More Money Podcast - 021 How to Break Up with Your Debt - Melanie Lockert, Blogger at Dear Debt

Starting point is 00:00:00 Hello, and welcome to Episode 21 of the Mo Money Podcast. I am your host, Jessica Morehouse. Thank you so much for joining me today. Appreciate you taking the time to put me in your ear, listen while you're on the subway or at work. That's when I listen to my podcast. And I am so thrilled to talk to my next guest. Her name is Melanie, and she is the blogger behind Dear Debt. So I really love her blog because it focuses specifically on debt. That's a big part of her personal finance journey. But what's so special about hers is she talks about her experience, but she also gives an outlet for other people to share their stories through her Dear Debt letters. So basically her kind of whole premise, and we'll get into this in the show, is to break up with debt, you know, through a Dear John letter. So very excited to

Starting point is 00:00:56 talk to her on the show today. Thank you, Melanie, for being on the show with me today. Yay. Thanks so much for having me, Jessica. I'm so excited to be here. And you know I love Portland, so I'm pretty excited. I'm a big fan of where you are living right now. It's nice. Yeah, it's beautiful there. So yeah, so let's kind of jump into it. Let's kind of get a background of where you came from and how you got into this crazy

Starting point is 00:01:24 world of personal finance. Yeah, my personal finance story is quite long, but I'll try to give you the abridged version. So I got myself into $81,000 in student loan debt, which is an astronomical amount of debt. Let's just be honest. Yeah, it's a lot of money. It's a lot of money. It's a lot of money. More money than I've ever made, you know, annually. And that was pretty much from my undergraduate degree,

Starting point is 00:01:54 which was around $23,000 in debt, which, you know, was pretty affordable. But then I really took the leap and went to my dream school, which was NYU, which, you know, was another $58,000 on top of that, which, you know, makes up the $81,000. And so, you know, a few years ago after graduating from NYU, uh, that was for your master's degree or yeah. So it was my master's degree and, uh, you know, a really lucrative field called performance studies. So, you know, I had tons of jobs knocking at my door and, uh, no joke. Yeah, I feel, yeah, I feel, yeah, I'm a film school grad. So I had zero jobs. That's not totally true. I had some part-time jobs, but, uh, you know,

Starting point is 00:02:42 it was very difficult for me to find full-time work, which was hard for me because I had always had a really nice full-time job before that. And because of different personal circumstances and professional circumstances, you know, I couldn't find a job in New York. My partner, who I was doing long distance with, lived in Portland at the time. And we were sort of going back and forth between Portland and New York, which is also a big commute. Yeah. Yeah. I know we had met in LA. I went to school in New York. He went to school in Portland and we did long distance for almost two years. And, uh, you know, just sort of made sense for me to move from New York to Portland because I couldn't really find a job that could help me pay off my student loans and survive in New York. So I came to Portland to be with him.

Starting point is 00:03:29 And also it's about 50% cheaper here. So yes, exactly. Really, really good. The thing is, is that Portland has a really horrible economy, unfortunately, like really, really terrible. And so I struggled even more when I got to Portland, I would say. So it's like tricky because everything is a bit more affordable there, but they're still not a big variety of work. Yeah. Yeah. It's really heavily, um, focused on the service industry, which is fantastic. Um, but I have zero service industry experience and I feel like, you know, even to work in a coffee shop, you have to have a master's of baristology or something. Oh, my God. So yeah,

Starting point is 00:04:11 it was pretty tough for me to find work when I first got here. And so that was another tough point. And so really, you know, I would say about a year of living here, I had just felt like, oh, my goodness, I'm in so much student loan debt. I have a master's degree. I worked so hard and I can't really find a career here. And I was just feeling so, so, so frustrated. And I was talking to my boyfriend, I was talking to my parents, I was talking to anybody that would listen to me about how frustrated I was. And, you know, I was really kind of spiraling down, you know, a deep, dark place. I would say I was. And, you know, I was really kind of spiraling down, you know, a deep, dark place, I would say I was not in a healthy mental space at that point. And so I finally just decided one day after lurking on personal finance blogs for so long that I was going to start my own. And I

Starting point is 00:04:57 was going to channel my energy into something productive and positive. And so that was a lot of rambling, but yeah, no, I love it. That's amazing. I think that's really like motivating and cool to see. Cause I mean, I totally feel you coming from an arts background, going to art school, graduating and not being able to find a job. And that's exactly once I finished my degree, uh, I also couldn't find work. I, and that's when I actually got interested in personal finance and personal finance work. And that's when I actually got interested in personal finance and personal finance blogs. And that's part of the reason I started my own blog. So I find we have very similar kind of backgrounds. But it's great to see that you kind of took that, you know, you know, you weren't in the best space. And I was in a dark space too. It was so not fun. It was

