When Chasing Your Dream Career Means Falling into Debt

Show Notes

• Guest: Ericka L Rutledge
• Host: Adam Walker
• Publication Date: July 25, 2023

Highlights

1:43 | Ericka talks about her job as a licensed clinical psychologist working primarily with children dealing with chronic medical conditions. 

2:37 | Ericka walks through the student and medical costs that put her deeply in debt.  

7:37 | Ericka explains how the lowered interest rates that came with her debt management plan helped her finally start making headway against her debt. 

11:26 | Ericka talks about her initial skepticism about working with MMI and how appreciative she is now of her experience. 

12:59 | Ericka talks about the importance of advocating for laws that protect consumers from unfair lending practices.

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.

Ericka Rutledge's financial hardship began when she was completing her post-graduate studies. After taking out student loans and having a baby, Ericka quickly realized that she was falling behind and struggling to make the minimum payments on her credit card. After being referred to Money Management International by a financial consultant, Ericka was able to pay off $33,000 in debt, in just four and a half years.

Ericka, welcome to the show.

Ericka L Rutledge: Thank you. Thanks for having me.

Adam Walker: I love seeing those big numbers in those short timeframes. That's always like the most encouraging thing. Like I love that. That's amazing. So you're obviously an amazing individual. We're gonna get to know you. I'm looking forward to, getting to chat with you today.

So let's start with you. Can you tell us a little bit more about you and what do you do for work? Where do you live? Who are you?

Ericka L Rutledge: Yeah, so I am a licensed clinical psychologist that, I work at a children's hospital in St. Louis, Missouri. And there I work primarily with children and families that have chronic medical conditions.

Adam Walker: Gotcha. Wow, that sounds kind of amazing, you get to help kids for a living. I love that.

Ericka L Rutledge: Yeah. Yeah, it's definitely, something I enjoy and I'm very privileged to get to be a part of these families' lives and try to support them in whatever way they need. Yeah.

Adam Walker: That's such important work. So, so as I mentioned kinda in the intro, I know your story begins a little bit more uniquely in that your debt, wasn't just from spending a bunch of money on non-essentials. But a lot, a lot of it was related to student loans and then that kind of shook your financial picture.

So can you tell me a little bit more about that and when did you realize you needed outside help?

Ericka L Rutledge: For undergrad, I had gotten into school. I went to Indiana University and I had gotten some scholarship funding, and so after I graduated from my undergrad, I had worked for a little bit but decided I wanted to go back to school. And then when I decided to go back into graduate school, I ended up having to take out loans. So I really didn't have any, Undergraduate loans that I had to pay off, so that my debt was from graduate school.

And so, I first, I started a master's program. I went to New York University. It was a great program, but also very expensive. And even with the loans that I had to take, that I was able to take out for my education and to pay for my tuition. It, it would not cover anything towards living expenses. And if you've ever lived in New York, you probably understand like how expensive it is to live there.

And so I also had to take, in addition to taking out federal loans, take out some private loans to be able to afford to live in the city while I was doing my graduate studies. And while I was there, in addition to being a full-time student, I also worked. So I don't feel like there's ever been a time in my life where I haven't been actively employed and or volunteering in some way or another.

After that very expensive two year education, I then went on to get my doctorate degree. That program is about a six year program and it is very intense and not only are you, you know, have a full load of classes, but then you also have to do practicum outside of that. And usually that's for about like, 10 or 20 hours a week. And so there's really not a lot of time to, work outside of those programs because they are so intense. Being in that program for, the better part of six years, again, that debt continued to grow and I really didn't think about it.

You know, once I was like, you know, when I get out, I'm gonna be a doctor. I'll have a good income. We'll, figure that out then. And then I was also aware of like some of the loan forgiveness programs and was planning on getting involved in those kind of, in the midst of everything. I had, was having some actual vision problems. Uveitis- I was diagnosed with and then had to get, on top of my educational expenses, have a lot of additional medical expenses that were unexpected that I had to take on during a time where I was not able to work.

So that kind of added to the debt, having to pay for really, just prescriptions. It's amazing how much eyedrops can cost. It's like liquid gold in like a small little, a tube, that you have to pay for. So that was another kind of unexpected expense that added to the debt that I accrued. And then just in terms of, you know, being in graduate school, we, you know, we do get a stipend and we do get support, but it's not very much, and it's basically maybe enough to buy your meals, not enough for living expenses and things like that.

So all the time I'm having to take out more educational loans and additional loans to kind of, start to pay back. And then my other loans from my master's program started to become due and having to forbear those, and defer those, as much as possible. So yeah, that's kind of how the ball started growing.

When I was finishing my postdoc, I got pregnant with my first son, Avery. And that was very exciting. But also, the more expenses come with having a baby, of course. And then, you know, luckily I was able to start my first job right after he was born, so that helped with that till, you know, I was able to start my first job and all those debts like had accumulated, and not only from federal loans, but also some private loans, even though I was really focusing and trying to pay significant amounts to my principals, like every month. It just wasn't moving and it was just, such a defeating feeling of like, I'm working so hard to get out of this, like, debt like, hole. And you know, paying, like setting aside a thousand dollars a month and it's just, like the interest is just killing you every month and you can't make a dent in anything.

Adam Walker: So like we mentioned earlier, since working with MMI, you've paid off $33,000. You did all that in four and a half years. How did getting a personalized debt management plan help you balance your budget and see a path forward?

