NerdWallet’s How Do You Do Money? series asks people from various walks of life to share their attitudes and approach to personal finance, with the goal of bringing transparency to discussions surrounding money. In this installment, we speak with Steven Sugrim, a 26-year-old gymnastics coach living in Toronto. This is how he conquered his credit card debt.
First, tell us a few details about your life.
I’m a national-level gymnastics coach. I’ve also started a dog-training apprenticeship and am looking to move into that field once my journey as a coach has ended. I went to university for two years for sociology/environmental studies/geography, but realized that wasn’t for me, so I took a year off. From there, I went to Humber College in Toronto for their pre-service firefighting program.
What prompted you to get your first credit card?
A friend of mine had gotten a student card, so I wanted one, too. My second card didn’t come too far after that. I was on campus, and there was a booth for student cards. My first card had a $500 limit, and the second card started me off at $1,500. With my mentality back then, I probably thought of these cards as “free money” rather than feeling a responsibility to pay them off.
Do you think it was the right decision to start using credit?
I was 19 or 20. Looking back on it, it definitely wasn’t the right decision for me. I was never provided with a financial education when I was growing up. Getting a credit card was the last thing I needed.
Growing up, how were credit cards and debt treated in your household?
I rarely saw my parents use cash. It was always swiping the debit or credit card — whether it was groceries or food or buying me clothes. I know both my parents had some sort of debt, but I’ll never know how much. But I do know it was quite bad especially for one of them.
I didn’t know any better. Growing up, I was always a little lazy in regards to working to earn my own money, and I never saved any of it. I understood the theory of it, but I never put it to practice, which I guess goes to show that I never truly understood it at all until now. I’m still increasing my financial education and learning daily through reading books, listening to audios of successful people, and attending events with like-minded people.
When did you start getting into credit card debt?
I started getting into credit card debt a few months after getting the cards. It didn’t help that my limit kept getting increased. There were no dire circumstances that caused it, other then I let myself get there. I had nothing to show for my debt, as most of the purchases were all fast food or other useless disposable purchases.
What was the most credit card debt you had?
At its highest, I hit $11,500 to $12,500.
What was the major turning point?
The turning point was getting sick and tired of being sick and tired. I just had enough of it and needed to change if I wanted to achieve the goals I set for myself in life. It happened a little over a year ago. The only way I was able to turn things around was by realizing I put myself there — no one else. And if I put myself there, I could get myself out.
What were some of the steps you took to get your debt paid off?
The first step was taking a full-time, salaried position as a coach. I was part-time, making an hourly wage, until July 2013. Then I took a look at where I spent my money, and from there it was matter of cutting what I didn’t need to spend on. I created a saving plan and went to the bank and got a consolation loan. I was paying $250 bi-weekly to the loan. And I would also transfer my savings over to the loan every time I hit $1,000 saved.
How long did it take to pay off your card?
It took me exactly one year — August 2013 to August 2014 — to pay off my consolidation loan of $11,500. I am officially credit card debt-free! It’s an amazing feeling knowing that I can save more money now [without the debt]. I can start moving in the direction I’d like to in life much more quickly.
What financial goals are you working on now?
I still have a little bit of other debt left to take care of — I got laser eye surgery last year. But it feels like it’ll be gone so fast compared to the debt I was just in. From there, I’m looking to save up and start making investments. I’ve been looking into the option of buying an ounce of gold every time I save up enough, and eventually I want to start to invest in real estate.
Did you do anything to celebrate when you paid off your card?
Actually, I did. A week before I made my final payment, my friend and I went out for steak and wine. It was well deserved!
Do you use credit cards now?
I still use credit cards, but it’s in a different way. There are certain things I’m a part of that require pre-authorized payments to come off of a credit card. So I use them for that, as well as for getting points for flights.
What advice do you have for others trying to pay off their credit cards?
If I could give any advice, it would be take responsibility for your own debt. If you’re blaming others for being where you are, you’ll never get out. You created the debt, you can get yourself out. Once you start taking the steps toward paying it off and develop a laser focus on getting rid of it, the debt starts to go down and quickly. If I did it, I believe you can, too.