My relationship with money used to be hot and cold. My past attitude towards my finances is something many twentysomethings can relate to: I loved buying things for myself as a "reward" for my hard work, and I enjoyed the luxuries my paychecks could afford me—tons of clothes, evening dinners, and movies. Unfortunately, though my behavior was common, it didn't entirely mean it was right for me—or my bank account. 

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I got my first credit card when I was 25. I received it when my company opened up applications for its employees and it only had a P20,000 credit limit. But for someone who was always using cash, having it made me feel like I was on top of the world. This may sound a little bit childish to some, but I used to believe that having a credit card meant I was finally an adult. For the first time in a long time, I was able to buy things without worrying over my purchases eating up my weekly allowance. It just sounded so simple: Even if I wanted something that was way over my usual "splurge budget," all I had to do was pay for them in installments. 

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Looking back, it was that mentality that started my growing debt. When you have the means to easily pay for something without really looking at your cash on hand, it's easy to lose track of your spending. I remember thinking to myself, "This one can go to the card because it only costs P1,500." What I wasn't really able to keep track of was how many swipes I did in a whole month, thanks to my plastic superpower. That was the first mistake.

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The second was when I started getting more credit cards with higher limits. Since I was mostly using my cards for everything and managed to pay all my monthly costs at first, I was granted a higher limit of P60,000 for the second card that I got. That grew to P120,000 in my next year of being a member, and on the third, I was granted a gold card with P150,000 in credit limit. That was when things really started getting messy.

One of my biggest mistakes was thinking that I actually had P150,000 to spend, when in reality, it was just credit. My purchases started getting more and more expensive. I bought a laptop and other gadgets, paid for my trip tickets, and even used my cards for really small purchases like my daily coffee. I could have paid for that in cash. My next wrong move was not paying enough attention to which card I used and not keeping track of all my purchases on each one. I was simply rotating them—sort of like a roulette game of which card I can pull out of my wallet first—until it also became hard for me to organize the numbers on my monthly bills.

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By the time I was 28, I was about P220,000 in debt and I could barely manage to pay the minimum amount due for my three credit cards. The figure was a result of all the purchases I made over the last few years that I wasn't able to fully settle. What's sadder was that the amount I owed didn't even give me any long-term investments since most of my debt simply piled up from my small ticket items.

I stopped using all my cards and resorted to using cash again. I also made it a point to pay the minimum amount due for all three of my cards every month just so my debt wouldn't balloon. The problem with my strategy, however, was that it was only a temporary fix. I had to approximately pay a P2,000 minimum amount due for each card just to keep myself from being charged with more interest, so that was a total of P6,000 a month—not a small amount for someone who's living in one of the most expensive cities in the country.

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Since I can only pay the minimum amount, too, I wasn't really making a dent on my overall debt and was just basically paying off the interest. 

I realized that I badly needed to fix my financial mess when a family emergency happened. Around 2018, my mom suddenly had to be hospitalized and needed help with her bills. I'm the eldest in the family so of course, I took it upon myself to shoulder the fees. The eagerness was there. The money, however, was not. 

I remember sitting in the hallway of the hospital and breaking down when I realized that I actually did not have the means to help. My monthly paycheck was barely enough to cover the necessities and the minimum fees I was trying to pay. I only had P3,000 in my bank account and no savings at all. The calls from collection companies had become a regular thing. 

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Fortunately, relatives and a very timely 13th month pay helped the situation with my mother. It didn't change the fact though that I felt useless and helpless over my financial status. When I was young, I had the perception that I would be someone who could easily help my family in case of financial emergencies, but it was obvious that I failed. That was when I decided to roll my sleeves and get to work. 

How I paid off my debt

The first thing I did was to check all my financial records. I listed the interest rate of each credit card and decided to prioritize paying off the one with the highest interest. I created an excel sheet for it and computed how much I should pay every month to slowly lower the amount I owe AND how much I should expect to be added to my debt in case I couldn't meet my target payment for the month. 

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Next, I took on extra jobs since it was obvious that my regular one wasn't going to pay for everything I owed. My luck is that I am a writer, so it was quite easy for me to apply and earn since it is one of the most in-demand freelance jobs in the country. By the time I was 29, I was juggling five writing jobs in total, on top of my full-time work.

I also had to make serious adjustments to my buying habits and lifestyle, of course. My new motto became: If the bills in your wallet can't afford it, don't buy it. I reverted to using cash for all of my purchases. I kept one credit card in my wallet, the one with the lowest limit, in case of emergencies, and hid the other two. 

The side hustles really helped a lot in my overall lifestyle, too. Since I had so many projects to finish, I didn't have a lot of time to go out so the temptation to splurge wasn't as intense. I made sure to think of the money I was earning as "not my money" but "my credit cards' money." That alone made it easier for me to avoid using it. A few months after I started the habit, I was paying about P20,000 every month for all my credit cards. When I got my thirteenth month, I used half of it to pay off my debts. I also applied for a government loan from SSS and used it to pay the banks. 

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That may sound counterintuitive, but it actually worked for me. The way loans for SSS works is that the ceiling amount you can borrow grows every time you apply for a loan. That means the more often you borrow, the higher the amount you can be granted in the future. As for its interest rate, it is also a lot lower than that of banks'—plus companies usually allow the monthly payments to be taken automatically from your payroll so you can't miss a payment. Thanks to that, I was able to pay a significant chunk of my debt (and lessen the amount that is still being charged interest) in exchange for a small monthly fee for my new loan. 

It took me about a year to finally be debt-free. There were months when I couldn't pay as much as I wanted because a different financial obligation popped up, but overall, I was proud to settle everything in a little over a year. When I walked out of the bank after paying the last of what I owed, the first thing I did was to call the banks to cancel two of my credit cards. I can still remember how it felt when I said "No, thank you," after the agent on the other end of the line tried to talk me out of canceling my membership. I even went as far as dramatically cutting my cards before throwing them in the trash. 

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I still have one credit card right now, the one that I decided to keep because it helps me earn points that I can convert to miles whenever I use it—which is not that often. I still stand by my rule of paying everything in cash, and even when I swipe sometimes (for the sake of earning points), I make sure to immediately pay for it a day after my purchase so I don't get backed up.

Another good thing that I got out of the whole experience is the total shift in the way I handle money. Since I spent a good year or so easily giving away thousands of bucks to banks, it's easy for me to put the same amount away every month now. The only difference is that instead of it being used to pay off my debt, it goes straight to my savings account. 

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I don't really regret what happened, as cliche as it may sound. Sometimes, you do have to hit rock bottom so you can be forced to improve, and that's exactly what happened to me. I honestly don't think I'd have a good understanding of money if I didn't go through what I did. My number one advice is to always think thrice before you swipe. 

***

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