Summer of 2003 - We found out we are expecting our first child. We had a lot of debt - no idea what the amount was, I wish I had written it down. Our goal was to pay it off March 30, 2004 - all except our student loans. Here's the kicker, our last payment went through to the last credit card on March 30, 2004. It's also the day our son, Derrick ("Dirk") was born! See why setting a date for your goals is so important? It's so they can happen on that date! Now, why are we still paying debt off if I said we paid it all off way back then? Because we made the mistake of not sitting down and being on the same page about a budget. We didn't change our spending habits. I was now a stay-at-home mommy. Yet we were still spending as if we were both working. My husband had 2 jobs and I had 3 while I was pregnant and we were paying down the debt.
Summer of 2006 - Our son was now 2, and we welcomed our daughter, Eve, the previous winter. We desperately wanted to get out of being Resident Managers at a local college, so we bought a duplex. We lived on one side and we rented out the other side. Our renters basically paid over 80% of our mortgage. But we had $10,000s in credit card debt again. How did we let this happen?! We worked so hard 2 years ago to get rid of it, and now it was back. I was furious. On top of that, I learned I had a horrible case of anxiety, and without going into too much detail, there was no way I could get a job until I had that under control. After a lot of prayer and lots of support from Ryan, I learned to control that without medication. Why no medication? I don't like being on meds. AND we couldn't even pay our bills, how was I going to add medical bills to our mess.
Summer of 2007 - We hit nearly rock bottom. We couldn't pay bills, let alone buy food or put gas in our one and only vehicle. Again, Ryan and I didn't communicate well on how bad off we were - I was in charge of paying the bills, and I couldn't figure out how to do it. I was tired of telling him "No" to everything he wanted - new cell phone, new clothes, turning up the heat, buying certain foods, gifts for the kids, etc. So I caved and just let him use the credit card.
January 2008 - I got a job. Ryan still worked overnights, and I worked over the lunch hour at a local restaurant. He got a few hours of sleep here and there. Not very healthy, but we were starting to get back on track. We still had massive amounts of debt - more than double our income for 2007.
May 2008 - I found out we were expecting our 3rd child, Victor. No big deal - it's 9 months away. We can pay off loans by then. Well, here is where an Emergency Fund is so vital. We just kept paying down our smallest loan without ever having an emergency fund - we figured we'd just put it on the credit card if something happened, then pay that off. (Yes, it's stupid, but that's what the plan was.)
August 2008, my husband's job was outsourced. He got his job back after reapplying, but at a pay cut. AND we lost our insurance. I'M 5 MONTHS PREGNANT! What are we going to do?! If we wanted to Cobra our insurance, it would have taken one of Ryan's entire paychecks every month to pay for it. We were just starting to get ahead. So, I caved and went on the state health care. I'm not a fan of living on government help, but this is what it's there for. People in our situation. And I'm grateful for it, but I knew I didn't want to live on the help. Ryan quickly found a job, and this whole ordeal was a huge blessing in disguise. Ryan wasn't working overnights, and he was making much more money!
October 2008 - 3 years ago now - We hunkered down and followed Dave Ramsey's Total Money Makeover. We got the envelope system in place, and it was so much fun watching the categories get filled up, and when they were empty, that was it. NO using credit!
Early December 2008 - Ryan was laid off. Really?! Baby #3 was due in a month. Talk about stress. This was a very hard month, but we made it through. I loved that family gave us $ as gifts, as it was what we used to eat for the next 6 weeks. I so wanted to be home with our new son, but I went back to work when he was just 6 weeks old. Ryan was able to get hours here and there. As stressful as it was financially, having Ryan home was a blessing. I had had my 3rd c-section and needed help with the other two little ones that were still at home full-time. And I didn't want them in daycare, so they got to stay home with him instead.
Fast forward to October 2009 - I was ticked off at all the debt. I was tired of trying to pay off loans and never having more than $25 some weeks to pay for groceries for a family of 5. We could pay bills, but there was very little, if anything, left over. Ryan still wasn't full-time, he was still next on the list to get full-time, there were just no openings. I know we qualified for help from the government, but we got ourselves into this mess, we can work our way out of it. And bankruptcy was not an option for us. We were fully capable of paying our debtors if we worked harder. So we tallied up the damage...*gulp*...We were $46,500 in debt, excluding the mortgage. Double your income in a year - that number would then compare to the debt we faced based on our income. I couldn't wait for us to both be full-time so we could really take a stab at that mountain of debt.
January 2010 - I find out we are expecting Baby #4. Ok, not only are we going to keep paying down this debt, but I also want to make sure I can stay home for a full 3 months this time. Ryan is nearly full-time now, so I thought we could do it.
July 2010 - Debt is down to $29,300! Dave Ramsey says to pay down your smallest balance first. We did that in the beginning, but as the end of 2009 neared, I realized that a tax return plus just another $2000 would pay off a loan that would give us nearly $400 back every month to snowball into another loan. So we took on our biggest first, so that after 4 months and a tax return, we'd have it gone. What a relief that was! But in all honesty, it was still hard making ends meet sometimes. But we kept at it.