Ericka L Rutledge: Without the plan, the interest just accrues. And even if you're paying like a thousand dollars every month towards it, it's just when you, especially when you have higher interest rates, which right like, happens over time and it's like 30% interest that you're paying. It's like half of the money you're paying, even though it's a significant portion, is going- Right like to the interest and it's not actually taking down your debt very much.

And it took me a little bit to figure that out, of like, I don't understand how I'm paying so much each month and how come, right, like I look at my bill, you know, couple months later and it's barely a dent has been made.

So the MMI program really kind of helps, like, you be able to actually see progress and see some of the results of your efforts and kinda helps motivate you to keep going. And also just gives you a way out of the debt that has, has accumulated.

Adam Walker: That's great. That's great. So, if you don't mind me asking can you share with us like where some of your loans stand right now, and do you feel like you're in a better position to pay them off now that you've completed a debt management plan?

Ericka L Rutledge: Yeah, I definitely feel like I am in a better position than I was a couple of years ago. Right now, I still have student loans that I'm trying to pay off. I am fortunate to be in a loan forgiveness program for my- through my employer for the work that I do. So we'll see kind of what, what the politics kind of play out with the current loan forgiveness program.

But I am close to having my loans forgiven for some of my educational debt. I do still have some private loans, and I think those are kind of like the tougher piece because it's amazing how you can take out a certain amount, you know, like 20,000 like a couple of years ago, and then now it's somehow ballooned up to like, 60 or 70,000 and you're like, wait, I don't even understand what happened. So I think that those are more of the places that- to kind of focus on once I get done with some of my other educational debt, and having-

So I had my son who is now six, and now I have my daughter who's four. Right? And kids aren't cheap. There's significant costs for childcare. And with Covid, when, right like there wasn't childcare and you have young kids and like having to take additional time off work to support, you know, your family and because you have no childcare. On top of that, both of my children are neurodivergent and have additional needs. And so, you know, getting additional supports like speech therapy, occupational therapy, things like that for them. Right, is another cost they- They can't go to regular like summer camps right now. And so having to find specialized programs that are able to meet their needs.

So a lot of those other things with being a parent are, are also adding to some of the expenses that I have. So yes, it is challenging, but I do see progress being made.

Adam Walker: That's great. That's great. And you're right, kids are not inexpensive. That is for certain. So, well that's great. I'm really glad that you're in a better position now and that, the debt management plan was able to help you get there. So what were your credit counseling experiences with MMI like and what would you say your biggest learning lesson was from this process?

Ericka L Rutledge: Having them kind of walk me through like a way out of like, I'm doing something and it's not working right because, the debt's really not going anywhere. I'm still losing a chunk of my income, paying towards it every month and it's still not really kind of, really going down in any significant way. And so the, the credit counseling and the ability to get in a program where, right, like that interest does not keep, you know, pulling me away from my goals.

The lesson that I learned is that like there are people that are out there to help. And that it's not a scam. And that people really do recognize and want to help people who are having these financial challenges and that they are helpful. And so I think going in, I definitely was a skeptic, but coming out I'm sold on the process and very appreciative of the work that they do to kinda help people like me get out of some of these financial challenges.

Adam Walker: Absolutely. I love that. I love that. That's great. So, so last question. Even though, you know, debt is super common for so many people, we don't really talk about it. I'm curious, like, how do you think debt counseling nonprofits like MMI can help to break that debt stigma?

Ericka L Rutledge: Yeah, no, I think being a psychologist is definitely something you know, that I've been interested in. And I think like, this is great, like having podcasts and talking to people about some of the things that we typically don't talk about. And while, you know, there can be a lot of stressors in life, financial stressor is a tough one. And especially when, you don't see a way out. So I think this is really such an important component for wellness and wellbeing for people.

I think advocacy towards some of the laws controlling what credit card companies can charge and what they can change. And really it's sad because you have less money, so you have to take, right, like loans and borrows and yes you pay more for that. But then, right, like the penalties you incur for not being able to pay initially, not only from like buying a house to buying a car to like school loans, it's like, if you don't come from a background that's more privileged and or where your family can support you, it's like you're punished. And you're having to work even harder to maintain, or achieve any type of financial security. And that's not fair, and it's not equitable.

And I think there can definitely be some changes in the type of laws to provide, like, okay here may be some places where you can get additional funds that they're not gonna charge you, like 30% interest on everything. And also having more kind of, financial literacy given and provided for, right like, undergraduates and people, even high school students before starting their college careers. Because, right, like you don't know until you know. And then, it's like too late. And so I would've loved to have a little bit more of a background and knowledge.

Like before I, you know, started and even like the work that they've done, it's made me more of an advocate within my field. I've done some presentations on pay equity for psychologists. Their work has kind of like inspired me of like, oh wait, like we can change things. We, right like- and, but there's more work to be done.

Adam Walker: Yeah, there is, there's always more work to be done in this field and I really appreciate you being willing to come on the show, share your story. It's an inspiration that you've been able to come as far as you have, and I have no doubt you're gonna go all the way and do amazing and wonderful things for you and for your family and for all the people you helped. So, Ericka, thank you so much for joining us on the show today.

Ericka L Rutledge: Yeah, thank you. Thanks for having me.

Adam Walker: 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, script writing and production by Clara Jennings, editing by Brandon Ellis and show hosting by me Adam Walker.

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