Last night, as I do from time to time, I met with a GRS reader. Actually, Debbie doesn’t read this site but her sister does. And Debbie means to. Although I met Debbie’s sister last year at a Camp FI event, I’d never met Debbie before.

“So, what’s your situation?” I asked after our waiter had brought us each a glass of wine. “What do you want to know about money?”

“Everything,” Debbie said, laughing. “I feel like I don’t know much at all right now. I guess deep down, I know what I need to do. I just don’t do it.”

I nodded. “I’m like that with fitness,” I said. “I know what I need to do, but I just don’t do it. I know I need to exercise. I know I need to stretch. I know I need to eat better food. But for a lot of people — people like you and me — there’s a barrier between knowledge and action. It doesn’t matter if we know how to do the right thing. It’s the action that matters.

“I buy books about money but I never read them,” Debbie said. “I have Dave Ramsey and The Millionaire Next Door.”

“Those are both good books,” I said. Then, I shifted gears.

Looking for Purpose

“This might seem odd, but let’s talk about your goals. What do you want out of life? What are your big plans?” Our waiter brought Debbie a bowl of mussels and me a plate of pasta.

“I want to make the world a better place,” Debbie said. “I’m young. I work for a huge multi-national company. But I don’t believe in the company and I don’t believe in my work. I get paid $20 an hour to bring people coffee and water all day. I have a bartending gig on weekends. I want to do something that matters. Maybe improve our food system, for instance. I hate how people eat. I want more people to have better access to high-quality food.”

“That sounds like a noble goal,” I said. “How do you get there from where you are now?”

“I don’t know,” Debbie said. “It seems impossible. I have $80,000 in student loans but they’re in deferral. I don’t have to pay anything on them, but they still accumulate $600 in interest every month. How can I ever hope to catch up?”

“Yeah, that’s rough,” I said. “I used to be in a similar position. Twenty years ago, I had over $35,000 in credit card and consumer debt. That’s not the same as your $80,000, but it’d probably be equivalent to about $50,000 today. I carried that debt for a long time, just treading water, never getting ahead. I felt like I’d never get it paid off.”

“But you did it?”

I did,” I said. “I did it by creating a gap between my earning and spending. Fundamentally, there are only two things you can do to improve your situation. You can make more money or you can spend less. Ideally, you’d do both. You want as wide a gap as possible between what you earn and what you spend. Right now, it sounds as if you don’t have a gap. You have a deficit.”

Debbie nodded. I slurped down some noodles.

Two Familiar Foes

“How much is your rent?” I asked.

She looked sheepish. “I pay $1200 for an apartment in northeast Portland,” she said. She gave an address near where I lived after my divorce. “I know I should have roommates but I don’t. I don’t want the complications.”

“And what’s your take-home pay?”

“Just over $2000 per month,” Debbie said.

“Yeah, your rent is pretty high,” I said. “I mean, it’s not high compared to other places in Portland — it seems about average — but it’s high compared to your income. Nearly 60% of what you earn is going to housing. That’s a lot! The average American spends about one-third of their take-home pay on housing. So, that’s a great place to try to cut costs. Maybe not right now, but over the long term.”

“I like where I live,” Debbie said, prying open a mussel.

“You might want to consider roommates,” I said. “Aside from your housing costs, it doesn’t sound like the rest of your spending is outrageous. Honestly, if I were you, I’d try to find ways to boost your income. Especially since you hate your job.”

“I know,” Debbie said. “I’ve thought about that. I have a marketing degree that I’m not using. My current company offered to give me a raise and a promotion, but I turned it down. I would have been doing work that I hate even more. It would be difficult for me to be in a position where I had to represent a company I don’t like.”

“Why don’t you quit?” I asked.

“I did once,” she said. “But then I went back right away. I was scared to apply for new work. I don’t have much self-confidence. I mean, I’m 31 and have a marketing degree, but I don’t have any experience. Who would hire me?”

“I get the lack of self-confidence,” I said. “I totally get it. I struggle with that every day.”

“You do?” Debbie said. She seemed surprised.

