How Debt Started My Quest Toward Financial Literacy

Financial Literacy Awareness MonthIf you didn’t know, April is National Financial Literacy Awareness Month.  That is correct, it is legit!  I have done a lot of things with money, both good and bad, so I am slowly making my way toward great financial literacy.  I wanted to talk a little about my quest toward gaining knowledge about finances.

My parents laid a great foundation for my financial knowledge.  They taught me how to save, how to spend, and how to treat consumerism.  I really appreciate their hard work and all of the knowledge that they passed to me.  It was a great help.  Unfortunately, though I had the tools, I didn’t use them properly in college.

My First Credit Card

I went into college with good financial skills, yet that all changed when I got my first credit card.  You know the ones I am talking about.  I think I got a nice free shirt and the bank ended up getting thousands of dollars worth of interest payments.  Nice trade-off, huh? 😉

My credit card gave me the power to indulge and enjoy my college life a little more.  With that power comes great responsibility, one that I took too lightly.  I saw the low minimum payment and never really thought too much about the overall balance.  As long as I was paying that minimum payment, I was fine.  Oh was I wrong.

Bitten by the entrepreneur bug

While in college, I was bitten by the entrepreneur bug.  My parents and other family members had been bitten by that bug prior, so I guess it is just natural.  I love business and being an entrepreneur.  There is nothing better than building a business from scratch and watching it grow.  This happened for me in college.  I started an online electronics store and ran it for 4 years.  The biggest problem is that I was funding my business all on my credit cards.  This was the worst mistake I made in my business and with my finances.

My Redemption

In 2009, I decided to stop running my business.  It was a tough decision, but it was the right one at the time.  All said and done, I was in the hole $50,000.  That’s right, I had $50,000 worth of credit card debt just between my business and my outlandish spending issues.  I had been paying the minimum payments for years.  I might have had a few months were I paid an extra $20 or more, making myself thinking that I was doing the right thing.  That thought all changed when I finally started to put the numbers together.

After putting everything into a spreadsheet, I realized that I was in trouble.  I had forgone everything that my parents taught me about money and lived on plastic.  I had borrowed so much of someone else’s money, that I didn’t know what to do.  Luckily, my wife is a very knowledgeable woman and told me to just start paying down the money and figuring it out.

I worked hard to get a plan for myself and I picked the avalanche method to pay down my credit card debt.  My first big payment toward my debt was the redemption day.  I was turning my life and finances around.

My Quest toward Financial Literacy

It took me 4 years to pay off my $50,000 of credit card debt.  The last payment on my credit card was the day that I vowed I wouldn’t be back in credit card debt.  I took that pledge to myself in order to gain a better knowledge about not only my finances, but finances in general.  I had learned a low by going through the debt cycle and figuring out how to dig my way back out.  I think many people learn by doing, but we need to learn how to teach people before they take on debt.

Debt is dangerous and can swallow you in an instant.  I think this is the type of lesson that needs to be taught early and often.  Though my parents taught me about money, I didn’t follow their advice.  I want to make sure that I lay a great foundation for my son in order for him to make the right decisions about his finances.  While he might do the same thing as me, I can at least give him the framework to make the proper decisions.  I also plan on showing him the struggles that I went through in hopes that he will not repeat.

Looking back, I wish I would have just followed my parents advice, but I can’t go back.  I can only look forward and that is what I plan on doing.  I plan on growing my money, making my money work for me, and getting my retirement picture built early, so I can have a choice when I grow older.  That is my plan and that is my quest to the ultimate goal, Financial Literacy.

If you are in debt and need help, then check out my personal finance resources for great tools to help you gain control.

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Grayson Bell

Grayson Bell

I'm a business owner, blogger, father, and husband. I used credit cards too much and found myself in over $75,000 in debt ($50,000 in just credit cards). I paid it off, started this blog, and my financial life has changed. I now talk about fighting debt and growing wealth here. I run a WordPress maintenance and support company, along with another blog. It is Empowered Shopper, which helps people get information about products they want to buy. You can also check out Eyes on the Dollar, which is a great blog that I co-own.


