The Basics

I got a call this weekend from a friend of mine who wanted to share some good news. On Friday, she was called in for an unexpected interview and then offered a new position- one making more money than she’s ever made before.

This friend has been underemployed for quite some time. She’s been working as a manager at a comic and games shop (funny, when we were teens, that seemed like a dream job), but it doesn’t really pay the bills.

She has some major credit card debt from when she quit her job a few years ago to start her own business. At the time, she’d been in a relationship for 10 years or so and her significant other said- quit your job, follow your dream, I’ll cover the bills. 8 months later, he said he wanted out of the relationship. (He is not a bad guy, just one with bad timing.)

Since then, while he did not kick her out of the house (they have other roommates, too), she has had to slowly take over paying her own bills. Bills, combined with debt, combined with still needing supplies to keep up with her freelance clients and doing work on spec (she’s an artist), making what an indy comic shop can afford to pay just isn’t getting everything paid. She’s been worried about coming up with grocery money.

So now, she has this great new job. It’s a contract job, with the contract set to last one year. (We live inSeattle, contract jobs are pretty normal.) She did the math, and she thinks that if she keeps living lean, she can pay off all of her credit card debt in one year.

And that’s where I come in. She called me to ask- pay of debt, or build up savings? All of her debt is at 18-23% APR, so it’s costing her a lot of money to just be making minimums. And I agree with her, she needs to get that paid.

But she also needs to be able to hedge against future emergencies.

And this is where I gave her some pretty standard personal finance blogger advice.

I said, to start, she should split her “extra” money 50/50 between savings and debt. Once she got her savings up to $1,000, then she should throw everything at the debt. But having that $1k in the bank means she’s less likely to have to turn to the credit cards again while she gets them paid off.

And, if at the end of her contract it’s not renewed, she has $1k in the bank to finish paying off the credit cards or to help see her through to another decent job.


In addition, it looks like she’ll be joining me on the debt payoff boards I frequent, where she’ll get more support and viewpoints besides my own.

I’ve told her I would be more than willing to sit down and help her create a budget, but that she needs to track her spending for a few weeks first, so that we have all the data.


I’m honored that she turned to me for advice. And I can’t wait to see her make progress on taking her financial live back under control.