This as-told-to essay is based on a conversation with Johanna Dickson, a 42-year-old who moved back to her parents’ house in New Jersey to help her pay off years of debt. The following has been edited for length and clarity.
Living in New York City was always a dream of mine. I grew up 90 minutes away in New Jersey, but after graduating from college in 2006, I landed a job in marketing that paid enough to afford my first Manhattan apartment with roommates. I finally felt like I made it when I moved into my own studio apartment in Harlem in 2021.
Over the 15 years I lived in NYC, I secretly incurred around $40,000 in credit card debt. In 2023, at age 40, I decided I needed to fix my finances. I moved back in with my parents and took a few other drastic measures to get back on my feet.
Here’s how I got into debt and what I’ve been doing to get out of it.
My relationship with money was stable before I moved to NYC
I grew up privileged in a two-parent home where both brought in income. My parents paid for college so that I didn’t have to take out any loans.
I got my first credit card from Victoria’s Secret in 2009 so I could establish a line of credit. I tried to keep the balance low and pay it off quickly, and then it became impossible. I was also an authorized user on my mom’s Nordstrom and Bloomingdale’s cards, and I was offered the chance to open my own, which I naively did.
What made it worse was that as I spent more, the credit card kept raising my spending limit. It made it easy to spend more and maintain a high balance. The balances became completely unmanageable.
I accumulated $40,000 in debt
Accruing that much credit card debt was awful and slightly embarrassing. I felt like I’d been given a real gift to not have student loan debt when I graduated from college. I threw it away by getting into credit card debt.
A lot of the debt was from keeping up with the Joneses through shopping when I worked in a fashion-adjacent job. I felt like I needed to wear certain brands and trends to fit in.
Making minimum payments never seemed like enough
I wasn’t trying to ignore my debt. I was always told that making minimum payments would help me pay off the debt faster. I was paying those, but because of the high interest, it felt like I wasn’t making a dent.
I work in publicity and have spent many years being underpaid. Even as my salary increased, my debt increased, because my bad shopping habits increased as well. Sometimes, if I got a bonus or a raise, I would reward myself by going shopping.
I didn’t have a savings account or an emergency fund
I would look at my monthly bills and try to see how to spread my paycheck to cover all of it, plus my credit card minimum payments, and that’s when I realized I didn’t have very much money left over, and no savings.
My dog was going through some health issues, and I racked up vet bills of over $700. It was so stressful trying to pull together enough money to pay that bill. I didn’t have any leftover money for food until my next paycheck, a week later.
It felt like I hit rock bottom.
Moving back in with my parents was the only way I could afford to pay off my debt
I never thought I’d move back home to my parents’ house, but honestly, it was better than having random roommates. I was tired of hustling so hard to live in NYC, and I wanted to be serious about paying off my debt.
I waited until my lease was up and moved in December 2023. I started making the 90-minute commute to work in the city two days a week and still earned my salary while saving about $2,500 on rent and utilities every month. I know it’s a privilege to have parents who can create a safe place for you, as mine did, and I’m grateful for that.
While my parents didn’t ask me to pay for anything, I still tried to pitch in when I could and cover food and other expenses.
I got rejected from a debt consolidation loan, but took another path
One of my best friends mentioned that she got out of debt by taking out a debt consolidation loan, where a company lends you money to pay off your credit card debt, and you pay off the consolidated loan. I didn’t qualify for any of them, but this was probably a blessing in disguise.
Instead, they suggested a debt relief program where the company negotiates your debt with the credit card companies and reduces it. They were able to negotiate my debt down to $31,000, plus their fees of around $2,000.
I’ve been paying $665 a month for the past five years
I entered the program with six credit cards and have settled four of them completely. I’m planning to make my final payment in August.
The hardest part of doing this was having to default on my credit card bills, which meant my credit score tanked. Every balance was sent to creditors, at which point my debt company could negotiate. This felt very strange.
I only have two credit cards now
As tempting as some store credit card offers are, I’ll never open one again. I use my two credit cards to help me rebuild my credit score, but I use them sparingly, mostly for groceries or gas.
If there’s something I want to buy but I don’t have the cash on hand, I’ll use a buy-now, pay-later service instead. I did this to attend my cousin’s wedding last year. I have a strict rule: I pay off the debt within the six installments and avoid the interest.
I’m still a work in progress with my spending
I’m an emotional shopper, and unfortunately, the last several years have not been great for my mental health. I use shopping as a distraction. I’m a work in progress, but I’m proud to have a game plan I follow every month.
I create a list of all my bills, how much money I have left over after my paycheck, how much needs to go into savings, and how much I’m left with after that. I really try to stick to that. If I overspend my budget, I work really hard to make up the money.
I’m planning to move out of my parents’ house this year
Spending this time at home has helped me bulk up my savings and stay on track with my debt payments. I’m worried about finding an apartment, but I’m hopeful because my credit score is slowly rising.
I’m planning to move to Washington state this year for a change of scenery and also because the cost of living is much less than in NYC. I’ll gain my independence back without sacrificing my finances.
Be transparent about your debt and search for options that make sense for you
I held onto my debt like it was a dirty secret, but when I decided to tell people about it, they helped point me in the right direction to get help. If you’re not ready to tell people, research your options. I didn’t know that debt restructuring programs existed until my friend mentioned it.
My dad said that he’s not proud of me for getting into debt, but he’s proud of me for realizing the problem and figuring it out. It took longer than I hoped, but I’m almost at the finish line.
