You often see stories of people pulling themselves out of the pits of debt. The internet is filled with amazing stories of how families went from rock bottom to the top of the world. How they got out on their own using their hard work ethics and belief system to keep them going.
This is not one of those stories.
Today, I’m going to share with you a very personal story about my family and me. How we got ourselves in debt, by being responsible adults. Going from $0 to almost $200,000 in under 3 years.
I’m also going to talk about a few of the failed attempts we made to get out of this financial hole.
With any luck, this story can be used to help you to not make our mistakes. Or it can motivate you to pull yourself out of a similar situation.
It all started 7 years ago, when I married my Army husband.
He came with an auto loan that was nearly completed and a military credit card that he was required to have. I, on the other hand, had no debts to my name. About a year into our marriage the car loan was paid off and we were debt free.
Then my husband was sent overseas for a year on a hardship tour. Leaving me home alone with our then 1-year-old.
The 14 hour time difference and weeks of no communication made finances difficult. Our bank account often ended up over drafting. It’s at that time that I discovered couponing, and became obsessed with the hobby.
It didn’t take long for me to realize that the best deals at stores often went to those with store credit cards, so I applied to store credit cards.
I told myself I’d use them responsibly.
Paying $40 a month to each credit card was more than the minimum payments. But I almost never had a zero balance.
By the time my husband came home, I had finally paid off both balances. A few days later, we moved across the country to our new duty station. As we drove to our new home, we stopped in at Toys R Us locations to find toys to entertain and “treat” our child. Placing the balance on our card.
When we got to Tennessee, we paid off the cards completely and swore never to have them filled more than 10%.
Then life happened.
We needed another car, so my husband bought one. This added $32,000 worth of debt.
My daughter needed dental surgery to correct a chipped tooth. Because she was so young, that meant using anesthesia. We couldn’t afford to pay our portion up front, so we needed to apply for a Care Credit card. We paid more than the monthly minimum every chance we could and had it paid off in a few months.
A year later we decided to “stop wasting money” on a rental home.
We had been living on post, but it was costing us our entire housing allowance, and we knew a mortgage would be half the monthly price.
A VA loan allows you 0% down on a new home, so the only costs were for the inspections. Our realtor helped us break our current rental lease at no expense and found us a home below budget, with land and potential. Of the entire experience, we felt we had the right person for the job.
When we were looking for houses I was a few weeks pregnant so we wanted a home that could grow with our family. We picked a small home in the country limits and we thought it was perfect. So we placed an offer and while waiting to close, I had a miscarriage at home. This only amplified my desire to get out of that place. So we continued with the home-buying process.
A few months into this new home we realized it was nothing like what we had hoped for. We began regretting our decision.
There were 1.5 acres of land under our feet, which meant we could garden. We could also expand the house and have it grow with us and our families needs.
Unfortunately, the previous owners had been “house flippers and never touched the yard.”
The backyard dirt was littered with glass beer bottles, fish hooks, rusty nails, and divots in the dirt from wheels digging it up like a dirt track.
We later found out from neighbors that the family that lived there had used it as a junkyard of sorts and were questionable in nature. Bags of animal bones in the yard freaked us out, but we were told they were hunters so we tried not to overthink it.
We bought a riding lawn mower so we could keep up with the yard work and a trailer our truck could haul it with.
Then there were a few odds and ends needed from Home Depot. This added $10,500 worth of debt.
Our house was a tiny 1,300sq ft but had 1.5 bathrooms and 3 bedrooms. Unfortunately, it had almost no closet or storage space, and staying organized was a nightmare.
We bought furniture to make it work and put them on an Amazon credit card. Adding $5000 worth of debt. It wasn’t supposed to ever get that high, but the high-interest rate made our balance skyrocket.
We cut a few costs to help stretch our budget.
We cut costs on utilities and trash services by taking the trash once a week to the dump instead of having a trash company come get it. Made a budget and stuck to it, cutting costs and paying things on time and more than the minimums whenever possible.
We added a house guest
My husband had a friend that was wanting to move somewhere new and start fresh. We gave him our spare room and expected him to help out with chores in exchange for free room and board. Figured he would have a job in a few weeks and money to either start paying rent or move out. He didn’t.
This guy was single-handedly able to eat the same amount of food per day as my family of 3.
Went through an entire roll of toilet paper by himself, in 2 days. And he used my good hand towels as wash rags in the shower, leaving them soaked in the bathroom for me to clean up.
6 months later, my son was born. Up until a few days before his birth, I had been the one mowing the grass, moving furniture around to clean and doing pretty much everything by myself.
My husband had been taking a lot of college courses to secure an after-Army job.
These classes crammed a full course worth of knowledge into a few short weeks. Which kept him stressed, and busy most of the day.
Eventually, he had had enough of our free-loader house guest. He told him he had 1 month to get a job or else we’d buy his flight ticket home.
It was then, that the guy realized he couldn’t get a job because his driver license wasn’t valid. He also didn’t have his SSN card or any real forms of identification. No mode of transportation and no real work experience.
So when his 1 month was up, we bought him a last minute flight home. In December. -$500 cash.
The following month, my husband’s military contract ended and we were civilians. Unemployed and struggling to make ends meet as we tried to secure a new job.
Finding out the hard way about the difficulty of getting government assistance and how the “unemployment clause” on our auto loan was a giant joke. We had been paying almost $200 a month on our auto loan to cover us for moments just like this, for nothing.
Surviving unemployment was difficult. By the time we were approved for benefits, we had a new job. My husband flipped burgers for a local fast food place. This barely covered the mortgage and nothing else.
I crafted items and sold them, for money to cover our food and small basic bills until the food stamps application was approved.
After a few months of working at the fast food place, my husband’s bone fractures got worse. He had to cut back hours because his pain was so intense.
After realizing we couldn’t survive like that, we sold everything and moved our family of 4 into a single bedroom of my parent’s house.
We found a tenant to live in our home and wrote up a contract so he was paying enough to cover the mortgage and then some.
The goal was to catch up on late mortgage payments and start a savings funds so we had money to fix up the house and sell it. Problem was, our tenant never paid more than $400 per month. and as the months went on, he barely paid enough to cover the utilities.
We were now drowning in debt.
Our only income was now the $250 a month we got from the VA disability and my husbands GI Bill for college. Paying mortgage for a home we weren’t living in.
My husband got a job and lost it within 2 weeks. This added to his depression and a month later, I started blogging in hopes of someday making money from it.
Most of our bills went into collections.
My husband got a seasonal job in December. This helped to catch up our auto loan and auto insurance. We decided to stay focused on them since they’re the only active bills we have, not in collections.
Using our tax refund we only bought the most needed items possible and stuck the rest in savings so we could pay bills for as long as possible while we seek more income.
We bought eye exams and glasses for my daughter and me. Paid off a full 6 months worth of auto insurance and bought a cheap refurbished computer for me to blog from, while my husband builds his mobile app on the other old one.
We are trying everything we can to get out of debt with the limitations we have. Side hustling like crazy to try and make ends meet. So as I said in the beginning, this isn’t a motivational story of how we got out of debt. That book hasn’t been written yet. This is just the first in our long series to come, and I thank you for reading.