Let me explain how I went from making $25,000 a year to roughly $100,000 a year with no significant changes in my lifestyle — and why that’s the case for so many of us millennials.
When I moved out on my own, I was 18. I took on debt quickly — so much debt. I got credit cards, personal loans, auto loans, apartments I couldn’t afford, student loans, etc. I was paying my bills, but eventually all of those monthly payments added up to more than what I could pay, and I fell behind with really no way out. (This is a cycle that keeps repeating in my life.) By 19, I had thousands of dollars in debt and poor credit.
Within three years I was married and had two children. (In retrospect, I would have been more responsible about this decision.) I thought we were doing things the “right” way, or best way, considering the circumstances. This was during 2009 to 2010, and we were doing OK — the economy had tanked and everything around us was affordable. A 1-bedroom apartment was only $800 a month. (That same apartment is $1,700/month, today.) I began paying off our debts and re-establishing our credit. I was completing classes for us and even finished a nursing program. Things were good.
Then, he left.
I was making $1,300 a month and I couldn't afford rent. My kids and I stayed in shelters until we were approved for a section 8 housing voucher. This was around 2011. My housing was paid for, food was paid for and healthcare was paid for. I received extra money for school supplies and transportation to and from school. My below $20,000 annual income, was more like $60,000 with the subsidies I was getting. Section 8 is something people wait years for; I got it after just four months. We were fortunate.
Meanwhile, I finished school in 2013 and became a teacher. I began making $52,000 year and no longer qualified for food stamps, free healthcare or help with textbooks and transportation expenses. But I still qualified for section 8. I was now paying $1,200 a month. It was too much for my teacher salary, and over the next five years I began, again, to take on more debt, increasing my monthly payments.
As I moved up in my career from teacher to curriculum coach/specialist, assistant principal and then to principal, eventually the subsidies were no longer provided at all. By 2018, my monthly net salary was $300 less than my expenses. Years of low wages added up.
$60–75,000 should be considered extremely low-income for a family in Los Angeles, but somehow folks were convinced I was middle class because I had two master’s degrees and was school administrator. But the truth was, I lived a “middle class” life that I couldn’t afford. By “middle class life,” I mean, I rented a home in a nice neighborhood and had a car. We had all of the necessities that I had to borrow for each month. But it wasn’t sustainable because $75,000 for a family in LA is not middle class. You can’t afford the bare necessities (healthcare, housing, education and food) without incurring more debt. I learned the more debt I incurred, the less money I was actually making.
I downsized to a two-bedroom apartment with the hopes that I could get a handle on the six years of debt I had incurred. So, instead of paying $3,000 a month, I was paying $2,600. I fell further behind. I have over $250,000 in debt and I pay roughly $2,000 a month to that debt balance. This will prolly never be paid off because of interest.
This is the reality for so many of us. We financed a whole ass decade because no one taught us any other way, or in many cases, there was no other way.
Now, here I am, with a doctorate, a career as a principal and making roughly $100,000 year, still in debt. In August, I decided to start over. I moved in with my mom and brothe, and I share a room with my kids. I was better off eight years ago when I was “poor." Anyway, I’m digging myself out of this hole, now. I’m fortunate I have somewhere to lay my head while I clean this slate.
The cost of living is only becoming more unattainable, though. I’ll never be able to pay this debt off and live comfortably. Who knows if I’ll ever pay off this debt. I think this is a lifelong sentence, y’all. The bubble is bursting and here we are.