I’m 37 and I spent most of my 20s and early 30s dealing with mental illness. Long story short, I was severely depressed and struggled with addictions that made it hard to hold down a job or maintain my physical health. Through a mix of incredible luck and support from AA, I managed to get sober two years ago and I’m now gainfully employed (I do administrative work at a doctor’s office), with health insurance and everything.
While I’m relieved to be in a place of relative stability, I know that I will be working to overcome my past for the rest of my life. One of the biggest ways it affects me is that my finances are absolute shit. My credit score is terrible (in the 400s, last time I had the courage to check it), I have student loans despite never finishing college (about $18,000, I think), and I owe about $9,000 in credit-card debt. I don’t even really know where to begin with this, especially since maintaining a functional life is relatively new for me. I can recover from my depression and my addictions, day by day, but will I ever recover from them financially? I feel like I’ll be paying for this for the rest of my life, and I’ll never really catch up.
I get why your finances feel like an insurmountable obstacle right now. But as far as I’m concerned, you’ve already done the hardest part. Confronting and managing mental illness and addiction to build a stable life with a good job and a solid community? That’s the most soul-scraping work there is. I’m not minimizing your financial struggles, because I know they are stressful in a different way, but you’ve already assembled the tools you need to deal with them — namely, a support system, a decent income, a desire to be accountable, and a one-day-at-a-time ethos.
I also want to point out that you’re not alone. Most people, regardless of their demons, can relate to feeling “behind” on their finances. Everyone tells you to start saving money in your 20s, but few Americans actually do. They’re too busy, they’re not sure how to do it, they’re juggling debt and other priorities — my point is, they have their reasons, just like you have yours. Almost everyone I know feels like they’re getting a “late” start in digging themselves out of financial precarity. So as much as you can, let go of the notion that there’s a standard to “catch up” to, because there really isn’t. Everyone deserves the comfort that financial security can bring, but there are infinite ways to get there.
Your first step is to take stock of all your numbers and write them down. That includes what you make, what you owe, the interest rates on your debts, your credit score (sorry!), what your minimum monthly payments are, and how much you typically spend a month. Try to approach these figures with a neutral stance. They will dredge up some mucky self-judgment, but do your best to adopt the cool detachment of a detective or a scientist — you’re just assembling facts and information. Better yet, enlist a friend to sit with you while you sift through your bills and calm you down if you start spiraling.
Once you have a clear picture of your finances, you’ve got a couple of options. The first one is to consider debt counseling. The National Foundation for Credit Counseling is a nonprofit organization that can connect you with a certified credit counselor, ideally one who has previously worked with clients in recovery from mental-health and/or substance-abuse disorders. “It’s quite common for our credit counselors to assist people who are dealing with debt challenges that relate to a mental-health crisis,” says Bruce McClary, the vice-president of communications at the NFCC. When he was a credit counselor himself, he says he worked with “countless” people in your shoes.
The credit-counseling process works like this: You call the NFCC, they connect you with a counselor, and you have an initial session — in almost all cases, for free — to go through your finances and talk about a plan. Your counselor can advise on matters like how to find out if you qualify for student loan forgiveness, how to improve your credit score, and how much money you can afford to put towards your debt every month. If you don’t like the counselor’s vibe, call the NFCC back and ask them to set you up with someone else. You’re in charge here.
The initial consultation might give you enough material to work with. But if you want more direct support, you can enroll in credit counseling on a long-term basis (i.e., until your debts are paid off). If so, your credit counselor will come up with a debt management plan that involves consolidating some (or all) of your debts, lowering your interest rate, and creating a payment plan that’s doable for you. This process will not be free (most plans cost about $35 a month, says McClary), but it will almost certainly save you money if you stick with it — I’m sure you’re currently paying much more than that in high monthly interest fees.
Your debt-management plan will come with continued access to your credit counselor, and you should make use of them. If your circumstances change (say, you lose your job or have a medical emergency), your counselor should adjust your payment plan accordingly. They also have connections to other support groups, like Debtors Anonymous and the Substance Abuse and Mental Health Services Administration, and can make referrals if you need them.
One downside to credit counseling is that it can initially ding your credit score by a few points when you enroll, because it consolidates your lines of credit. (Again, this only happens if you agree to enroll — your credit score will not be affected if you simply call the NFCC for an initial consultation.) However, research by the Ohio State University has shown that people who enroll in a debt-management plan see a markedly higher increase in their credit scores over a 2.5-year period than those with similar debt who try to deal with it on their own.
Finally, if shit hits the fan and you miss more than one debt payment without telling your credit counselor that something’s up, your debts will roll back to your previous creditors — or collectors — and you’ll be back in the same tough spot that you’re in now (though probably not worse off). But if you stick with your plan and work with your counselor, you’ll have a clear timeline and goal. Most people who enroll in credit counseling pay off their debts in four to five years, says McClary. It won’t be easy, but it will be straightforward.
So, that’s one option. Another is to tap your current support network for advice. Ask around for recommendations — does anyone you trust have a certified financial planner they like (emphasis on certified!), ideally someone who has experience working with clients in recovery, who can meet with you for an hour and help you sort through your debt-payment options? You could also look for a certified financial planner online, ideally through the XY Planning Network; most will give you a free 15-minute consultation over the phone so that you can assess if they’re a good fit for you. If anyone tries to sell you something or promises results that sound too good to be true, run.
A financial planner will cost more up front than a debt-management counselor (an hourly fee could be a few hundred dollars), but one upside is that you won’t have to make a commitment to a strict program. They can also give you more holistic advice that goes beyond debt management, like how to start saving and make other strategic financial decisions.
Your third option is to use your existing resources to deal with your debt more independently. You can read books on personal finance (here’s a good list to choose from; Paco de Leon’s Finance for the People is another good one) and enlist friends and mentors to help you make a plan and stay consistent (you can do the same for them, too). You can institute a weekly money date to review your cashflow and payments (actually, do this no matter what). You can find additional community online, like this excellent Women’s Personal Finance group on Facebook. Professional help can be great, but there’s tons of free information and support that will teach you just as much at this stage. It all depends on how much autonomy feels comfortable to you. Don’t be shy about creating tons of scaffolding if you know you function better with it.
One more thing: You will slip up, feel hopeless, and worry that you’ll be paying off your debt for the rest of your life. Don’t let these very normal thoughts overwhelm you. There’s a world of people who are ready and happy to help. Keep them close, and hang in there.
The Cut’s financial advice columnist Charlotte Cowles answers readers’ personal questions about personal finance. Email your money conundrums to email@example.com.