  1. April 17, 2013 at 6:46 am — Reply

    Fortunately I think that by not following your parents advice you have actually learned a more valuable lesson.
    A lesson learned is far more valuable that a lesson taught.

    • April 17, 2013 at 10:32 am — Reply

      Quality point Glen. Unfortunately, I had to learn the hard way, but it was a great lesson learned.

  2. April 17, 2013 at 7:11 am — Reply

    You have a great “testimony” of overcoming debt, and that starts with financial literacy. I’d say that since graduating college and buying a home (and subsequently have a lot of debt to pay down) I have been more motivated than ever to pursue financial literacy.

    • April 17, 2013 at 10:32 am — Reply

      I am motivated to pay down debts quickly now. I don’t like making minimum payments, except for my mortgage because we are moving. I want financial freedom.

  3. April 17, 2013 at 7:26 am — Reply

    You’re right, debt is super dangerous. Congrats on overcoming it, and thanks for sharing your story!

    • April 17, 2013 at 10:33 am — Reply

      Thanks Greg and I appreciate you stopping by.

  4. April 17, 2013 at 7:26 am — Reply

    Grayson, thanks so much for sharing. The most profound line to me in this article was: “Debt is dangerous and can swallow you in an instant.”

    Isn’t it the truth? It happens before you even know it, often, and then you’re stuck for years paying it off. So glad you figured it out and are free from the burden. We can’t wait to be in your same place. 🙂

    • April 17, 2013 at 10:33 am — Reply

      It is so true. It swallowed me without me blinking an eye. I didn’t even realize it until I tried to get out and found out that I was buried with no lifeline.

  5. April 17, 2013 at 8:00 am — Reply

    “Debt is dangerous and can swallow you in an instant.” Great point Grayson! I could not agree with you more. I remember just feeling like I was being smothered and could not get out. It sucked going through it (putting it lightly) but the lessons I’ve been able to learn are ones I can carry and hopefully pass on. Thanks for sharing Grayson!

    • April 17, 2013 at 10:34 am — Reply

      I remember getting out of it John and it did suck. I learned a valuable lesson from it, but I don’t want to repeat it.

  6. April 17, 2013 at 8:20 am — Reply

    So many “I hate to admit, but mum was right” moments! As young adults it is normal to be rebellious of old people’s wisdom, financial and otherwise. Glad you still had an early wake up call and were able to get back on track.

    • April 17, 2013 at 10:34 am — Reply

      We learn from our parents, but sometimes we don’t want to admit it. I will easily admit it now.

  7. April 17, 2013 at 9:42 am — Reply

    It’s interesting how much we have in common on this one. I was deeply in debt even before I finished college. It was only the year of my life that I made nearly nothing that I woke up and changed my habits.

    • April 17, 2013 at 10:35 am — Reply

      I am with you Joe. Many people are sparked for change in different times of their life. I am just glad that I learned it early enough to change my habits for the better.

  8. April 17, 2013 at 11:14 am — Reply

    Thanks for sharing. Luckily my parents, laid a good foundation as well and I managed to avoid most of that. But I know the temptation. Running a business can be tough, because it’s yours, it’s more personal and one of the hardest things to do is quit and admit that it didn’t go as well as planned. It takes courage to know when to quit. Congrats on paying it off and turning it around!

    • April 17, 2013 at 11:16 am — Reply

      It was very hard to quit my business that I had built, but I knew it was the right move.

  9. Sicorra
    April 17, 2013 at 11:41 am — Reply

    Looking back I can say that my parents were very good with money but it didn’t trickle down to me when I needed it most. For the first 20 years of being on my own I was fine financially but then I chose to go into business for myself and I financed the purchase of the business with credit. That combined with no longer having a full-time job, and I was hooped.