September 2010 - Sylvia was born and thus my maternity leave began. We saved up enough for food and gas to make it through almost 3 months. But "stuff" kept happening. Our washing machine broke a couple weeks before Sylvia was born. The rental needed a plumber a few times, my employment was bought out and I lost our insurance so we had to buy temporary insurance in one lump sum, etc. And to be honest, I didn't care - I knew 3 months was a short amount of time and I couldn't replace the first few weeks of Syllie's life, so we scraped by for a while, but ended up getting into debt a bit again. This c-section was a much harder recovery, so I'm not sure I would have been able to go back to work much earlier. It was totally my fault we didn't have enough saved up to cover all the other emergencies that happened, but I didn't realize that until a few weeks before she was born. I miscalculated and paid too much to the credit card when it should have been transferred into our savings. Ryan's work along with mine turned out to be exceptionally slow also - which meant our pay checks were significantly less than normal. Living on a budget isn't that hard if you have consistent income, it took a lot of time to figure out how our budget would work for us since our income in basically commissioned- and tipped-based. Lesson learned (although I don't plan on having more kids lol)
December 2010 - I'm coming off maternity leave. I decide to swallow my pride and ask for help from our church. All I was hoping for was $50 to help me buy groceries - and if you know how I shop - I could make that last 2 weeks until pay day. How they paid Ryan's commissions changed during that time, so instead of getting his commissions in 2 weeks, he now had to wait 6 weeks. Those transition weeks were so hard. I desperately wanted to have one small burden lifted from my shoulders. Maternity leave was hard financially and I just wanted one week of feeling "secure" again. I was overwhelmed with the help we received. We used to be the people that gave and gave and gave, and for the last few years, we weren't able to, and that was a hard pill to swallow. We also received an anonymous gift of money in the mail. No idea where it came from, but I am so incredibly thankful for their generosity. All that, along with gift money from Christmas gifts, we were able to restock the Emergency Fund :D We were truly blessed that month, and I continue to say prayers for the people that blessed us - that they in return are blessed in more ways than they can count!
February 2011 - We are making great strides in our debt reduction. Ryan is getting fantastic paychecks (he's in sales - aka commission) and I am working better serving shifts (aka - better tips). Everything seems to be going "according to plan". Then I receive a call that my father was being rushed to the hospital. He passed away. My father was 57 years old. I spent about 4 of the next 6 weeks at home in Wisconsin with my Mom. Because of my fantastic friends, my husband and son (1st grade) were taken care of. By March however, our Emergency Fund was now gone.
March 2011 - A family member sent us a check that would restock our Emergency Fund, with a note saying we could repay it whenever we could with no interest. Seriously, having just that little bit set aside in an account I cannot touch easily is such a stress reliever for me. I love them for doing this for us. It's motivated me ever since to keep working so I can pay them back. I know you should never loan family money, but I didn't ask for it. It was out of their generosity to send it to us, and our goal is to have it repaid when we get our tax return next year. I think they could also foresee what was happening on Ryan's side of the family, and knew what a financial burden we were about to deal with there, just 3 months after Dad passed...
May 2011 - Ryan's mom passes away after battling cancer. She was given until October, so this came as a shock to us. But so thankful she was no longer suffering. We just visited them for Easter last month. They are 500 miles away. Ryan and I both have jobs without paid vacations, so when we take time off, we are out the money. We took 3 trips to Indiana in 7 weeks. But God always provides and we always had enough money.
October 2011 - Currently, this is our debt...
Discover Card $2690
Bank of America $2350
Ryan's Student Loan $9395
Carrie's Student Loan $6480
Family Loan $3000*
Family Loan $1000
Total Damage - $24,915
- *This loan was given to us after we totalled our vehicle in 2007 to get a better vehicle than what our insurance would pay for. We kept offering to pay it back with every tax return, but were told to put the money towards our debt instead. And I'm so incredibly thankful for that! We paid a portion of it back twice now, just to show we are honoring our word of paying it back.
Once the Discover Card is paid off, that is when we will begin saving for our future home! Yes, we will still have debt. The BofA Card has such a small interest rate, I'm willing to bypass this one for now. We are planning on buying a new home where the mortgage will be less than what we are paying for now and renting out our side of the duplex - thus making money, and that money will pay off our debt while we have enough room for our children to live. Four kids in a two bedroom is starting to wreck havoc on us! And to be honest, I believe we'll be able to save up money quicker than we think - thus giving us more money to pay off the other debt way sooner than we're planning :D
So there you have it. In 3 short years, we had HUGE setbacks, but if you look at the numbers - they are still going down drastically :D God honors commitment. We may screw up here and there, but we are learning from them and still moving forward! Prayers we are able to meet our goals and have no stumbling blocks along the way are always appreciated :D
This is so cool! It is amazing how God honors commitment in so many different areas too. Thanks for sharing your story. It's quite incredible!
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