. On this podcast, we hear stories of people's whose lives have been changed by MMI's role as their toughest coach and loudest cheerleader. Their stories are unique, personal, and inspiring. So stay tuned because we're sharing each guest's Long Story Short.

Their stories are unique, personal, and inspiring, so stay tuned because we're sharing each guest's long story short.

Today’s guest is Katie Sanders of Gansevoort, New York. A few years back, Katie was told about MMI by her credit union after she found herself in $30,000 of debt. After reaching out, Katie was relieved by MMI’s understanding and compassion towards her situation. Now, in just three years, through MMI, Katie has paid off $30,000.

Katie, welcome to the show. I'm so impressed with what you've done, with the fortitude it takes to accomplish that. But let's start with a little bit more about you. where do you live and what do you do?

Katie Sanders: Yeah, thanks so much. So I live in upstate New York, about an hour north of Albany, with my husband and my two year old daughter, and I'm an HR director, for a retail merchandising company out of Manhattan, and I've been in HR for about 13 years now.

Adam Walker: Oh, that's fantastic. All right. So you're dealing with humans all the time. Always good to deal with humans. So let's talk a little bit about your debt story. I understand it's unique in that it's not all consumer debt. There's a medical bill component to it. There's a consumer component to it. I'd love for you to just tell us a little bit more about that and sort of how you came to the point where you realized that you needed some outside help.

Katie Sanders: Yeah. So I, you know, it kind of came about because I think I didn't fully understand how insurance worked when I first graduated from college and while I was in college, too. And so. you know, going to the doctor and racking up medical bills, I was just paying them off with credit cards and then making the minimum payments as I was, you know, starting my career because I didn't have the extra money to do more and then the interest accrued. I really didn't understand, I think fully, how credit cards worked at the time too, and how that interest compiles.

So that sort of built up and then, you know, making the monthly payment... minimum monthlies and then realizing that I had. You know, so much more ahead of me that I felt like I was barely chipping away at it kind of made me realize, okay, I need to do something a little bit different, you know, and to approach this differently.

Adam Walker: And you mentioned before, too, that like, it was not just the medical debt, but also a little bit of kind of supplementing your income with the credit cards. I mean, could you talk a little bit about that? Maybe how you treated the credit cards then? Versus maybe how you consider them now?

Katie Sanders: Yeah. So back then, I mean, I feel like I was, really young and green and just starting my life and not understanding the impact of living beyond my means. And so I was, you know, maybe spending more on groceries than I should and just saying, well, I'll just put it on the credit card. Or, you know, buying something at target that I really wanted that, you know, I wasn't budgeting for. Just putting it on the credit card.

So, racking up bills that way, and then not really looking at them as, okay, now I have to pay that off. I have to use my income to pay that off. I was using it as an extension of my income. So now I'm looking at it. If I do use a credit card, which is rare, I'm looking at it as, okay, is this in the budget? Why am I using the credit card? Am I using it to get cash back? Am I using it to get some points that I can use in the future? There's like a purpose for using my credit card now.

Adam Walker: Got it. Okay. And was there like a specific point that you reached where you're like, Oh, I need some additional assistance here. Like what, was happening around that time?

Katie Sanders: Yeah, I was, I was in a new job and, you know, before I... I had just started out, so I hadn't been like promoted or anything.

I was the newest person on the team, not making a ton of money and realizing that I was struggling even to make the minimum payments on my credit cards. And it was right at a time in my life where I was starting to understand credit, and how late credit card payments... It really impacted my credit score and how that was going to impact, you know, other aspects of my life, like getting an apartment or getting a car and really starting out my life.

And it was all tying back to these credit cards. And I kind of realized like, okay, if I want to be able to do anything else. I have to get these in order first.

Adam Walker: Yeah, no, it's so smart. All right. So, so then you started working with MMI, since that time, it's about three years later, you've paid off $30,000 in debt, which is just amazing. I mean, for real, like that's just so exciting. and you did it with a personalized debt management plan. So I wonder if you could kind of talk about like, how did that, debt management plan help you see the path forward and sort of walk that path?

Katie Sanders: Yeah, when I got started with MMI, they really did a great job of showing me what it was going to look like year over year and what the whole process was going to look like start to finish.

