Around the time my husband Larry and I had been married for more than 30 years, we finally faced the reality of our financial situation: We owed $88,557 in credit card debt.
We had been living from paycheck to paycheck because my husband was switching careers and had been looking for work for about a year. Even though I was working, we had to use our savings to cover our living expenses, and eventually relied on credit cards to make ends meet. We even had to take out a payday advance loan once or twice.
We weren't behind on any payments and we weren't thinking about bankruptcy or anything like that. But we were tired of living hand-to-mouth.
The debt just kind of crept up on us. We'd always used credit cards, but using them more for that year sent the balances up high. My husband was doing the budgeting and bill paying the best he could, and I really wasn't engaged in the process for a long time.
I don't blame him at all for the situation, though, because I should have been more responsible about our money and looked into what was going on.
It wasn't any one thing that sent us to get help, it was just that we didn't want to live from paycheck to paycheck anymore and we could tell we would never pay off our debt by making the minimum payments. We went to ClearPoint Credit Counseling Solutions, a nonprofit credit counselor, for help. Some of the debt was in my name, some in his, and some in both of ours. They negotiated with our creditors for lower interest rates and set up our debt management plan.
But then it got more complicated because we separated. It wasn't the debt that caused our marriage problem; it was that we weren't communicating with each other.
We lost our house to foreclosure during this time because once we separated, neither one of us could afford the house payments.
Thankfully, we were both employed by the time the debt management plan started in 2009. As soon as we got on the plan, our payments were lower than they had been, so that helped. But we knew we had to make changes because we had mismanaged our money for a long time.
The biggest thing was that we downsized -- a lot. I moved into an apartment that was half the price of the first one I found, and Larry moved into a small place, too.
We sold a lot of furniture when we split up, and I got rid of my car and drove a car my mom sold to me instead. I made interest-free payments to her. I got rid of cable TV and just learned how to live within a budget.
While we were separated, I took Dave Ramsey's Financial Peace class and that was another positive life change. I learned to manage my own budget carefully while we were separated, figured out which bills to pay with each paycheck and how much I had to live on after making the debt management payment.
We were separated for about 20 months and then we reconciled. My husband went to Dave Ramsey's class with me, and together we learned to be intentional about our finances.
Recombining our households also made it easier for us to find money to pay down what we owed.
We finished paying off all our debt in May and now all of the money we used to spend on the debt management plan goes into our savings and retirement accounts. We've been living only on cash and an ATM card from our bank since 2009 and we never intend to use a credit card again. (We don't want one at all because we don't ever want to be tempted to use it and accumulate debt again.)
Building a New Future -- Together
Best of all, we were able to buy five acres of land with our grown kids. They live in a house on the property and we're slowly building a home for us on the land, too. When it's ready, we'll sell the mobile home we're living in now. It's like a dream come true.
I can't say it was easy, but four years came and went and we survived it -- paid off our debts -- and it was well worth the effort. On top of all that, we recently celebrated our 35th wedding anniversary.