This is the story of a family of 4 swimming in debt and living on a single income. Can you believe that they managed to pay off over $77,000 of debt in just over 2 years? This is Katie’s story…
I’ve always known debt. I got my first credit card when I was 17 (a gas card with a $200 limit that I quickly exceeded buying chips and soda and it was closed when I didn’t make payments). When my husband and I bought our house in November 2004, we rolled all of our debt, save for his student loan, into our mortgage. We were “debt free”.
We’ve been a single income family since May 2006 when I quit my job as a nanny while expecting our first child, and like the majority of Americans, we lived paycheck to paycheck. Scratch that. We were living paycheck PAST paycheck. My motto used to be “go big or go home”.
We were financing a TV? Why not get the $1500 one instead of the $300 one?
We were financing a new car? Why not get a luxury car instead of a sensible one?
You think travel trailers are cool? Finance it!
We thought in terms of “how much overtime…?” As a police officer, my husband is able to pick up shifts to bring in extra scratch. But in the days BC (Before Children), we had no idea how that would affect our family. The equation is simple:
Overtime = Time away from the house = Time away from our kid(s).
In July of 2009, my husband and I found ourselves about to grow our family (I was 34 weeks pregnant with our second child) and scared to death of what the future held. Heck, I could feel my blood pressure rise just with the opening tone of our Quicken software! Could we pay for college for our kids? Could I still afford to stay home? Would we ever feel like we weren’t drowning in debt?
Three credit cards, a car loan, a travel trailer loan, and two student loans. $77,232.88 in debt accumulated in less than 5 years! The thought is still takes my breath away. We were working like dogs to pay for things. Stuff. Junk. At one point, we were paying $1100 a month in car payments!!
That $1500 TV? It’s already broken and donated for parts.
That luxury car? I stopped driving it 6 months after I got it because my pregnant belly was uncomfortable in it. (But the $556.45/month payment was steadfast)
That trailer for built-in family vacations? My husband was working so much overtime that we rarely got to go anywhere!
We were able to make all of our payments (our mortgage in Northern California included!) but remember that fear of not being able to pay for college? Of not being able to stay home? It was always there.
One day, while perusing miscellaneous blogs, I spotted the name Dave Ramsey. I’d never heard of him, but his principles were sound. In fact, they were very similar to thoughts I had had and suggested to my husband not long before. I told him a little bit about what I had read, and he ran out to Barnes and Noble to buy his book, Total Money Makeover for $21.84 on July 12, 2009.
Thus began our transformation.
to be continued tomorrow…
Katie moves the hands behind the blog My Daily Bread Crumbs, where she blogs about faith, finances, and food. She’s been blessed with a similarly driven and very supportive husband of 7 years, three inspiring children, and two wacky dogs. She spends her days managing her household, refereeing kid squabbles, and working on her imperfectness. You can also find her on Facebook and Twitter (@MyDailyCrumbs).