In 2015, Credit Karma went to Austin and invited people to talk to us about their experiences with money and credit. We talked to people with many different backgrounds. Some were Credit Karma members, others were not. Participants were told in advance their stories might be shared online. These stories helped us understand the financial struggles that many people face. We thought they might help others too.
These are real stories, told by real people in their own words.
They received a financial gift for sharing their stories, but we want to take this time to thank them again. Check out our My Money Story series on YouTube.
Amelia is the media spokeswoman of an insurance company and she meets a lot of people who are scared of credit.
Why does she think this is the case? "People don't believe their best interests are at the heart of the (banking) industry."
Amelia comes from a family who, she says, sheltered her from financial information. "No one explained to me what an interest rate was and that if you didn't pay it off at the end of the month, you had to pay more the next month."
She also attended college during an era when it was really easy to get a credit card - and she didn't have the knowledge required to use it responsibly. She got married young and neither she nor her husband (who was in the military) had much income.
They also didn't watch their spending too closely - they had a mortgage, they had to buy a car to get to work and Amelia wanted to dress professionally for work, which meant buying a new wardrobe. Soon, they were "swimming in debt."
"If you've never been taught what a budget is ... it's really hard to know how to make smart buying decisions," Amelia says.
Although Amelia wasn't armed with the financial knowledge that she needed to get out of debt, she wisely decided to reach out to someone who did.
"I actually sought out a financial advisor and he helped us understand how to pay down our debt," she says.
How did they do it? It wasn't easy, but Amelia and her husband paid off the smaller credit card debts first - the ones that "only had $100 or $500 (on them)" - and then they started to pay off bigger debts in chunks. They also cut down their spending. There were no real shortcuts, but Amelia was really determined, particularly when they started a family (they now have three kids).
She made a conscious effort to save, pay down debt and not buy things unless they could afford them. Her family was a huge motivation, because Amelia didn't want to continue the cycle of financial dependence that she saw in her own mom.
"I want to be financially independent and even help my children so they can go to college, or start a new job, or invent something ... without feeling like something's holding them back."
So what's Amelia's advice for people who are scared of credit or managing their finances?
"Learn to ask questions and ask for advice. Seek out professional help. Believe it or not, most of it's free."
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