Where I was going to be at the end versus where I was when I started. They were really transparent about, you know, all what the payments were going to look like, what that schedule was going to look like, so it was really easy for me to see a path forward. Whereas when I was just dealing with it on my own and the credit cards, it was there was no end in sight, really.

So, MMI did a really great job of explaining everything to me and showing me, you know, there is a light at the end of the tunnel, basically.

Adam Walker: Yeah, I mean, that's right. And I think just knowing he path you have to walk makes it so much easier to do it versus sort of never seeing the end coming. So then what... tell me like, what was the credit counseling experience like with MMI? And what would you say your biggest lesson was from that process?

Katie Sanders: I think my biggest lesson. So they really did a good job, I think, of teaching me a lot about how my credit usage impacts my credit score and how different things associated with credit cards impact the credit score differently.

So late payments and the amount of debt... your debt to credit ratio and how that impacts versus how late payments impact. So they really did a good job of just educating me on how it all ties back into your credit score because that's really what I was concerned about at that point was trying to start my life and needing a good credit score to do that.

So they really educated me on that piece. And I think my biggest takeaway was probably the debt to credit ratio, which I really didn't know anything about when I first started with MMI. And they did a really great job of educating me on, you know, you really want your debt to be at about 30%, your credit card usage to be under 30%... is like the goal as you're just starting out. I now try to keep everything under 10 percent because I feel like I reached my goal and now I've learned a lot and I can sort of apply more aggressive tactics to managing my credit cards.

Adam Walker: Yeah, I love that. All right, so it occurs to me that, you know, you had sort of, the life before, let's say the life before MMI, you know, you're using the credit card and swipe and not really thinking about it.

You've got the three years hero's journey of getting out of debt, which is, I mean, really like a profound experience, I think. And so I guess I wonder, like, are there any specific things that you learned during that journey? That you want to share with our audience or maybe even things that like you want to make sure you memorialize for your own.

I think you said you had a daughter. Is that right? That you want to memorialize for her as she's growing up thinking about these things.

Katie Sanders: Yeah, that's a good one. I think probably the biggest thing for me is just not... not feeling shame around having debt. I think that's the biggest thing, you know, people, you know, there are certain things that are taboo to talk about. But I think that if you talk about your debt and you share your experience, it's really important because it can help you to sort of process what you're going through, but it also can help other people like, to your point, you know, my daughter, I want her to know that, you know, how to manage your finances, but that if you get into a sticky situation where, you know, you didn't manage it as well as you could have. It's okay to talk about it. It's okay to ask for help. And it's okay to use your resources that are available to you.

Adam Walker: So we had the time before we had the hero's journey. Describe like how, what your relationship is with money now. Like, how do you think about it? How do you think about saving or spending or like any of that stuff?

Katie Sanders: Yeah, I think about it now more so in terms of like the long term, instead of just in the moment, this is what I have right now in my bank account, it's more so, okay, this is what I have, this is what I'm responsible for that this money is going to go towards, this is what's left over. I look at it more so in segments and dedicating that money to certain things, rather than being as frivolous as I was being with my money before and I think that's probably a lot of what it was.

I was being too frivolous with my money. So I think I have a lot more responsibility now, you know, obviously with a daughter and a mortgage and a marriage. So I think I am more responsible with my money now and using MMI really taught me how to do that, you know, partnering with them really showed me that, you know, you can get this under control.

It's not something you have to be ashamed of and once you get it under control, then you have a lot more freedom and flexibility to handle your finances the way you want to, right? So. before I kind of felt trapped by my credit cards. Then I kind of felt like almost in like a holding pattern while I was in the payment process with MMI because it was like, okay, I'm going to get this stuff taken care of and then I can start to look at what's next.

And then, so once I finished with MMI and paying everything off, which felt really great, it was like, okay, now I have this extra money available that I was putting towards my debt. Now we have to be responsible about what we do with that extra money. So I'm able to save a little bit. If I have a big expense that comes up that I absolutely have to use a credit card for something like that, you know, emergency type thing, I have the money set aside to pay it down.

You know what I mean? Instead of letting it get out of control. So I think I look at money a lot more responsibly now, and I dedicate it to certain things rather than just looking at it as something that I can throw around. Because I am not a Rockefeller by any means.