    • April 17, 2013 at 11:48 am — Reply

      I financed my business with credit cards as well. That was a horrible decision that cost me dearly.

  10. April 17, 2013 at 11:47 am — Reply

    The free tshirt gets ya every time!

    It’s great to share the fact that paying the minimum really doesn’t do much to help credit card payments/debt. A lot of my friends have casually mentioned just paying off the minimum amount and it’s hard not to shake them and scream, “ONLY PUT ON YOUR CARD WHAT YOU CAN PAY OFF IN FULL!” But social norms won’t let me. *sigh*

    Reading all these stories today have been inspirational, but paying of $50,000 of debt in 4 years? Damn! Props to you!

    • April 17, 2013 at 11:49 am — Reply

      I wish someone would have shaken me a bit and said that. Stupid social norms. Thanks for the compliment. It wasn’t easy, but I just dug in and did it.

  11. April 17, 2013 at 1:41 pm — Reply

    Thanks for your participation and sharing your story, Grayson. I really appreciate it! “My credit card gave me the power to indulge and enjoy my college life a little more. With that power comes great responsibility, one that I took too lightly.” So many of us fall into that trap where we can finance a lifestyle that we never imagined through those magical cards and don’t recognize how much power they have over our lives and well-being. You learned a hard lesson, but also got yourself out of debt too. You’ll have a lot of great lessons to share with your son and he will be better for knowing your journey to financial freedom.

    • April 17, 2013 at 1:47 pm — Reply

      Thanks for putting this on Shannon. It was great to participate. Credit cards are a powerful tool when used correctly, but they are also powerful when used incorrectly. I wish I didn’t have to learn the hard way, but alas.

  12. Girl Meets Debt
    April 17, 2013 at 2:07 pm — Reply

    Right now I have about the same amount of debt that you had and I am hoping to pay off $50K in 4 years as well. Won’t that be a great 34th birthday present to me? 😉 Our stories are somewhat similar in that your wife sounds exactly like J! Thank you for sharing your story and for being an inspiration for me in my debt repayment journey Grayson 😀

    • April 17, 2013 at 3:10 pm — Reply

      Glad that I can be an inspiration. If you ever have any questions, please let me know. I know what you are going through so I might have some advice that could work. Keep on rocking the debt destruction.

  13. April 17, 2013 at 3:07 pm — Reply

    Paying off $50,000 in 4 years is quite an accomplishment. Thanks for sharing your story!

    • April 17, 2013 at 3:11 pm — Reply

      Thanks Mackenzie. I appreciate the compliment.

  14. April 17, 2013 at 4:12 pm — Reply

    If you’re anything like me, you were feeling pretty optimistic and savvy as you racked up cc debt to build your business. Business debt can be the sneakiest of all because you’re running that card and telling yourself it’s an investment that’s going to pay off big time.

    Congrats on getting rid of all that debt!

    • April 18, 2013 at 9:26 am — Reply

      Yep, that is exactly how I was. I knew that it was an investment and it would have paid off, but the business started affecting my marriage and my health. That was something that I didn’t want to deal with.

  15. April 17, 2013 at 4:25 pm — Reply

    I am still bitten by that bug. My wife and I tried something online but we pulled the plug after running up about $23-24k in debt. But add that to everything else we owed and we were up to $67k in total debt. I know the feeling but at least you learned from this and made a promise to yourself to stay out of credit card debt.

    • April 18, 2013 at 9:27 am — Reply

      That bug bites often for me. I have learned to not pull out the credit card anymore. I fund my current business on whatever is in my Paypal account. If I don’t have the money for something, I will wait or figure out a free solution. Good luck Alan.

  16. Nick @
    April 17, 2013 at 3:26 pm — Reply

    Thanks for sharing your story Grayson. It is interesting that a lot of the articles in the carnival talk about the need for being taught financial literacy, but you bring the perspective of someone that was taught and still screwed up like the rest of us. I guess at the end of the day all the teaching in the world can only go so far.

