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In 2001, Michelle Jackson learned firsthand how to be financially resilient when her mom lost her airline job following the 9/11 terrorist attacks.
Jackson was attending graduate school in her hometown of Boulder, Colorado, when her mother called and said she'd been laid off and needed to move into Jackson's studio apartment. Jackson, who at the time worked at Starbucks making $7 per hour plus tips, supported both herself and her mother for three years.
Not surprisingly, Jackson experienced major credit creep while she helped support her mom. She used student loans and credit cards to supplement what her wages couldn't cover. She opened multiple credit card accounts — so many she cannot recall the exact number — and says back then she was just concerned with getting by.
"Like most people, [my debt] just accumulated over time," Jackson tells CNBC Select. "How can you manage when you're making $7 an hour?"
To cope, she let her debt fall into collections. She still used the credit cards that were current and made the minimum payments when she could (often late). Over the next decade, Jackson's credit card debt, student loans and personal loans ballooned to over $70,000 including interest and late payment fees.
In 2012, Jackson couldn't take it anymore and finally faced the numbers. She's since paid off over $60,000, with roughly $13,000 left until she's debt free. She plans to pay off the rest by mid-fall.
Today, Jackson runs the blog Michelle is Money Hungry and the Colorado travel guide Square State. She is an entrepreneur who helps others learn how to increase their earning potential and gain the financial know-how she wishes she had when she was young.
Below, we talked with Jackson about what led her to the turning point that inspired her to prioritize paying off debt, and why she doesn't regret helping her mom, even though it had financial costs.
By the time Jackson was ready to face her debt, she had at least 30 different cards and creditors, including a few collection agencies.
"I had a level of debt complexity that lot of people don't talk about," says Jackson. "Every one of my balances had different expectations and different levels of urgency."
Jackson received multiple phone calls, text messages, emails and letters from debt collection representatives every day.
"I felt constantly under attack for years," she says.
Fed up, in 2012 she began to read money books and follow personal finance bloggers, looking closely for people whose experiences aligned with hers.
"You get a lot of people who have really high incomes talking about their debt and how they paid it off, but that wasn't where I was at," says Jackson. "I was also living in a really rich city. I grew up there and I loved it, but I was surrounded by all these people who had no idea what I felt or what [being in debt] was like."
When Jackson found others online who were on her same journey, it was the boost she needed to stay the course.
"I learned that I wasn't the only person dealing with this," says Jackson. "I felt a lot less alone."
"When I finally linked all of my accounts and I saw the [total debt], I was like, 'Oh okay,' and it didn't kill me," remembers Jackson.
But rather than follow the popular snowball and avalanche method for paying off debt, Jackson came up with her own system: "If one debt was emotionally really heavy for me, I focused on that one to get it out of my life," she says.
Once she addressed the ones that had the most emotional weight, she switched her focus to the math.
"After the emotionally heavy one was done, I got rid of the smallest. And if one had an interest rate that was too high, I would try to negotiate the interest rate."
Jackson managed her debt in ways that both felt good and made logical sense. She ignored her credit score, focused on earning more money and found ways to enjoy life along the way.
"You might have to re-imagine how you do the things that you want to do," Jackson advises those who plan to pay off debt over the next few years. "I still traveled, but I paid cash. I stayed in hostels, which I still do do to this day."
Jackson also bought a house during this time that has since appreciated to nearly three times its original value. She even took some risks by learning how to work for herself as an entrepreneur — a decision she believes held the key to increasing her earning potential.
"I love making money online," Jackson says. "It creates an equitable connection between skills and products that might not occur in other spaces. Say for example if you are disabled and you're unable to physically be in a place, you can be everywhere with the Internet. And if you are a woman, if you're a person of color — you can also be everywhere."
"I really didn't understand that [a credit card] was a tool," recalls Jackson. "In my family, that was not part of the conversations we had about money."
Jackson is not unique in this predicament: In the U.S., only 21 states require high school students to take a financial literacy course.
"We talked about how to be a great employee, show up on time and be ethical — and those were really, really important and powerful conversations — but that's a very different conversation than talking about what a credit card is, what investing for retirement is," says Jackson.
Nonetheless, Jackson credits her mother for teaching her the "soft skills" of money — professionalism, relationship-building, etc. — but she now recognizes the importance of learning about credit at an early age.
"It's funny because even though [I was in debt], I am not anti credit card. I just think that it's important to really understand what your needs are and what your spending habits are. [Credit cards] can be used in a way that makes sense for you. You just have to understand who you are."
Now that Jackson is close to paying off all her debt, she's also more comfortable opening new credit cards. She says that her next credit card will be one with travel rewards.
"It will probably be next year," says Jackson. "Especially because I do overseas travel."
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Though Jackson is much more financially savvy now than in her younger days, she does not regret prioritizing family, emotional health and self-care over her credit score.
"When you talk about debt, you get a lot of people in the personal finance space who talk about it with logic, but our decisions about money are very illogical," she says. "I know people who have a car loan, five credit cards and their home mortgage or rent, and they'll give a personal loan to their relatives if the relative lost their job and needs the money."
So it's no surprise she doesn't regret helping her mom out in 2001.
"That was the right thing to do," argues Jackson. "I was helping someone else, and I don't regret it. I love my mom. I wouldn't be the person that I am now if I hadn't done that."
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