Conquering Debt: A Journey of Financial Resilience

Simone Abrahamsohn, a resident of Toronto, shares her personal story of navigating the challenges of financial hardship and her determination to regain control over her finances. This First Person column delves into her experience with personal bankruptcy, reliance on high-interest money lenders, and the strategies she employed to break free from the cycle of debt.

Unlocking the Path to Financial Stability

Falling into the Debt Trap

Simone's financial journey took an unexpected turn when she found herself in a cycle of personal bankruptcy and dependence on money lenders. After declaring bankruptcy a few years ago, she was no longer allowed to have a credit card, leading her to rely on alternative lenders when she faced cash shortages. The process seemed straightforward, with higher interest rates and a two-week repayment period, but it soon became a self-destructive habit.As Simone shifted to part-time work to become a full-time caregiver for her brother, her financial situation became more precarious. Wanting to feel "abundant" and not stress about coming up short for gifts during the holiday season and birthdays, she found herself hopping from one money lender to another, spending more time at those outlets than with friends and family. This obsessive habit had a significant impact on her well-being, causing sleep issues and chronic fight-or-flight symptoms.

Recognizing the Need for Change

Despite the high interest rates, which Simone had hoped would be enough motivation to quit the habit, the combination of part-time employment and the short repayment periods made it challenging to pay back the loans. She soon found herself caught in a vicious cycle of borrowing from one lender to pay off another, feeling disheartened and ashamed of her rapidly mounting debts.Determined to break free from this cycle, Simone decided to seek help from the credit counselling trustees who had assisted her with her previous bankruptcy. In her conversations with the trustee, she realized that her reliance on money lenders stemmed from a desire to have an extra cushion of cash for holiday spending, birthdays, and other occasions, chasing the feeling of "abundance."

Developing Sustainable Strategies

With the guidance of her trustee, Simone learned to separate her emotions from her financial decisions and view money as a practical tool. She began to explore more sustainable strategies to achieve her financial goals, such as budgeting, saving, and gradually re-establishing her credit.Simone started following YouTube money influencers who used visual aids like colored envelopes and files to help her ADHD brain better understand her savings goals. She also became more mindful of her spending, opting for more modest celebrations and coffee-and-cake outings when she couldn't afford to participate in more extravagant birthday festivities.Additionally, Simone's trustee encouraged her to obtain a secured credit card, which allowed her to control the borrowing amount and gradually rebuild her credit. She also focused on meal planning and regular grocery shopping to avoid the temptation of relying on expensive food delivery services.

Embracing a Debt-Free Future

While Simone acknowledges that she is not yet as close to a "clean slate" as she would like, she is in a better place with her finances. She has realized that the initial thrill of immediate gratification from debt is not worth the long-term consequences of a poor credit rating and mounting debts.Simone's journey serves as a testament to the power of resilience and the importance of seeking professional guidance when navigating financial challenges. By adopting a pragmatic approach, separating emotions from money, and implementing sustainable strategies, she is well on her way to regaining control over her finances and building a brighter, debt-free future.