Starting point is 00:05:40 probably one of the darkest times of my life being unemployed and just feeling unfulfilled and unproductive and then turning it around and doing something positive. Yeah. Yeah. I was in a horrible, horrible space. I mean, I was in therapy and I was just, you know, crying almost every day. Oh yeah. I was in a deep, dark depression. Like I own, I'm like, yeah, I look back like I was full on depressed. And yeah, at the time I was, I was dating my, my now husband, I think back like I was full on depressed. And yeah, at the time I was, I was dating my now husband. I think maybe we'd been together for like two years and he'll still be like, oh yeah, I remember that year. It was really rough on me too.

Starting point is 00:06:13 Like, yeah. My partner is a champion that he stuck with and we laugh about it now because things are much, much better. And thank goodness because I was driving both him and my parents crazy. You know, they kept telling me, be patient, be patient, keep trying, keep trying. And you know, when, when you're in that kind of space, like that, that's good advice. And that makes sense, but that's not what you want to hear. And you just want things to get better and you don't know how that will happen or when that will happen. And so, you know, I realized, you know, I'm sending out a hundred resumes a week and I'm going on interviews and I'm networking.

Starting point is 00:06:47 Like, I don't know what else to do. Exactly. You're like, you've got that checklist and you're doing everything on it. So why isn't anything working? I know. So I was super happy that I started my blog because it was something completely different. It was a creative outlet for me to just write about debt, honestly, write about money. Honestly, you know, I couldn't really have this conversation with a lot of my friends who either didn't have student loan debt

Starting point is 00:07:10 or their parents paid for it, or, you know, they weren't struggling nearly as much as I was. And it was just a really, really, uh, great thing that happened in my life. And obviously, you know, given how everything has turned out, it's been a complete blessing and the best thing that probably has ever happened to me. I know that's the kind of cool thing. It's like not only was it just a great outlet and, you know, for that moment, but it's turned into, you know, it's helped you with your current career. But it's also like and I want to kind of get into this next is you have kind of a series where called the Dear Debt Letters, where you get other people to write into you to discuss their debt. So you're giving an outlet to other people that maybe they don't want to start a blog, but they would like that opportunity to tell their story. So,

Starting point is 00:07:53 you know, with a community that totally gets them, which I think is awesome. Yeah. I'm so passionate about the Dear Debt Letters. Every time I have someone that, you know, emails me and says, I really want to write a Dear Debt Letter. I'm like, yes, yes, yes. And it's so cute because people are always like, what are the requirements? What do I have to do? Is this okay? Feel free to edit it. And I'm like such an overprotective mom about the letters. I'm like, no, it's perfect as is. I love it. I love all of them the same. And I really do, you know, like, I just love them all. And I think whatever people write, you know, the Dear Debt letters are essentially a Dear John letter to debt. It's a breakup letter to debt. It's, you know, this expression of creativity

Starting point is 00:08:37 and emotion and, you know, really trying to take back your life. And I think that's super, super important because one of the things that I couldn't really find when I was in that deep, dark place was the emotional feelings related to debt. You know, I would often find that, you know, cut back on your expenses, earn more, you know, all this other stuff, which is really, really fantastic advice. And of course, that's how you are going to get out of debt, but you really have to change your mindset and really be ready to get out of debt mentally and emotionally really have to change your mindset and really be ready to get out of debt mentally and emotionally first before you do all those other things. So I was really hoping to

Starting point is 00:09:11 create a community of people that want to get out of debt, that are working together to get out of debt and really have a supportive community where we encourage each other. And I just love the Dear Debt Letters. I think it's amazing. And I encourage all of the listeners out there that are listening right now to, if you're in a similar boat, to hop on over to Dear Debt and submit your story. So I'll include a link to where you can do that in the show notes. So moving on from that. So I think that is such one of the coolest things that you've done with your blog that really sets your blog, I think, you know, makes it kind of stand out amongst all these other blogs out there. But the other kind of cool thing that I recently read a post on your blog about how you've reached your one year of being a freelancer. And I'm assuming that the blog has had a big influence on how you became a freelancer. Yes, the blog has inadvertently turned into this other career,

Starting point is 00:10:07 which is just so amazing and also hilarious and ironic considering that I started the blog when I didn't really have work. And now it's given you a job, essentially. Yeah, and then the funny thing is I did end up finding a full-time job at a nonprofit probably six months after I started my blog. And it was in the nonprofit sector, which is where I've always worked for the past 10 years. So pretty much my income has never really surpassed $30,000 to $38,000. Even in L.A., New York, Portland, it's always been between $30,000 and $38,000.

