personal finance

‘I Splurged All of My 20s, And Now I’m in Debt. Can I Fix This?’

Photo-Illustration: by The Cut; Photo: Getty Images

I am writing to you from a very low place. Six months ago I turned 30 and was overjoyed. My 20s were a total drag! I spent the decade navigating autoimmune issues, professional hard knocks, and a revolving door of heartbreak. Not to mention cynicism for a future tainted by climate disaster and political discord.

My lack of faith meant I decided not to plan for my future in any serious way; like, a 401(k) seemed senseless to me. Instead, I simply pocketed all my income and did my best to live. I said yes to every night out, every special dinner, every concert, every weekend away. 

Then, when I turned 30, I decided it was time for a fresh start. I began a new job, moved into my own apartment, and started contributing to a 401(k). But I found that these changes did not yield much stability. What’s more, I quickly realized that the five figures of credit card debt I’d accrued in my 20s weren’t just something I could quickly pay my way out of. And once I started living alone, I realized I had to budget in a way that has almost wiped out my social life.

I have no one to blame but myself and am willing to work to resolve this. But I also feel like I’ve been punished for the choices I made and that I wasted ten years of my life failing to plan for my future.

What is the lesson here? How can I power through this without feeling like every choice I’ve made was a mistake?

Many people (including me, in my 20s) treat 30 as a milestone when you should have certain things figured out — a career, a nice place to live, a 401(k), a partner, a capsule wardrobe, a signature dish, whether to have bangs (or no bangs).

And … sure? It’s great to have goals, but only if they help you — if you put too much stock in them, they become a ledger of what you haven’t done, a shimmering mirage of your perceived failures. In your case, they’re also making you feel worse about what sounds like an already challenging decade in your life.

My point is, you’re judging your 20s (and yourself) very harshly, and it seems like a waste of your energy. What’s more important is that you’ve entered a new and different phase. You want to gain a sense of ownership over your future. This is a major epiphany and an exciting one, but you can’t just flip a switch and emerge polished and debt-free with a well-oiled budget.

Your “fresh start” reminded me of the theory of locus of control, a concept of personality psychology that addresses some of the struggles you described. The gist is that people with an “internal” locus of control believe that they direct their lives entirely through their own actions; those with an “external” locus believe that life is shaped by outside factors that they cannot influence. Neither extreme is desirable, and real life falls somewhere in between — you can control some things but not others.

It sounds to me like you’re reexamining your locus of control and trying to shift it from external to internal. This is a good thing — it’s important to take responsibility for your actions (and pay off debt), but remember that not everything that happened in your 20s was your fault.

A person’s locus of control is shaped by many factors, but Jasmine Ramirez, a financial therapist based in New Jersey, noted that health can have an especially strong impact. “I come from the medical field, so I know how daunting it is to navigate finances when your health is unpredictable,” she says. “Especially when you’re young, feeling held down by an autoimmune disease doesn’t always align with developing an adult mentality of thinking about the future.”

Also, it’s normal to mess around in your 20s. I spent mine frittering away my small paychecks on long dinners and margaritas and sample sales and who knows what else. I lived in crappy apartments with roommates and at one point had no refrigerator because our landlord refused to replace ours after it broke. I had a lot of fun, but I also felt adrift and confused, guilty about how much money I was spending and how little I had to show for it. I also felt vaguely “behind” where I wanted to be in life, financially and otherwise. Sound familiar?

Sitting here on the wizened perch of my late 30s, I still feel this way sometimes. The difference is that now I make more money, have my finances generally in hand, and feel more confident about getting back on track after I blow my money on something dumb. I think you’re on your way to a similar spot — a place of relative financial security that still allows you to do things you enjoy. But the key to getting here is understanding that there’s actually no “here.” Being good with money is not a constant state. In my early 30s, I got hyperfocused on my finances, making spreadsheets, and writing down every dollar I spent. I don’t recommend this approach; it was obsessive and borderline ridiculous. My point is that everyone’s relationship to money and control is a constant experiment.

One way to jumpstart this process, especially when you’re in a low place, is to focus on small and actionable steps, says Ramirez: “Even if you haven’t made all of the big changes that you want, what’s one small thing that you can do today? That could be anything from moving a small amount of money into a savings account to writing down a list of expenses you can control versus ones that you can’t.”

You mentioned that you feel punished by the decisions you’ve made, but your recent choices are quite sensible. You landed a big new job, started putting money in a 401(k), and got your first apartment on your own. You’ve since discovered that your higher rent costs are infringing on the social experiences that you value so much. Now you know how much those matter to you! Going forward, you’ll need to designate a bigger chunk of your budget to that part of your life and tailor your other expenses accordingly. I would argue that you aren’t being punished for your move — you’re just learning from it, but when your lease is up, you may want to find a more affordable place to live.

I also suggest establishing a weekly money routine or “date” during which you review your expenses and consider what’s coming up. Automate your savings and other bills as much as you can so that you don’t have to make decisions around them (or second-guess yourself).

Sarah Swantner, a certified financial planner and financial therapist, recommends doing an even more thorough inventory of your expenses. “We often get attached to a certain product or service that we believe is the best way to fulfill a certain need or desire,” she says. “Consider digging deeper into the things you feel strong attachments to in order to learn more about what basic desire or need these things are addressing, and then brainstorm alternatives.” The classic example is asking to meet your friends for a walk instead of going out for drinks or dinner — you fulfill the need to connect with them for free. (For more ideas on “auditing” your own spending, see here.) Alternatively, this exercise could reinforce your belief that a certain expense really is worth it. That’s great information, too.

Swatner also recommends credit counseling for your debt. Start with the National Foundation for Credit Counseling or the Financial Counseling Association of America, organizations that provide certified credit counselors that will review your case and help you build a repayment plan. (You can learn more about credit counseling here, but steer clear of debt-settlement or debt-relief agencies, many of which are predatory.)

As for the lesson, it’s not that you need to wash off your mistakes and power through until your finances are spotless. It’s that you need to trust yourself and your own decisions — and most importantly, your ability to recover a sense of control when things go awry. In that sense, your 30s are already off to an excellent start.

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‘I Splurged In My 20s And Now I’m in Debt. Can I Fix This?’’