How My FOMO-Based Spending Landed Me In $10K Of Debt
FOMO, also known as the “fear of missing out” is that anxious feeling you get when you think you’ll miss out on something legendary if you don’t go to parties A, B, and C, or have products X, Y, and Z.
For me, FOMO is the bane of my existence, my biggest weakness, and the main reason why I’m in so much unnecessary debt. I emphasize unnecessary because I’m one of the lucky ones. I didn’t have to take out student loans to pay for school, or live off of mac and cheese to ensure I had enough money for textbooks and rent. My parents supported me throughout university (shout out to the best parents in the world, please don’t shoot me when you read how much debt I’m actually in), and I really shouldn’t have this much debt.
But I was 22, living in downtown Toronto (Canada), and working at a job actually relevant to my degree! Sure, the company only paid me enough to afford ice chips and air, but I was high on life and had three credit cards with relatively low balances.
If you’ve ever moved to a new city without knowing a single soul, you say “hell yes!” to every event or party, even if you already know you’ll probably hate every minute of it. You just never know what you’ll miss out on if you don’t go. What if Drake shows up? (Unfortunately, he never did.) Or what if you actually meet friends you like?
For an entire year, my life was $30 brunches every Saturday and Sunday, $200 music festivals, $50 dinners a couple times a week, a $2,000 trip to Europe, a $1,000 trip to Vegas and of course, a closet full of new clothes to wear to all of it. I was so scared of missing out that I found myself with three almost maxed out credit cards and more than $10,000 in debt.
I didn’t even think this was a problem! In my head, compared to my friends, who are more than $40,000 in debt, this was a measly amount and I was totes kewl. It wasn’t until I started working for a financial comparison website (how ironic) that I realized I had to turn things around. Everyone I worked with had money in the bank, money invested in stocks or mutual funds, and had already started saving for retirement! Suddenly, being 23 and prioritizing clothes and “experiences” over savings or having any plan for my financial future no longer seemed totes kewl.
Luckily, I work for a company that is all about financial literacy, and I had a wealth of knowledge available to me at my fingertips. So here’s what I did to get my financial life back on the right track.
1. I faced my financial fears!
I made myself grow up and look at my financial statements. You can’t create an action plan if you have no idea where your money is going. Living in denial might temporarily ease your anxiety, but it’ll only haunt you in the long run. And to ensure you’re staying on top of your finances, I recommend using a budget-management app like Mint. It will track all of your spending, and make you feel just guilty enough to change your bad habits. Seeing more money coming in than going out each month has been a personal high for me. #MintGoals
2. I stopped paying high-interest fees.
I racked up a lot of debt on my credit cards, which have ridiculously high interest rates. So every payday, even though I was contributing more than the minimum requirement to my balance, a ton of it was going to interest. My actual debt was getting reduced at a baby snail’s pace.
After facing my financial fears, I did a lot of reading and discovered that consolidating my debt with a much lower interest rate was a no-brainer (for me, of course, not necessarily for everyone). I decided to go to my bank and apply for a personal loan. After one visit, I was pleasantly surprised to learn that I had excellent credit and was eligible for a loan with an extremely-favorable interest rate that covered almost all my debt. I was saving at least $100 in interest every month. Automatic monthly payments were set up, and I was told that I would be done paying in four years. I didn’t love that lengthy timeline, but I was moving in the right direction. After a few months of mindful spending, I realized that I could contribute more than the required monthly payments and managed to cut down my debt repayment timeline to one and a half years. #YayMe
For the remaining balance, I looked into balance transfer credit cards. These are credit cards designed to attract new customers who have credit card debt by offering low balance transfer interest rates on the debt you move over from your current credit card. I went with a low-interest balance transfer credit card that offered me a 0.99% annual interest rate on balance transfers for six months and with absolutely no balance transfer fees. This was great for me, because the short time period really forced me to buckle down and pay it off within the given six-month period.
3. I stopped giving FOMO so much power over my finances.
As I mentioned earlier, my biggest weakness is FOMO (potato chips are a close second). I needed to find a way to combat this feeling so that clothes, brunch, and music festivals weren’t constantly draining my finances. I stumbled upon this great Lifehacker post on how to overcome #FOMO, and according to the article, it boils down to three key points:
“Accept that things are happening without you.” In the past, even though I was exhausted from work or other things, I would force myself to meet up with friends. But now, I’m 100% satisfied and overjoyed staying in with dinner at home and Netflix. I save myself at least $100 every time I say “no,” instead of “hell, yes!”.
“Block the distractions.” I’m not going to lie, my phone is a permanent fixture in my hands. I get anxiety being a centimeter away from it. BUT I’ve gotten better when it comes to constantly checking out my social feeds. I now check Snapchat 99 times a day instead of 100 times a day. It’s a slow and steady battle to cut back.
“Relish the present.” At some point in the past year, I noticed I was constantly distracted and had a difficult time being present. Reading some books on being more mindful helped, but employing the no-phone rule during specific activities changed the game for me. My friends, family, or books have my full attention — well, at least until something legendary happens that must be documented on Snapchat.
Employing these strategies has me feeling pretty good about myself. I’m on track to be debt-free by the end of the year, and (drum roll please) I have savings and contribute to a retirement fund now. I’m not completely reformed, but I’m well on my way.
I still go for brunch occasionally, but if there are two things I’ve learned from this experience it’s first, that everything should be done in moderation. This means you don’t need to go out for brunch twice a week, every week. And next, that people having a blast on social media are probably not always having as much fun as it seems (or at least that’s what I tell myself in order to stay tucked in bed with my books and candles).
Kayla Reyes is a marketing professional based in Toronto who spends her free time stressing about her favorite sports teams, inhaling all the bread in the world and obsessing over her two-year-old nephew, Grayson. Follow her on Twitter and Instagram.
Image via Unsplash