Starting point is 00:10:42 And so I've always lived and survived on a fairly low income. And so, you know, freelancing was at first a way for me to increase my income in addition to my salary, you know, because I really, really wanted to get out of debt. And I knew that I really needed to make more money. So it was sort of a means to help me do that at first. And then it just, you know, sort of a means to help me do that at first. And then it just, you know, sort of took off and I got more clients and I had more referrals and I built my network where, you know, people would leave their gigs and they would refer me. It's been this really great sort of referral system and just really putting myself out there.

Starting point is 00:11:19 And, you know, I've just learned you never know where your next client will come from. You know, clients come from weird, weird places like Twitter. Oh, really? Yeah, from Twitter. And then also someone approached me about writing and I said, hey, where did you find out about me? And they actually found my link on another website because I was nominated for a Plutus Award at FinCon last year. Oh, wow. Yeah, it was such a, you such a roundabout way of finding me.

Starting point is 00:11:48 I was like, oh, wow, whatever works. So my point being is that you never know where people will find you, and it's always good to put yourself out there. But, yeah, after six to eight months of really freelancing hard, I realized that I could make more money as a freelancer. And also I was working insane hours at that time. I was waking up at 6am, you know, to do two hours of work before my real job. And then I would come home and work again from six to midnight. And wow, I got cranky. Oh my gosh. Yeah. That's, that's overkill. That's crazy. But also amazing that you had that much, I don't know, energy. I'm like, I don't know if I could even

Starting point is 00:12:34 just like the whole getting up at six. I'm not sure if I could do that. I don't do that now. No. But, uh, you know, at the time I had a lot of adrenaline and a lot of passion and I really, really wanted to make it work. And yeah, once I just punched the numbers and really sort of looked at the situation, I just knew that I could eventually make more than $30,000 on my own. And I'm very proud to say that I have done that. And that's been so great for me because, you know, I said that last year, I was like, I knew I could make more than 30,000, but you know, at that time I was just making what I was making. So I still had to prove that to myself. So to be able to do that has been a really, really great accomplishment for myself. And I'm very happy.

Starting point is 00:13:20 Absolutely. That's, it's no easy task to do. And I totally understand my husband is a freelancer and every year, you know, again, he doesn't make, you know, a boatload of cash or anything like that. But the fact that he, you know, is similar to you, he's not a new engineer. So he has to go out and network and meet clients. He never knows what kind of gigs he's going to get. But when we do see like every year, it gets a little bit better and a little bit better. It's like, listen, you're making money based on, you know, you you like for me it's like I work for a company I get a salary for a job I was hired to do but for him it's like wow it's kind of crazy that you know you almost have a little bit more I'd say like job security because you're the one that's responsible for

Starting point is 00:14:00 getting your job for it's like for me what if something happens with my company that I have nothing to do with and I could get laid off for whatever reason? So I definitely applaud you for being able to do that. It's not an easy thing to do. Yeah, you definitely learn a lot quickly. You do have to be resourceful and sort of be on your toes and always look out for the next opportunity

Starting point is 00:14:23 and always sort of project the numbers. And yeah, it's sort of a game, you know. And so it's mainly writing that you're doing as a freelancer. Yeah, I would say, let's do the numbers here. I would say 80% now is probably writing, 10% editing, 5% social media and 5% probably event planning. Event planning. Oh, cool. Yeah. I've been doing some work with some financial brands and having fun blogger events. I've only done a few of them, but that's an area that I hope to grow. That's a cool idea. That's awesome.

Starting point is 00:15:10 Get groceries delivered across the GTA from Real Canadian Superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC Optimum Points. Visit superstore.ca to get started. So how has all of this, like, it seems like a really, you know, it's a scary thing to kind of, you know, quit your job and then, um, just work for yourself, especially when you still have all that debt to pay off. So how did you kind of make that decision and what did you do to be like, okay, I, I'm, you know, I have this goal to make at least $30,000 working for myself, but I also have this debt that I have to pay off. So how did you

