Credit Card Debt

I have been reading a lot of blogs about getting out of debt. Many of these people have truly inspiring stories. Honestly, my story pales in comparison. We have never had any major medical problems that created debt. We have never had to repay student loans (I paid my way through college with scholarships). We have never owned a new car and have never had a car payment. However, we have managed to accumulate a lot of credit card debt. John and I have a long history with credit cards. Although I have been grateful at times for my credit cards, overall they have been nothing but trouble. They have encouraged frivolous spending and have forced us into bad situations.

When John and I bought our first house, we were poor. John was only making $10 per hour at his full time job, and I was in school full-time and working part-time for minimum wage. We didn't have much money. We could pay our mortgage and utilities, but we didn't have money for any extras. Being young and stupid, we charged goofy shit to our credit cards. I went shopping at Macy's several times per month and charged it all. John would buy a new TV or a new stereo with his credit card. We even occasionally put groceries on our credit cards, depending on how empty our bank account was. Before we knew it, we had accumulated a ton of credit card debt. We were stretched thin just paying the minimum payments on our cards. After much debate, we decided to get a home equity loan to pay off our cards. This was actually a good idea, because our interest rate on the loan was lower than the interest rate on our cards. Additionally, we had to make one payment instead of six separate payments. Over the next few years, we worked to pay off our loan and used our cards sparingly. During this time, my husband changed his career and began making more money. Also, I graduated from college and started bringing home a real paycheck. Our financial future was finally looking up.

In the summer of 2005, we decided to start trying for a baby. By September, we were pregnant with Porgie. A month later we found out that John's company was transferring him out of state. Two months later we were living in NJ, in a tiny little fixer upper house. We made some improvements to the house immediately. We replaced the carpets, painted all the rooms, replaced dated light fixtures & broken door knobs, purchased new window treatments, and bought a crib, changing table , and rocking chair for our new baby. All of these "little" expenses ended up costing us a small fortune. Although we didn't want to do it, we started using our credit cards again.

And then we had Porgie. We were royally screwed over by our insurance company. The doctor who preformed my emergency c-section was out-of-network. The pediatrician who evaluated Porgie in the hospital was out-of-network. The anesthesiologist was out-of-network. Basically, every doctor I encountered in the hospital that week was out-of-network. As a result, we owed THOUSANDS of dollars to the hospital. Thousands of dollars that we simply didn't have. Once again, we found ourselves buying groceries on credit cards.

At the end of our first year in New Jersey, we came to a startling realization - there was no way we were going to make it in NJ. The cost of living was too high. Our shitty little house in NJ cost 3 times more than our house in KY. Our property taxes were 5 times higher. Our gas and electric bills were higher. Our car insurance was higher. Basically, everything in New Jersey was more expensive. We were drowning in debt.

We had two options to solve our problems. 1) John could look for a higher paying job or 2) I could get a job and put Porgie in daycare. This dilemma was solved for us when I found out that I was pregnant with Izzy. John started looking for higher paying jobs in his field. After searching online and talking to several businesses in the area, John concluded that we were being screwed. We were shocked at how underpaid he was. His salary was great for someone living in KY, but it was completely inadequate for someone supporting a family in NJ. He went to his employer (who is based in KY) and explained the situation. Without arguing over numbers, his company met his demands and raised his salary. We were shocked and grateful.

Instantly, we were able to pay down some of our debt. We paid off all of the hospital bills. We paid off my credit card. We bought a minivan for our growing family. We even did various pricey home improvement projects (new roof, new furnace, new front door, new shed, new fence, etc.). Although we have come a loooooong way from our first year in NJ, we still have one credit card that carries a balance. A very big balance. We have been paying on this card FOREVER. And it feels like we will always be paying on this card. It is a joint card, and we have both contributed to the INSANE balance. But, I am finally ready to buckle down and get rid of this debt.

It will probably take us at least 2 years to pay off the card (I still want to be able to save a little money every month, so I am not going to sink every penny we make into repaying this debt). And when the debt is finally paid off, we are cutting up the credit cards. If we need something, we will SAVE until we can afford it. Of course, I do plan on having some extremely expensive dental work done over the next few years, so we'll still be in debt. I'll probably end up using CeditCare to finance my care. So, I guess I just lied about cutting up all the credit cards.