Financial literacy is personally important to me because it gave me the hope I needed to really get my own debt paydown moving.
A slow start
Debt never just happens. It eases its way in, grows, and festers. Then it takes over, breaking even your will to get rid of it.
I had over $160,000 in credit card debt and student loans by the time I finally convinced myself to get started paying it off.
And when I did start, I came at it with the mentality that the best I might hope for would be to not fall into the abyss.
The issue with starting so close to the edge was that mentally, I was still broken; making a meaningful dent in my debt — let alone paying it off! — looked so far outside my capabilities that I barely wanted to try.
Of course, when I first started sending money toward my debt at the beginning of 2013, the numbers went down, but slowly.
But I made a lucky decision back then when I resolved to start blogging alongside my small payments.
Blogging about paying off my debt not only held me accountable to making those payments, but it also helped me to get smarter about personal finance.
No, getting more knowledgeable didn’t directly make my loan payments smaller.
My aha moment
But financial literacy did help in many other ways.
It taught me how to deal with credit card issuers to ask for lower rates and balance transfers, and how to work with student loan issuers to make my payments more manageable.
It taught me how to budget and live more frugally so that I might have even more to send toward my debt.
And it taught me the power of compound interest and how small changes can add up to a very big impact over time — even big compared to the size of my debt!
My aha moment was when I found out that I wasn’t facing an impossible task — that I did have a chance to beat my debt and that I had the tools at my disposal to do so.
Today, my debt is over $40,000 less than where it was when I started. I still have a long ways to go, but thanks to financial literacy, I have the tools — and more importantly, the hope — to get there.