Case study: Deep in debt but scared to take action

Last night, as I do from time to time, I met with a GRS reader. Actually, Debbie doesn't read this site but her sister does. And Debbie means to. Although I met Debbie's sister last year at a Camp FI event, I'd never met Debbie before.

“So, what's your situation?” I asked after our waiter had brought us each a glass of wine. “What do you want to know about money?”

“Everything,” Debbie said, laughing. “I feel like I don't know much at all right now. I guess deep down, I know what I need to do. I just don't do it.”

I nodded. “I'm like that with fitness,” I said. “I know what I need to do, but I just don't do it. I know I need to exercise. I know I need to stretch. I know I need to eat better food. But for a lot of people — people like you and me — there's a barrier between knowledge and action. It doesn't matter if we know how to do the right thing. It's the action that matters.

“I buy books about money but I never read them,” Debbie said. “I have Dave Ramsey and The Millionaire Next Door.”

“Those are both good books,” I said. Then, I shifted gears.

Looking for Purpose

“This might seem odd, but let's talk about your goals. What do you want out of life? What are your big plans?” Our waiter brought Debbie a bowl of mussels and me a plate of pasta.

“I want to make the world a better place,” Debbie said. “I'm young. I work for a huge multi-national company. But I don't believe in the company and I don't believe in my work. I get paid $20 an hour to bring people coffee and water all day. I have a bartending gig on weekends. I want to do something that matters. Maybe improve our food system, for instance. I hate how people eat. I want more people to have better access to high-quality food.”

“That sounds like a noble goal,” I said. “How do you get there from where you are now?”

“I don't know,” Debbie said. “It seems impossible. I have $80,000 in student loans but they're in deferral. I don't have to pay anything on them, but they still accumulate $600 in interest every month. How can I ever hope to catch up?”

“Yeah, that's rough,” I said. “I used to be in a similar position. Twenty years ago, I had over $35,000 in credit card and consumer debt. That's not the same as your $80,000, but it'd probably be equivalent to about $50,000 today. I carried that debt for a long time, just treading water, never getting ahead. I felt like I'd never get it paid off.”

“But you did it?”

I did,” I said. “I did it by creating a gap between my earning and spending. Fundamentally, there are only two things you can do to improve your situation. You can make more money or you can spend less. Ideally, you'd do both. You want as wide a gap as possible between what you earn and what you spend. Right now, it sounds as if you don't have a gap. You have a deficit.”

Debbie nodded. I slurped down some noodles.

Two Familiar Foes

“How much is your rent?” I asked.

She looked sheepish. “I pay $1200 for an apartment in northeast Portland,” she said. She gave an address near where I lived after my divorce. “I know I should have roommates but I don't. I don't want the complications.”

“And what's your take-home pay?”

“Just over $2000 per month,” Debbie said.

“Yeah, your rent is pretty high,” I said. “I mean, it's not high compared to other places in Portland — it seems about average — but it's high compared to your income. Nearly 60% of what you earn is going to housing. That's a lot! The average American spends about one-third of their take-home pay on housing. So, that's a great place to try to cut costs. Maybe not right now, but over the long term.”

“I like where I live,” Debbie said, prying open a mussel.

“You might want to consider roommates,” I said. “Aside from your housing costs, it doesn't sound like the rest of your spending is outrageous. Honestly, if I were you, I'd try to find ways to boost your income. Especially since you hate your job.”

“I know,” Debbie said. “I've thought about that. I have a marketing degree that I'm not using. My current company offered to give me a raise and a promotion, but I turned it down. I would have been doing work that I hate even more. It would be difficult for me to be in a position where I had to represent a company I don't like.”

“Why don't you quit?” I asked.

“I did once,” she said. “But then I went back right away. I was scared to apply for new work. I don't have much self-confidence. I mean, I'm 31 and have a marketing degree, but I don't have any experience. Who would hire me?”

“I get the lack of self-confidence,” I said. “I totally get it. I struggle with that every day.”

“You do?” Debbie said. She seemed surprised.

“Yes,” I said. “Every day. Even today, I've been dragging around with my head full of negative self-talk. But here's the thing: I've learned to just do the stuff that scares me anyhow.”