Starting point is 00:15:45 kind of rationalize that? Yeah, it was such a difficult decision to make, you know, to quit my job while still in debt. I mean, traditional financial advice would be don't do it. Don't quit your job when you have debt. What are you doing? You're insane. But I really, really truly believed in myself that I could and would make more money. And that's actually why I quit was to pay off debt and make more money because, you know, it's funny, I was working, you know, 12 to 16 hour days last year. And I was still only making $3,000 a month. And, you know, now I'm making more than that and being able to put more to debt, which is just so freeing. And so it really was a financial decision that I knew I could make more. And I really had to psych myself out and really prepare myself like,

Starting point is 00:16:36 this is what I'm doing. This is what I'm doing to pay off debt. And even though it seems like it doesn't make sense at all to anybody else, but me, I know it makes sense. And I know it will happen eventually. And I have to really prepare myself to hustle. Absolutely. Hustle has been, and, you know, those first couple of months, pitch, pitch, pitch, email, network. As we mentioned earlier, you know, FinCon was a really great opportunity for me to network with other people. And that was really sort of an elevating point for me, which was really fantastic. Are you a natural extrovert? Is networking and hustling like that kind of not a terrifying thing for you?

Starting point is 00:17:22 Because for me, that makes me sweat. I am an extrovert. I love meeting people. I love talking to people. And I would say actually, that's the most frustrating thing about being a freelancer actually, is because I am an extrovert and I like talking to people. I like meeting people. I like connecting people. You know, I get a lot of energy from that. And that you know, that's something I miss, actually, you know, being in an office and being like, hey, how was your weekend? You know, how was your day? Even though it's, you know, just kind of small talk, still having that interaction.

Starting point is 00:17:53 I think, you know, I definitely get energy from other people. Do you think you'll ever kind of expand your business to include other people? Or do you kind of just think you're going to be like a one woman kind of business? That's a really good question. Um, I always sort of see myself as a one person business, but I will say in the past month or two, I've just been fantasizing about hiring an assistant. Please someone help me. I don't want to do some of this stuff. That's just so boring. And, you know, some things that, yeah, I just, I want to focus on like the high level stuff that actually makes me money. Because the thing about, um, you know, freelancing is there's a lot of administrative tasks that I do that are not paid. And that's something that all

Starting point is 00:18:43 freelancers should really take into account when they're working is that, you know, maybe I'll get paid $200 blog post, but you know, how long is the research going to take me? How long is it going to take me to invoice that client? How long are we emailing back and forth? Do they require meetings every week? You know, do I have to have a special contract with them? That's going to take me, you know, half an hour to look over and send them back. You know, there's have to have a special contract with them that's going to take me, you know, half an hour to look over and send them back? You know, there's a lot of different things that sort of take up my time that don't seem like they would on an initial glance, you know? Mm-hmm. Mm-hmm.

Starting point is 00:19:15 So, yeah, that's just. I think I'll always remain small, but I'm hoping once I'm debt-free, maybe I'll hire an assistant to help me. Totally. And we'll see where you are in, in like one more year. You never know. Yeah. So one thing I did want to kind of touch on, I do find a big theme is obviously debt repayment on your blog, but also you have this mindset that's very,

Starting point is 00:19:41 I find with a lot of, you know, websites and blogs that talk about debt, it's very much like you have to get it out of debt and, you know, that should be your main priority. And you kind of have to cut back, cut back, cut back. And, you know, fair enough. Those are, you know, good points. But I feel like for you, especially with having like, you know, a big, you know, $81,000 in debt to pay off, like you obviously can't pay that off in two years unless

Starting point is 00:20:05 you're making a lot of money and just eating ramen noodles. But you're, it seems like kind of like the theme is like you have debt, um, put, you know, some things into practice, pay it off, but you don't have to stop living just because you're in debt. So that means like you can still travel, you can quit your job for a new opportunity. Like you can still, you know, live your life. Whereas I, which I think is a great theme. Cause I feel like lots of people may not want to kind of, you know, think about their dad or really tackle it. Cause they're afraid that all of all the sacrifices that they may have to make. I mean, I, yeah, debt repayment is definitely a sacrifice, but let's be honest, you know,

Starting point is 00:20:47 debt repayment isn't a prison sentence. It's not something that, you know, we should just beat ourselves over the head with and say, Oh my goodness, I'm in so much debt. I'm never going to go out to a restaurant ever again. I'm never going to buy coffee again. I'm never going to buy clothes again. I'm never going to do any of this until I'm debt free. You know, that's just completely unrealistic. And, you know, I think people that are like that, you know, maybe if they have $5,000 in credit card debt, cool doing it for a few months. Awesome. But yeah, I think for people that do have large amounts of student loan or credit card debt, like I do, you know, that's not a sustainable method. And, you know, for me, it's always this balance of living life to the fullest while also

Starting point is 00:21:30 managing your finances wisely, you know, because let's face it, I could die tomorrow, or I could live until I'm 100 years old, I have no idea. And, you know, I have to sort of manage that reality of, you know, I could live for a very long time and I want to make sure I'm responsible with my finances. But life is not promised to you. So how can we still have fun and enjoy ourselves? And also sort of what you said about the cutting back. I definitely think cutting back is worth it. But I definitely focus a lot more on the earning more side because I think it's more empowering to make more money.

