The photo you see above is true. That’s the real number my hubby and I stare in the face. I’m sure to some people it’s laughable. I’m sure to some people that almost $10k in personal debt is nothing and what’s left on my house makes a few people green with envy. There is a problem with that debt though and it’s one I really have suffered with over the last few years. I had my head in the sand.
If I were to take you back in time about 16 years you would never have seen that number. I made my debt mistakes at 18 years old when I thought free t-shirts for applying for a credit card was a FANTASTIC idea. I mean, I lived on a tiny budget, gained the freshman 15 and needed some new jeans. A new t-shirt was great! I also thought that if I ignored my student loan papers in my dorm room, somehow the housing costs would magically appear and I wouldn’t need to pay for that semester of room and board. Right?
After my parents told me there was no way they could help with the $1,100 stupidity debt I gathered for school , I skulked home and took two jobs to pay off credit card debt (What the heck is interest???) and my housing fees. I worked at Pizza Hut from 7 am until 4 pm and McDonald’s from 5pm until close. I had one day off a week. My feet ached, my back was in agony, my temper was short and sleep was nonexistent. I made it through though and came out debt free on the other side. My only bills were car insurance and a meager check I wrote to my parents for rent while I lived at home.
Fast forward a few years to a newlywed couple who had a decision to make, honeymoon or putting our rings on a charge card? Well, of course we wanted a honeymoon! My now ex-husband also lived at home before we married and managed to accumulate a hefty amount of credit card debt. Oh, it was manageable for him when he lived at home, but not as manageable when we married and moved in together. I went from debt free to a car payment, a computer payment, eating out payments and a slew of MAN I HAVE TO HAVE IT NOW payments.
I certainly don’t blame him entirely for how money was managed in our marriage. We had completely different views on it. Honestly, he was better at managing money than I was, but I made sure the bills were ON TIME whereas he would hold back a bit of “emergency money” and make something a little late. I tried swapping balances to 0% cards so we could pay it off faster, it never happened. So, 8 years later when we divorced, I took the debt with my name, he took the debt with his name and we went off to live our new lives.
My next version of managing debt was to make someone else manage it. Debt consolidation! WOOHOOO! For the low price of $141.00 a month, someone else would pay my bills, my phone would quit ringing, and I would be debt free in five years! YIPPY SKIPPY! It did work…and I can assure you when it came time for me to start working on refinancing my home, that company was kind enough to send an EXCELLENT letter of recommendation. All in all it really wasn’t bad for me, I just paid them $25.00 a month to be the grown ups and manage my money.
Fast forward a bit and I am happily remarried. I thought it would be a great idea to get an emergency credit card (do you see a trend here?) It’s only a $300.00 limit! I pay it on time so I manage my money…right?! Ha! Then I got another emergency credit card. My husband and I used it to send him to Certified Nursing Assistant school and to buy supplies etc. for school. There was a small problem though…
For the last 2-3 years we have completed ignored medical debts unless we HAD to pay them. I just couldn’t deal with them again. Did I forgot to mention that hubby #1 was in the hospital for 9 months and almost died? While he was in deathly ill I started getting collection calls on his medical debt. I wiped out my entire 401k just to keep the house running and those jerkfaces were calling me for money? They wanted money when he was in a coma, but a new hospital, and they didn’t care what was going on because we OWED it. REALLY? I digress… I saw new medical bills from the current hubby and I freaked.
I think I seriously had bill PTSD. Here they were AGAIN. I had been out of debt twice in my life and once again these random bills were coming in. Doctors, hospitals, lab tests, some other random person who obviously needed a $100 because he sent a bill too. I tried calling at first to make payment arrangements. Their bills, right there *points at it* says to call THIS NUMBER for arrangements. What that phrase really means is “you make too much money for assistance and we’re going to tell you what to pay or else”. I literally had people refuse arrangements from me, and they weren’t small bills either. $600 here, $400 there, $1100…you get the drift.
I was frozen, and panicked, so I did something any intelligent person would do. I grabbed them all up, said some loud expletives and shoved them in a shoebox. I would deal with it when I could. Until then they went on the screw-you-for-not-helping-me-pile. Then my husband was sued.
It’s my fault. I took on all of the responsibility of the debt because my husband REALLY freaked out over medical debt. He never had medical debt in Scotland. He simply could not wrap his head around medical debt at all. It ticked him off and he ranted and raved about it regularly. To “protect” him from the stress, I told him I would handle it and put them out of sight…I knew I would get to them eventually. I never really imagined anyone would sue us over debt that was incrementally small, but overall rather large. I stuck my head in the sand my, butt in the air and told them to kiss it. They kicked it instead.
The law suit was my wake up call. I listened to Dave Ramsey before, but quite frankly got tired of hearing the same old answers to the same old questions. What are the baby steps? Should I file bankruptcy? I found myself making sarcastic comments to people on the show like “Do you EVEN LISTEN to this show?” “Haven’t YOU heard this answer a million times?” “OHHHHHH WOOOOHOOOOO you make $300k a year and paid off your $40,000 in debt in FIVE YEARS. Aren’t you special? If I made that much I wouldn’t have had that much debt to begin with…IDIOT.” “Oh goodie for you! You paid off $60,000 in debt while you lived in your mom’s basement. Why don’t you try being a grown up and making it like the rest of us do? Pay REAL bills and then pay off your debt” Yet, each and every time I heard someone call in to make their debt free scream…I would cry. I still do.
Then I found this through this site and realized what a jerk I have been to the other Dave Ramsey listeners. One simple phrase from this blog gave me a slap in the face. “You can afford ANYTHING you prioritize”
. . .
She was right and that phrase DID change my mindset about money. I realized that no matter how stupid the decisions were of those I listened to on Dave Ramsey, THEY were more of an adult than I was even though I mocked THEM. They paid off their debt. They looked it in the face and decided that enough was enough. They lived in their mother’s basements to pay off debt, they made decisions and didn’t stuff bills in a shoebox. My husband and I simply hadn’t made our debt a priority. We childishly ignored it and suffered the consequences for it. I ate my dose of humble pie.
My husband and I decided at the beginning of the year we were going to face this debt together when my husband unexpectedly lost his job. We put it off again, and again and again.. Facing debt at the time of a job loss was 100% NOT what I wanted to do, but the quote inspired me to get it together. I put my foot down and the hubby and I spent 3 hours going through bills and collection notices. We had to meticulously match account numbers because some doctors and collectors were billing us at the same time. I sorted everything into a snowball pile.
I spent about 10 hours over the next 2-3 days making a new budget. I over-organized a 3 ring binder. I made a table of contents with our bills on it, notes on who to contact, account numbers, addresses and everything I could possibly need in that binder. I stopped trying to protect my husband from the stress and we decided to work through it together. I still do most of the managing, but he agrees on OUR PLAN. We pulled our heads out of the sand!
After the hard part was finished, we discovered something. After we paid minimums on everything, we could send everyone a miniscule amount a month. We could pay off the $2.62 bill that I never saw because it was in a shoebox. We could pay off 3 bills…and on my salary alone. Just mine. That revelation made us realize that even on our small income we could be debt free by the end of this year, except the house and assuming hubby finds a job quick! Please cross your fingers.
This is our first month of a heavy budget. I can tell it’s going to need some tweaking already, but at least we started the journey.
Have you struggled with money? How did YOU fix the problem?