Adam Walker: I get that. I get it. So, so I wonder if, you know, as I, think about that process of paying off $30,000 in 3 years. I wonder if you could like describe to us some of the details of that. And here's what I mean. I feel like some listeners might be like, yeah, man, that's great. But she probably ate beans and rice for every single meal and never went on a vacation and never bought it and knew anything the entire time. And that's terrible. Like that's, I think, feel like that's maybe the perception. And I wonder, like, could you walk us through, like, is that real? is that what it was like? Or, like, kind of, kind of tell us what that journey felt like, if that makes sense.

Katie Sanders: Yeah, it definitely felt like that when I first signed up with the debt management plan. It felt like, okay, I'm never going to do anything fun again.

Because instead of it being, like, small chunks of money that I was dedicating to several credit cards. Like a minimum $35 payment here, a minimum $25 payment here. It was one lump payment that I was making to MMI to pay everything off. So that felt really daunting. And it felt like I'm never going to do anything fun for the next three years.

I'm going to have to, you know, live in a tiny little studio apartment and, you know, never go to the movies. But it was... MMI made it really easy to set up the payment so that it was, broken up throughout the month and it automatically came out of my direct deposit before it even hit my bank account.

So it kind of was like that money. Not that it wasn't real, but it made it so that I didn't have to think about it. So, you know, knowing that I was on a debt management plan, I was smarter about my money for sure. I learned how to budget, you know, it, it really was kind of a wake up call.

Like I'm taking this big step because I haven't been smart about my money. So what are all the other things that come with taking this big step? It's not just paying this down. It's setting myself up so that I'm not in this situation again. S, creating a budget, I definitely lived by a budget, you know, I still got to go out to dinner or, you know, do the things that I like to do, have fun experiences.

But I was more calculated about it. I planned for it, and I budgeted for it, whereas I wouldn't have done that before. I would have said, this is what I want to do right now, and swipe the credit card.

Adam Walker: Right. Right. Okay. Yeah, that helps me, because there's still fun, right? Like, you still got to live a life during this time. Like, it's okay. It's gonna be okay. You can still do fun things. Just maybe not quite as... It's extravagant, perhaps.

Katie Sanders: Absolutely, or not every single thing that you want to do. There is a level of like reigning it in to a certain degree. But not to the point where, you know, you're living under a rock.

Adam Walker: Yeah, that's fantastic. All right. So, last question. Katie, what does freedom from debt look like for you?

Katie Sanders: Well, for me right now, it looks like, putting my daughter in dance class, which she absolutely loves. So, you know, I have the money to have that monthly expense where she gets the little tutu, she gets the tap shoes, and she has so much fun.

So, you know, it's experiences with her, really. And it's experiences with my family that, you know, I don't have to think about as much as I did before. So there wa, planning and there was restraint during the time where I was paying everything off with MMI, and I feel like I learned how to do that now.

So, you know, I have some freedom now to do the fun stuff. And because I have a daughter and because I've really started my life it feels like, I have the money to do the extra stuff with her. You know, if we go to the store and I'm grocery shopping and she says, "Oh, I want that," you know, I could probably get it for, you know, I have, the freedom to do that.

I don't have to think about, well, I can't spend this $20 on this thing because I have to make my minimum credit card payment. You know, I don't have to think about that anymore.

Adam Walker: Well, Katie, the, the dance classes and the tutu and all of the great things sound amazing. Congratulations on your amazing accomplishment. and thank you so much for sharing your story with us on the show today.

Katie Sanders: Yeah, absolutely. Thank you so much for having me. I hope that this helps people in their, debt management journey.

Adam Walker: I have no doubt that it will.

This guest is a real MMI client whose success is the result of hard work and dedication.

While MMI cannot guarantee results, taking early action can increase available options and improve long term outcomes. Thanks for listening to this episode of Long Story Short, brought to you by Money Management International. To learn more about how MMI helps people from all walks of life get unstuck and out of the vicious cycle of debt through personalized solutions that inspire hope, visit moneymanagement.org. This episode was produced by Edgewise Media, scriptwriting and production by Clara Jennings, editing by Brandon Ellis, and show hosting by me, Adam Walker.

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