Preface

It's 2012, and I'm 23 years old, sitting at a kitchen table I share with three roommates. We live in a row house in an up-and-coming area of Washington, DC, one of the most expensive cities in the United States.1 I'm warned not to walk on the north side of the block, where my roommate got mugged earlier that year, but I love the neighborhood because it reminds me of New York City. There are plenty of families in the area, hole-in-the-wall restaurants, and a metro within walking distance. I had moved from New York just a few months earlier, and something about this place felt like home.

Most importantly, I could afford it.

My dinner isn't anything spectacular; some tomato zucchini stew I found on a random food blog. It sounded like a good idea because it was easy to make, and the ingredients were cheap. I cook most of my meals to try and save money, making exceptions on the weekends to go out with friends. We're all in our 20s and 30s, trying our best to make ends meet.

Most of us have significant debt - student loans and credit cards - but we don't talk about it. We do talk about almost everything else: our families, who we're dating, sex, politics, and so on. But money is hard to talk about when you don't have much of it, so the majority of us who do work hard but still feel like we need more . give us anything else to talk about. Ideally, something with the potential to make us feel good, because money is hard for a lot of Americans.

According to the New York Federal Reserve, as of 2022, Americans have over $890 billion in credit card debt, $1.59 trillion in student loans, and over $1.4 trillion in car payments.2 Combined with almost $11 trillion in mortgage debt, we owe over $16.5 trillion. You could spend $1 million every single day for an entire year for 42,000 YEARS (!!) and still not reach that amount.

That's wild when you consider money touches almost every aspect of our lives. You'd think we'd all be better at it by now.

Unfortunately, despite all of our practice spending money, it's not something most of us are "good" at for a few reasons. For starters, personal finance isn't something most of us are taught at home or in school, in part because all of our teachers and families were likely trying to figure it out too. But that doesn't mean it's an impossible topic to learn.

In fact, it turns out, we all learn about money all the time - just not the strategic stuff.

Research by a group of psychologists at Purdue University found that children can grasp basic concepts about money at three years old and form habits about money by age seven.3 This means that even kids can learn about money, but most don't . at least not in ways that are helpful. Even when adults talk about money, it's rarely about strategy or based on evidence because no one ever told us what we're supposed to do.

So none of my roommates and I, nor my family and I, ever had a conversation about how I was supposed to make it in this new city. It's almost December and I'm logging into my bank accounts because the grace period on my student loans is ending, and I have no idea how I'm going to pay them. I'm not even sure how much I owe - I think I blacked out once I learned it was higher than my salary.

Sometimes, the worst part about debt is stomaching the realization that you signed up for that credit card or that loan yourself. Even if you felt like it was your only option at the time, when hindsight is 20/20, it can be a little too easy to bring yourself down. I certainly spent a good chunk of time thinking that way.

I grew up in a middle-class neighborhood and my immediate family never struggled with money, but it wasn't something that was normalized or talked about either. I didn't have any debt during undergrad due to a combination of scholarships and family support.4 It was my master's degree from an expensive private university that I willingly took on debt for, with zero concept of what it would mean to pay back.

Looking back, I had no idea what I signed up for; I thought I would magically pay it off. I had no experience working a full-time job and barely any credit history. I had no understanding of how interest works. As the first person on my mom's side to go to college (my dad had help from the military) there wasn't a lot of knowledge about student debt to be passed down. There was no warning or disclaimer. I just figured if everyone else did it, I could too.

Turns out it wasn't as easy as I had hoped.

My first job out of graduate school offered a $37,000 salary, and I negotiated up to $40,000 with the master's degree I was so proud of and indebted to. It was my dream field, but the salary was significantly lower than I had expected.

I owed about $44,000 in student loans, living in one of the most expensive cities in the country. The cost of living wasn't that much different from when I lived in New York, but that was during my debt-free glory days. Life with debt was a whole different story. Now, I can look back and realize my situation wasn't so bad - I was always able to pay bills on time and millions of other Americans have non-mortgage debt upwards of $100,000. But at the time, the idea that I had more debt than I would make in a year was soul-sucking.

Not my vibe.

So, I enter my password into Sallie Mae, a major student loan servicing company that would be my archnemesis for years to come. I try to remember the type of repayment plan I have, but there are too many options to recall anything specific. Given that over 35 million Americans had student debt in 2012 (over 43 million in 2022), you'd think the process would be more straightforward.

It's not.

I have to go to a completely different website to find out what type of repayment plan I have.5 Once I'm there, I check all seven: a "Pay as you earn" plan; a "Revised pay as you earn" plan; a "Graduated repayment plan" - still no - an "Extended repayment plan"; a "Income-contingent repayment plan" - again, no - and an "Income-based repayment plan."

That last one sounds right!

Except . $hit. I forgot to apply (I won't bore you with the details).

So, I'm left with the standard 10-year repayment plan. I think. I finally find a copy of my statement. I push my tomato zucchini stew away like I'm protecting it from something it's not supposed to see, and I take a deep breath.

I would owe $503.90 monthly for the next 10 years of my life. I'd pay the $41,000 I originally borrowed, plus over $3,000 worth of interest I incurred while I was still in school, and over $16,700 in additional interest over the 10 years - almost 50% the price of my original debt. That's an extra $19,700 in total I didn't sign up for.

(Or at least I didn't realize it.)

I think back to hearing the phrase "Do it on a dime" as a kid, meaning, do it on a budget. It always made sense to me. Why spend more when you can spend less? Even in my early 20s, I was never a big spender. I've always loved to travel, so I'd prioritize saving for that every year, but otherwise was pretty frugal.

Some friends and family might have called me "cheap."

In reality, I didn't have much of a choice. When over 25% of your income after rent is going toward debt, it forces you to be strategic.

I thought to myself, "How am I supposed to save for the future when I don't have anything left to build with?" This wasn't a DIY project, or a lemonade stand. This was my life.

Immediately, I panic. My minimum payments come out to $503.93 if I stick to the 10-year plan. It's about 20% of my take-home pay before I make rent or save anything (and my rent was cheap). Weren't your 20s supposed to be . glamorous? Or at least fun in a we're-all-scraping-by-together kind of way?

I didn't think I'd make a ton of money out of grad school, but I didn't think my life would be filled with financial anxiety either. I thought I'd be able to go out to dinner without feeling anxious about the bill. I thought I'd be able to go grocery shopping without trying to calculate how I could make a week's worth of lunch for under $20.

(The answer was a lot of rice and pasta. Good thing I'm Puerto Rican and Italian.)

So there I was: $503.93 a month and over $19,000 worth of interest to go. At that rate, I'd be 33 before I paid off my debt. I always thought I'd have a family by that time . "How the hell does anyone afford kids?" I think to myself.

Other thoughts that immediately follow:

• "How will I ever buy a home?"
• "How am I paying 50% more than what I took out?"
• "I went to school for ECONOMICS, for Christ's sake!!!"

It was my first real taste of feeling like I had lost control of my own life, and it was my fault. I couldn't blame anyone else. I couldn't ask my family for help. I just had to sit with it.

It wouldn't hit me until a few years later, but eventually, I realized that just because your finances go off course...