The Importance of Action

For some reason, our conversation turned to running. Debbie wants to run a marathon in two months, but she doesn't feel ready. “Have you run a marathon before?” she asked.

“I haven't run a marathon,” I said, “but I've walked one. Ten years ago, when I was fifty pounds heavier, I trained to run the Portland Marathon, but I got hurt. Instead, when the time came, I walked the entire thing.” I paused and pointed at my feet. “And I walked it in these hiking boots!”

“For real?” she said.

J.D. walking the marathon

“Yes,” I said. “Looking back, it was goofy. But I really wanted to complete the marathon, so for some reason I decided the best way to do it was just to have fun. Since I was too hurt to run, I walked in street clothes, as if I were out for a hike.”

“Anyhow, this kind of ties back to you looking for work. I could have easily decided to not do the marathon since I was injured. I could have given up. Instead, I found a way to do it. I know that applying for jobs sucks. I know you're worried about rejection. But I think you should do it anyhow. Accept the fact that you're going to get rejected. Screw it. Apply anyhow, and look at the whole thing as practice. Tell yourself that even if you don't find a better job, you'll be getting experience with interviews and the hiring process.”

I took one last bite of my pasta. “Really,” I said, “it's all about taking action. Even if you're scared.”

I told Debbie about my friend Mike. Mike is a software engineer who is happy in his high-paying job. All the same, once or twice each year he takes time off work to interview with other companies. He's not actively seeking to leave his job, but he wants to stay sharp. He wants to see what other opportunities are out there. He wants to get practice interviewing.

Obviously, Debbie is in a different situation, but I think she can apply the same principles: Actively apply for other work. View the experience as an exercise, not a necessity. When she doesn't get a job, she should follow up to find out why not.

Ultimately, I didn't have any magic answers that could make Debbie's money problems disappear overnight. As is often the case, she's going to have to do a lot of hard work (and make some sacrifices) in order to improve her financial situation. She's going to have to avoid falling into the forever fallacy, the mistaken belief that she'll always be struggling at a job she hates while carrying a mountain of debt. Things will be tough for a while — but if she can make some course corrections, they'll improve.

“Thanks for meeting me,” Debbie said as we left the restaurant.

“I hope it helped,” I said. I'm never convinced that these conversations are actually useful for the people I meet. Like I said, I too lack self-confidence.

“It did,” she said. “I'm going to get a new job.”

It Gets Better

My dinner with Debbie reminded me of a conversation I had last year with my friends Wally and Jodie. As I shared last August, this couple has decided to take control of their finances, but they started with less than zero. In fact, their situation is very similar to Debbie's.

When I wrote about Wally and Jodie in August, their income and spending were qual. They couldn't save anything. They had $35,000 in debt and were behind on a car payment.

I don't know their exact situation today, but I know they've been working together to increase their saving rate. They don't go out to eat. They don't drink alcohol. They work constantly at multiple jobs.

“It sucks,” Wally told me last weekend. “We're tired all of the time. We can't wait for this to end. But you know what? You were right when you said that it won't last forever. Already, we can see that. Last summer, we had no margin. Now we have an $800 gap every month.”

“Wow,” I said. “Nice work!”

“Yeah,” said Wally. “It's very tempting to spend that money, but so far we haven't. We're using it to catch up on our debt. It's only a matter of time before everything is paid off and we can go back to saner hours. It feels good.”

I love hearing success stories like this. I love seeing people taking action to turn their lives around. I believe strongly that Debbie can turn her life around too. She's young. She's smart. She's engaging. She lacks self-confidence, but that can be faked.

If Debbie is willing to make a couple of big moves — reduce her rent and find a new job — I suspect that in six months or a year that she too will find that she has a gap between what she earns and what she spends. And when she creates this gap, her worries will diminish. (They'll never go away, but they'll decline.) In time, she will pay off her student loans, find work that she loves, and change the world.

