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In this episode, one woman shows us the worst money habits that got her in debt, and how she overcame them. Click here to learn about a major debt-related cautionary tale:

Through weekly video essays, "Making It Work" showcases how *real* people have upgraded their personal or financial lives in some meaningful way. Making your life work for you doesn't mean getting rich just for the sake of it. It means making the most of what you have to build a life you love, both in your present and in your future. And while managing money is a crucial life skill for everyone, there's no one "right way" to go about it — you have to figure out what works best for *you,* full stop.

Video by Grace Lee

Based on an article by Marissa Ricalde:

Video narration by Paige Moss

The Financial Diet site:

[PAGES FLIPPING] Anyone with debt probably has a long list of excuses for why they have it.

It wasn't until I was in my late 20s and fully analyzed my finances until I realized I was six figures deep in debt that compounded over the years, leaving me with very little room to breathe. I, too, had excuses.

It was easy to get caught living in the present moment, with little thought of how it would affect my future self. The past three years trying to get myself out of debt hasn't been easy, but I've identified several toxic habits that led me to my financial demise. By becoming aware of my behavior, I was able to purge myself of these bad habits and replace them with proactive ones to prevent myself from regressing.

Number one, not having a budget. Despite the simple concept of a budget, I never thought that I needed one, since I started working at 15 years old. I thought I was in control, thinking that, because of how little I earned, there was no need to track where my money was going.

But it was like being on a ship and not knowing there were several leaks until the ship was sinking. Before the start of my financial journey in 2018, I was part of the 30% of Americans who don't budget, with no budget or any short or long-term goals. I always thought that living paycheck to paycheck was the norm and that big expenses could be funded by credit cards.

But this thought process led me to a perpetual cycle of getting into debt and paying it back, only to rack up more debt. Number two, "do it for the gram" mentality. I was also addicted to Instagram, finding inspo from influencers who traveled constantly and posted beautiful content showcasing their adventures.

I'd browse through feeds for hours on a weekly basis, peering into the lives I wanted for myself. I was inspired to create perfectly curated feed to depict my lifestyle that I really couldn't afford, seeking validation for the sake of boosts and likes, comments, and followers. I followed a bunch of influencers and celebs, and this left me feeling like I had to buy into the hottest fashions and beauty trends and travel to faraway places.

After spending thousands on non-essentials, such as eating out, skin care, and travel, I had further spiraled myself into debt. Number three, using credit cards as an extension of my income. I was approved for several credit cards with attractive reward programs, and I got into the habit of using those cards as if they were an extension of my income.

I thought that meeting the minimum spend requirement of a couple of thousand to be able to redeem rewards could easily be paid back. But credit card rewards aren't rewarding if they lead to massive debt. Financial experts strongly advise against doing this, as individuals can easily rack up large balances for the sake of reaping the rewards.

I became comfortable with the minimum monthly payments because, at the time, it was affordable. But this changed after a repeated cycle of thoughtless spending and quickly escalated to high credit card balances, and I was paying hundreds in interest. Number four, not having an emergency fund.

I also used credit cards as a funding source for any emergencies, which is also what 37% of Americans would do, according to a survey by Bankrate. I had nothing saved for an emergency, and I was also reaching my credit limit. This method of funding became extremely costly because I wasn't able to pay off my balance, and the high-interest payments started to add up.

What's worse, if I lose my job, I'd be in no position to be able to cover any of my expenses, which left me anxious and in a vulnerable position. Number five, prioritizing wants over needs. Impulse buying was the root of my reckless spending.

I never gave much thought to prioritizing needs over wants because I thought I could afford them all. With no goals or a budget, I justified the things I wanted if I felt the purchase was increasing my quality of life. If I'm going to take up running, I'd better get the best shoes, no matter what the cost.

Or, I better travel now. Life is too short. I felt justified.

But this quickly spiraled into debt that I thought could easily be paid back with future income. Number six, overspending on my kid. As a parent, I want to be able to give my son the world.

And part of this was the desire to give him the luxuries that I didn't have growing up, especially when it came to experiences such as travel. In a survey by Credit Karma, 53% of parents borrow money to pay for non-essential items or experiences for kids. Despite thinking I had the best intentions, the debt I racked up because of this prevented me from being able to save for an emergency or a college fund and start investing.

Number seven, waiting to invest. Speaking of investing, I always thought that it was something for the rich or that I needed to hire a broker to even be able to start. Although this might have been true back when I was still going to college, it no longer applies today, as investing has become much more affordable and accessible within the last 10 years, made possible through robo-advisors and mutual funds.

By blowing my money away on wants over needs and racking up significant amounts of high-interest credit card debt, I lost out on years of reaping the benefits from the magic of compound interest. If I could go back, I'd tell my younger self to step back and think about how my spending choices will limit what I'm able to do in the future. Although getting caught up in all these bad habits has set me back financially, I now feel empowered in being able to take control of my outcome and continue my journey towards financial independence.

It's taken a lot of self-discipline and awareness to avoid these habits. And by doing so, I was able to reach two important milestones-- aggressively pay down debt within the past two years and save an emergency fund that's big enough to cover basic expenditures for at least six months.