“Yes,” I said. “Every day. Even today, I’ve been dragging around with my head full of negative self-talk. But here’s the thing: I’ve learned to just do the stuff that scares me anyhow.”

The Importance of Action

For some reason, our conversation turned to running. Debbie wants to run a marathon in two months, but she doesn’t feel ready. “Have you run a marathon before?” she asked.

“I haven’t run a marathon,” I said, “but I’ve walked one. Ten years ago, when I was fifty pounds heavier, I trained to run the Portland Marathon, but I got hurt. Instead, when the time came, I walked the entire thing.” I paused and pointed at my feet. “And I walked it in these hiking boots!”

“For real?” she said.

J.D. walking the marathon

“Yes,” I said. “Looking back, it was goofy. But I really wanted to complete the marathon, so for some reason I decided the best way to do it was just to have fun. Since I was too hurt to run, I walked in street clothes, as if I were out for a hike.”

“Anyhow, this kind of ties back to you looking for work. I could have easily decided to not do the marathon since I was injured. I could have given up. Instead, I found a way to do it. I know that applying for jobs sucks. I know you’re worried about rejection. But I think you should do it anyhow. Accept the fact that you’re going to get rejected. Screw it. Apply anyhow, and look at the whole thing as practice. Tell yourself that even if you don’t find a better job, you’ll be getting experience with interviews and the hiring process.”

I took one last bite of my pasta. “Really,” I said, “it’s all about taking action. Even if you’re scared.”

I told Debbie about my friend Mike. Mike is a software engineer who is happy in his high-paying job. All the same, once or twice each year he takes time off work to interview with other companies. He’s not actively seeking to leave his job, but he wants to stay sharp. He wants to see what other opportunities are out there. He wants to get practice interviewing.

Obviously, Debbie is in a different situation, but I think she can apply the same principles: Actively apply for other work. View the experience as an exercise, not a necessity. When she doesn’t get a job, she should follow up to find out why not.

Ultimately, I didn’t have any magic answers that could make Debbie’s money problems disappear overnight. As is often the case, she’s going to have to do a lot of hard work (and make some sacrifices) in order to improve her financial situation. She’s going to have to avoid falling into the forever fallacy, the mistaken belief that she’ll always be struggling at a job she hates while carrying a mountain of debt. Things will be tough for a while — but if she can make some course corrections, they’ll improve.

“Thanks for meeting me,” Debbie said as we left the restaurant.

“I hope it helped,” I said. I’m never convinced that these conversations are actually useful for the people I meet. Like I said, I too lack self-confidence.

“It did,” she said. “I’m going to get a new job.”

It Gets Better

My dinner with Debbie reminded me of a conversation I had last year with my friends Wally and Jodie. As I shared last August, this couple has decided to take control of their finances, but they started with less than zero. In fact, their situation is very similar to Debbie’s.

When I wrote about Wally and Jodie in August, their income and spending were qual. They couldn’t save anything. They had $35,000 in debt and were behind on a car payment.

I don’t know their exact situation today, but I know they’ve been working together to increase their saving rate. They don’t go out to eat. They don’t drink alcohol. They work constantly at multiple jobs.

“It sucks,” Wally told me last weekend. “We’re tired all of the time. We can’t wait for this to end. But you know what? You were right when you said that it won’t last forever. Already, we can see that. Last summer, we had no margin. Now we have an $800 gap every month.”

“Wow,” I said. “Nice work!”

“Yeah,” said Wally. “It’s very tempting to spend that money, but so far we haven’t. We’re using it to catch up on our debt. It’s only a matter of time before everything is paid off and we can go back to saner hours. It feels good.”

I love hearing success stories like this. I love seeing people taking action to turn their lives around. I believe strongly that Debbie can turn her life around too. She’s young. She’s smart. She’s engaging. She lacks self-confidence, but that can be faked.

If Debbie is willing to make a couple of big moves — reduce her rent and find a new job — I suspect that in six months or a year that she too will find that she has a gap between what she earns and what she spends. And when she creates this gap, her worries will diminish. (They’ll never go away, but they’ll decline.) In time, she will pay off her student loans, find work that she loves, and change the world.

Author: J.D. Roth

In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he’s managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.