More about...Debt

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I like your posts. I’m nearly the same no confidence however not in debt. Could be saving more. Have cut credit card spending by half however the £250 could go into savings. Still trying however not hard enough. Followed the KonMari method well kind of slowly (a snail could will the run). I’m trying which I’m happy as I wasn’t doing this a few months ago. Change the world I like to help the homeless & prisoners went the come out. Give em a dose of Mr MMM & Get Rich Slowly plus help them towards keeping upto date on… Read more »


JD, I really appreciate your take on case studies. People do what they do for reasons that are hard to understand from a few paragraphs. Anyone can say – you’re being dumb because the answer is obvious and if you don’t do what I say to do, you’re weak and ridiculous. You don’t ever do that. You treat everyone as a complex human being whose life has more dimensions than we see. It’s both honest and refreshing. I wanted you to know it’s valued by those of us who sometimes struggle to act in our own best interests. Best! Sara

john klabunde
john klabunde

I think you need to bring case studies like these to your blog more. I read a lot of money blogs and most are full of success stories. Money blogs need to pull in the people who need hope and help. unfortunately , the people who need it most, even when you lead them to great Ideas , still don’t take charge of their money problems. It’s a mystery to me how someone can say, ” yeah yeah your right , I’m gonna do this.” Then, later , you follow up with how ya doing? And get, “yeah but, yeah… Read more »


What stands out to me about this conversation is what you shared about approaching the marathon with a sense of fun. You could’ve gotten really self-conscious and chosen not to participate, but instead you embraced the experience and didn’t take yourself too seriously. I’ve had to do this a lot lately, because we’re aggressively paying off our debt and I’m pursuing work that I care about. I’m really putting my true self out there, and the superficial things that made me blend in, like nice clothes, a regular car and normal weekend activities to chat about, aren’t there as a… Read more »


I noticed in the photo of you walking the marathon that people in the background were going in the opposite direction. Did you walk it in reverse?


I loved this post and think case studies like this would be a great regular feature. I appreciate how genuinely empathetic you were to Debbie (and also the details about what you were eating and drinking!), and the way you shared your struggles with her–and us. I do hope she reads Ramsey’s Total Money Makeover. All the caveats about Ramsey aside, that book is probably one of the most useful books for Americans. I was not in debt, but I found it inspiring nonetheless.

Rob C
Rob C

This is a great post and it’s come just at the same time that I’m starting to get our family clear of debt and save more. I don’t know why it’s comforting to know that there are other people in a similar situation, it shouldn’t be should it? It’s not like I get some weird pleasure from knowing other people are in debt too but maybe it’s that it then gives me the encouragement and inspiration to look at people who’ve been in the same boat as me and with some planning and commitment got themselves to a better financial… Read more »


I think it’s great that you’re helping people on a 1 to 1 basis. Great job.
Action really is the way out. Most of us already know what to do, but we just don’t. We have to build better habits to get out of the rut. I hope you exercise more this year. Build it into your schedule and stick to it. Good luck!

Little Seeds of Wealth
Little Seeds of Wealth

Thank you for posting the case study! It feels so real and refreshing. I think most people know in general what to do but the difficult thing is to apply the principles to individual situations and to take action. I hope you have a follow-up post about Debbie in the future.


Such a cute photo! that’s awesome u walked the marathon


I think we can all relate to this. Knowing what you need to do and facing up to reality and actually doing it are two entirely different things. They mistakenly say that “knowledge is power”, but the only knowledge combined with deliberate action is truly empowering.

Mr. Hobo Millionaire
Mr. Hobo Millionaire

That was a painful read. Not your writing of course, but Debbie’s questions and answers. >>Ultimately, I didn’t have any magic answers that could make Debbie’s money problems disappear overnight. Actually, you did. Her rent is insane for her income, yet you see people making the same choice over and over. It really is as easy as getting one or two roommates. And she needs to find a 2nd job to pay off her student loans and/or find another higher paying job. That $600/month loan deferment made me ill to read. She is living in fantasy land, ignoring her reality.… Read more »

Donna L Freedman
Donna L Freedman

Another vote for the case studies. Some readers will see themselves in these articles; others will see the people they USED to be. Either way, it’s a good deal.


Love the “practice” job hunt- that’s how I ended up in my current job, which I really really dig. I applied as a practice run to force myself to update my resume, and with the goal of a second interview marking a success. Well, 2nd interview went well, had a 3rd with a local team, learned more about the company, liked what I heard, and got an offer I couldn’t refuse. I’ve been really encouraging friends now who are kinda looking or sorta pondering a change to just go for it, apply for jobs even if it’s not your first… Read more »