    • April 17, 2013 at 3:44 pm — Reply

      Thanks Nick. Yeah, I was a stubborn ass. I didn’t want to listen to my parents. How could I do what they did? Looks like they were right all along.

  17. April 17, 2013 at 8:52 pm — Reply

    Congrats for getting debt free!! I can’t wait for our day! Thanks so much for sharing your story and helping increase awareness !

    • April 18, 2013 at 9:27 am — Reply

      Thanks Catherine. Good luck on getting to your day.

  18. Justin
    April 17, 2013 at 10:01 pm — Reply

    Debt is dangerous and I cannot wait until I’m out from under that precariously perched boulder.
    I think that it’s awesome that you were able to pay down your debt so quickly. Hopefully someday I’ll be able to tout my success rather than planning for the day.

    • April 18, 2013 at 9:28 am — Reply

      You will have the day when you can tout your success. The journey is difficult and there are many temptations to stray. Just stay the course and you will succeed!

  19. April 17, 2013 at 10:50 pm — Reply

    Ah yes, I have had my share of ups and downs with money but now that I have a better understanding of it I’m much more careful with it and more cognizant of the purchases I make.

    I didn’t attend college but when my husband and I first got together we were given a credit card to start off with and we tore threw it. Like you, we thought as long as we paid the minimum what could go wrong. Little did I know that was probably the beginning of the end for us financially speaking.

    Enjoyed reading your post.

    • April 18, 2013 at 9:29 am — Reply

      Thanks for stopping by Corina. Paying the minimum is a fantasy pipe dream. You think you are doing the right thing, but you are really just doing nothing. Those payments just pay off the interest for the most part.

  20. April 17, 2013 at 11:32 pm — Reply

    Thanks for sharing. Sometimes our parents can teach us but it’s up to us how we interpret and use that education from them. It’s bittersweet that you learned about debt young and paid it off as fast as you could. I bet you won’t be making those types of decisions ever again. Running your own business is a great idea especially if you have the drive, the hard part is having the funds before diving in. Cheers mate!

    • April 18, 2013 at 9:30 am — Reply

      Yeah, parents do teach valuable lessons, but we still have to put their lessons into action. Running a business is exciting, but it can be bittersweet. I love being an entrepreneur, but it comes at a cost.

  21. April 19, 2013 at 1:02 am — Reply

    Debt, my own and my parents’ debt, has definitely motivated me to become more financially literate and aware. I only wish I had started sooner!

  22. April 19, 2013 at 7:38 am — Reply

    A really well crafted write up Grayson! I could absolutely relate with the feelings regarding “first credit card”; it was quite the same with me and I guess it’s so with most of us! Anyways, would like to thank you as your story took me even further in my financial literacy quest.

    • April 19, 2013 at 7:49 pm — Reply

      That first credit card will get you almost every time. Just not enough knowledge for those facing their first credit card.

      • April 26, 2013 at 7:21 am — Reply

        Right you are! Anyway, thanks for approving my comment. Keep up the good work. 🙂

  23. April 20, 2013 at 12:15 pm — Reply

    Great post! I owe debt a lot actually. Not in money, but in what it taught me about myself and my ability to overcome.

  24. Janice @ Whiz Silver
    April 26, 2013 at 12:45 pm — Reply

    I was thankful in a way when I knew my parents couldn’t fork out the money for my university course. I had to work full time in the day and go for night classes and of course pay my own debt. Sometimes what you don’t have will just make you ‘literate’. Just like how I became financial literate when I know there are certain things my parents can’t provide for me and I’ve gotta fight for it with my own strength.

  25. Lyn
    May 28, 2013 at 11:58 am — Reply

    Financial literacy is a long journey that should start with the parents and then with the schools. Maybe banks should make it mandatory to attend a class and explain the pitfalls and how fast interest rates can ruin your life BEFORE handing out a cc or a mortgage! RIP Stompin’ Tom — I will hum your tune to remind me to stop spending money we don’t got!

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