A writer's ongoing recovery from credit card debt

NerdWallet’s How Do You Do Money? series asks people from various walks of life to share their attitudes and approach to personal finance, with the goal of bringing transparency to discussions surrounding money. In this installment we speak with Nicole Dieker, a 32-year-old freelance copy editor and essayist living in Seattle. This is how she does money.

What do you do for your main source of income and how did you get into that line of work?

I am a full-time freelance copywriter and essayist. I got into this line of work much like anyone gets into a career: I got hired for an entry-level job through Write.com and slowly networked my way to higher-paying clients and higher-profile assignments.

For more information on how I’m making my writing career work, check out my monthly “How a Freelance Writer Makes a Living” series on The Billfold. I explain everything — how I pitch, what kind of jobs I do, how I get paid, etc.

Would you like to be doing something else instead?

I would love to be a freelance writer for the indefinite future. I love running my own business, and I love writing.

About how much do you earn before taxes per year?

Last year I earned ~$35,000. This year I hope to beat $38,000, which is the official marker of “middle income” for a single person in the United States.

Do you feel secure with that amount?

I’m actually really secure with this amount. I’d love to earn more, but I know that I can support myself on this. The trouble is that what I really want to do is both support myself and pay off all my debt RIGHT NOW. So that makes me feel financially insecure. If all my debt were wiped away but I earned the same amount of money, I would feel financially secure.

What kind of debt do you have and how much is it for?

I have $15,866.81 in credit card debt. I have no student loan debt or any other type of debt. I have been paying my debt down for the past several months and plan to pay it off completely in the next two years.

It’s interesting because I didn’t incur this debt while I was working as a writer. I got into this debt when I spent a year as a touring musician. (I have a great article on The Toast about how that failed miserably.)

If I had any clue what I was doing, I could have probably stayed out of some of the debt, or turned it into Business Debt, if that is any kind of a thing at all. I mean, I got into debt because of my music business, which wasn’t making enough money to support itself. I had all of these obligations to people, like I had agreed to perform shows in certain places, and I had agreed to work with this band, and I was hemorrhaging money. Everyone was getting paid but me.

As soon as I stopped touring and started writing, my finances got back on track, and I started paying the debt down. I try to put between $800-1000 towards my debt every month. I’m doing the Snowball Method, and it’s awful to see one card debt decrease while the other two card debts stay roughly the same, but I trust that the Debt Snowball is going to work out in the end.

Is the debt worth it? I think it, like many other debts, was incurred out of a sense of survival. I didn’t get into debt because of stuff I wanted to buy; I got into debt because of stuff I had to buy. I got into debt because I had promised people that I would be in Phoenix on this day, and in Irvine a week later, and because I did a Kickstarter that ended up costing way much more to produce than I received in funding.

Do you have any savings goals? If so, what are they?

Right now I have a 403(b) that’s chugging along fairly well. I’m letting that grow in the background for the next two years while I focus on getting out of debt. Then, well — if I’m putting $1,000 towards my debt every month and I can start putting that money into savings, that’s MAGIC TIME.

Are there any resources or tools you’ve used to learn about and manage your personal finances?

Reading Joe Dominguez and Vicki Robin’s Your Money or Your Life right after college had a significant impact on how I treated my finances. I started tracking every penny right then and there. Even a decade ago I knew that their path towards “financial independence” was pretty much permanently outdated — I mean, high value Treasury bonds??? — but I really liked what they had to say about tracking your money and figuring out your true hourly wage.

I have a very complicated system of spreadsheets, most of which are derived from an arts management course I took in college. I learned how to make a cash flow budget and other business budgets, and I essentially applied those concepts wholesale to my personal financial tracking.

Sound like you’ve built a solid system that works for you.  How was the topic of money approached in the home(s) you grew up in? What factors do you think influenced that approach?

I was raised in a reasonably frugal household, and my parents fully impressed upon me the concept that consumer debt should be avoided at all costs. I started working summers as soon as I was 13, and the emphasis was always on the importance of both earning and saving money.

Both my sister and I made it through college and grad school without taking out any student loans. We are both incredibly lucky in that aspect.

I don’t know what factors influenced my parents’ attitudes towards money. I suppose I never thought to ask them! I always grew up thinking they had it right, both because they explained why they made the financial decisions they did and because those financial decisions always made sense.

How do you think that affected your attitude towards money and your personal finances?

If you’re asking me if I feel horrifically guilty that I have credit card debt, the answer is YES.

Not what I was going for, but interesting to hear.  Has your approach towards personal finance changed from the time you left home?

My approach to personal finance, or at least to purchasing consumer items, has stayed relatively constant. I practice the philosophy “use it up, wear it out, make it do or do without.” I live a fairly minimal life and I try not to buy stuff I don’t need.

The one thing that has changed is social expectations. When I graduated from college, I avoided going out to bars or restaurants with friends. I tried to come up with frugal workarounds like “why don’t you come over and we’ll share this can of tomato soup?”

Now that I’m in my 30s, there’s this expectation that you’re not going to live like a broke 21 year old anymore, even if you’re still broke. It would be great if we could all do more activities that involved homemade tomato soup, but being an adult essentially comes with a baseline financial cost, and coming to terms with that has been an interesting mental adjustment.

You’ve touched on something really important there!  As we get older, social expectations do change for what are acceptable activities, whether or not you can afford to participate in them.  What is the best monetary investment you’ve made?

The best monetary investment I’ve made has been my annual trip on JoCo Cruise Crazy. That community has been my lifeline for the past several years. It’s hard to explain what JCCC is if you haven’t ever been, but Hank Green made a short video that will help explain why so many of us make this trip every winter.

It’s changed my life. Every single time, it makes my life better.  It’s worth the $1,200 every year.

What monetary investment do you regret the most and why?

I wish I had figured out a way to get out of the music game before I hemorrhaged quite so much money. At a certain point I started telling people I just couldn’t come to their city anymore, even though I had said I would come. I wish I had been able to start doing that earlier.

What does financially stability mean to you?

Financial stability means being able to pay your own way. I think paying down your debt also counts as paying your own way.

What financial accomplishment are you most proud of?

My first business failed, but my second business succeeded.

Congrats on that, must be a great feeling! Are there any questions you’ve ever wanted to ask a financial advisor?

I’d really love to talk over everything with someone, actually. I know that my biggest hazard is my own hubris — I’ll read a book about running a freelance business and think “well, now I know everything!” If I had the chance to really sit down and go over all of my finances with someone else, that person could probably show me ways to optimize my finances that I’ve never even thought of.

The trouble is that money towards financial planners is money that doesn’t go towards the Debt Snowball. However, if you know a financial planner who specializes in freelancers, I would be very happy to learn more.

Actually, NerdWallet has a platform called Ask an Advisor where anyone can anonymously ask Certified Financial Planners, as well as experts on health and education, about their personal situations.

Do you, or someone you know, want to be interviewed? Email Heather.