Starting point is 00:22:08 And I've also been there where there's really nothing more to cut back. It's like, okay, aside from me moving back home with my parents, there's really no place for me to cut back. I don't have a gym membership. I don't have a car. I don't have a pet. I don't have people. Nothing. Absolutely. And I totally agree. And that's kind of one of the reasons when, when I was, I mean, my first job paid, you know, a really low

Starting point is 00:22:33 salary and I got to the point where I'm like, I cannot cut back any further. There's nothing to cut back. And then, you know, that's when I kind of started getting into reading, you know, personal finance books and blogs. And I'm like, Oh, there's ways that I can make more money. And so, and that's when, you know, I, instead of at the time when I got my first full-time job, I had this kind of random on-call job as a teleprompter for the news. And I thought I was going to quit that once I started my full-time job. But then I realized, well, you know, I need to actually start saving money. I really have nothing in the bank and my full-time job just isn't going to cut it. So I kept saving money. I really have nothing in the bank and my full-time job just isn't going to cut it. So I kept that job. I kept it for three and a half years.

Starting point is 00:23:09 And then I started making some money off my blog. And I think that's just a really important lesson for millennials, especially that may not really think about the making extra money on the side part of it, because it is kind of easier. Like it's not an easy thing to cut back into budget, but it is almost easier, I think, than finding other revenue streams a little bit. All about making more money. I think it's more fun. It's more empowering. You never know where those leads will get you in the future. So all about making more. So one kind of question to kind of leave us off, knowing what you know now and just having this experience, looking back, do you wish you did anything differently? Do you still, are you still glad that you went to do a bachelor's degree and

Starting point is 00:24:00 then a master's at NYU, even though now you're kind of stuck with this big chunk of debt? Mm-hmm. That's a really difficult question for me to ask. And I'll tell you why. degree and then a master's at NYU, even though now you're kind of stuck with this big chunk of debt? That's a really difficult question for me to ask. And I'll tell you why. You know, it's life has had this weird sort of irony for me, you know, where I started my blog because I was in this really deep, dark place and I couldn't really find a job, you know, and after getting my master's and then in this weird way, starting my blog about student loan debt has turned me into a freelance writer who writes about student loan debt. So if I didn't go to NYU, I wouldn't have my current career. So in a weird way, a very weird backwards way, it has worked out way better than I had imagined. But if I weren't thinking about it that way,

Starting point is 00:24:56 I would definitely second guess my idea of going to my, quote, dream school. I feel like, you know, the idea of the dream school can just be very seductive. And, you know, it's kind of like any sort of fantasy you have once you see the reality of it you're like oh it's not that great I know it was a dream I mean you know that's the thing you'll never kind of uh you know live up to it what it was in your mind but yeah at the end of the day it is what it is and you got to where you are now because of what happened. So yeah, I have no regrets. But if I were to do it again, I would think very carefully.

Starting point is 00:25:31 And that would be the advice. That's the advice that I would give others is to really think carefully about this idea of the dream school. And, you know, is it really worth it to pay double, triple what you could get elsewhere for this idea of the dream school, especially when, you know, jobs are not guaranteed. Yeah. Yeah. Unfortunately, sadly. Totally. Well, thank you so much for joining me on the program today. Yeah. Thank you so much. It was a blast chatting.

Starting point is 00:26:00 Oh, thanks. And thank you so much for listening to this episode. I appreciate you. And make sure to check out the show notes for this episode at momoneymohouses.com slash 21. Also check out Melanie's awesome blog, deardebt.com. And hopefully, you know, if you need an outlet and you want to share your debt story, I totally encourage you to submit your dear Debt letter on Melanie's awesome website. I'll make sure to include some links in the show notes in case you want to find out specifically how to do that. Thank you again for listening. And I will see you for episode 22.

Starting point is 00:26:36 I can't believe we're at 22. Next Wednesday. This podcast is distributed by the women in media podcast network find out more at women in media.network

More Money Podcast - 021 How to Break Up with Your Debt - Melanie Lockert, Blogger at Dear Debt

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