Falling Into & Climbing out of Debt

Think along the lines of "I can't help falling in love with you". My descent into the abyss of debt began when I fell in love and married my husband. I'll recount the brief history of our debt. It is important to know where you've been before you know where you are going. Debt snuck slowly into my life. It was one small credit card with a $500 limit. I didn't even intend to use it. I just wanted to establish my credit history. I began to use it just for major purchases that I would be paying off such as books for school. I had the card for about two and a half years before I amassed any debt. My credit card company kept raising my limit. I took pride in getting those letters thinking that I was such a good client that they couldn't help but raise my limit. Little did I know they were paving the way for credit card servitude.

When my husband and I married, we were young (I'll leave out the stupid part since I think its implied). We took out as many student loans as possible to finance our living expenses as well as tuition. Our part-time jobs didn't pay all of the bills as we live in an expensive coastal city. When we discovered how much we could borrow we decided to take a trip to Europe (financed by student loans of course) thinking that we couldn't possibly need all of that money to live on. We were wrong. Not five months into our marriage and shortly after we returned from our trip, we discovered that I was pregnant. The money was quickly spent and we had charged a lot of our trip on credit cards with the plan to pay it off when we got our disbursement in the fall. We moved in with my parents and I took a semester off to have our daughter. My husband continued to work but it was barely enough to cover basic food, transportation and debt payments. I can't recall how much debt we had at this time. It was likely well over $5,000 in credit card debt plus student loans.

After we had our little girl, we moved back out closer to school so that I could resume classes. We rented a one bedroom apartment and tried to live modestly. However, neither of us had ever been ones to budget and it hurt us. When we didn't have enough money to stretch to the end of the month, food, gas and other expenses went on credit cards. We always paid our bills but the debt was piling up.

After we finished our degrees, my husband went forward into the credential program. I started a master's program and looked for a job. I finally found a paid internship. We had to buy another car so that we could both work. Now we had daycare expenses too. It seemed like we would never get ahead. In fact, I believe that my internship pay went to daycare, car payment, gas and not much more. However, I was gaining valuable work experience. In six months, my internship translated into a full-time benefitted job. I thought that we were golden. After years of having nothing, we would finally be on easy street. Right? Hardly. We decided to move into a larger apartment. Our living expenses went up as I was working full-time with a commute each way. Once again, expenses went on credit cards when we didn't have the cash.

Finally, my husband graduated his credential program and immediately got a teaching position. We were elated. No more money problems. Right? Wrong again. We tried to start paying down our debt but without a working budget or a plan, unplanned expenses would hit us and go on the credit card. We weren't adding but we definitely weren't making progress.

My husband was laid off after the first year and wasn't able to find another teaching job for seven months. Of course our lifestyle had grown when to fit our salaries. Now, we had to live on one. We didn't do very well and more went on the cards. He did find a job and things began to normalize. My income had continued to rise. We were able to pay our bills and live fairly comfortably without adding anything to credit cards. We even vowed to stop using them entirely. So there ends the falling part of my story. This is how a couple ends up with $22,000 in credit card debt and over $100,000 in student loans. We've made some progress since then.

Climbing out of Debt

So we started to make slow but steady progress on paying off our toxic debt: the credit cards. We lived below our means, and as our incomes rose we tried to keep our lifestyle static. We made modest progress but something always seemed to come up. My early attempts at budgeting were comical at best. I created a budget spreadsheet, but we didn't have anything keeping our spending on track. As one of my favorite financial bloggers once termed it, our budget became unmoored from our spending on a pretty consistent basis. We also weren't saving and didn't have anything in our savings account to smooth out the bumps. We still were living paycheck to paycheck without any financial cushion.

We decided in the Summer of 2007 that we really wanted to have another child despite the financial concerns. We were happy to find out the day after Thanksgiving that year that I was pregnant. Fast forward twelve weeks, we were rushing to the hospital after I hemorrhaged. It was terrifying. I was convinced that we had lost the baby. As the grainy little picture flickered up on the ultrasound screen in the ER, we were so relieved to see the tiny little heart still beating. We were sent home with the advice to rest and with the caution that we weren't out of the woods yet. We might still lose the baby. The next day at the doctor's office, we were happy to hear the little heart still beating away. The bleeding continued. The doctor ordered bedrest for at least a month.

To be Continued.