To me, our debt total is pretty shocking and frightening, but I know that there are people with more – sometimes much more. (And of course plenty of people with less…) Here are the numbers:
Chase Card #1: $20,604.99
Chase Card #2: $5,837.54
Chase Card #3 (Chase must REALLY love us!): $6,334.72
Discover Card: $11,619.32
Citibank Card: $8,186.88
Total Credit Card Debt: $52,583.45
We’re also the proud owners of a mortgage, two graduate school loans, one car loan, and a 0% interest for one year furniture loan, but our credit card debt is what I’m focused on here. Oh, and we use Target and Home Depot store cards, but pay them off each month.
How Did This Happen??
It’s a very good question, and I can identify several factors. But first let me explain a little about our income. My husband is a professional, and he earns a good salary. He is by-far our primary earner. I work part-time and earn a decent hourly rate, but we have a preschool-age daughter, so half of my salary goes to her babysitter. Are there cheaper childcare options available? Absolutely, but this is one expense we deem more than worth it.
Not only do I work part-time, but my job is essentially seasonal. What this means is that I’m off summers and other school breaks, including six weeks during the holidays. I both love and hate this schedule. I love having big chunks of time off, especially the summer. But it means that I’m only earning a regular income about seven months of the year. Looking forward, though, our daughter will be in full-day kindergarten starting in September, and my boss is allowing me to schedule my hours so that I’ll be home for the morning and afternoon buses. Thus, I’ll be keeping my full hourly net pay.
Back to how this happened… We bought our house when I was six-months pregnant and working at a different, lower-paying job. We had a (different) car payment and our school loans, but no credit card debt. We knew the mortgage payments would be a stretch, but we were tired of looking for a house and really liked ours. Fast forward to my next birthday, when my husband came home from work at 11am and announced that he’d been laid off. At the time, we had no savings, two unemployed adults, and a two-month old baby. Happy birthday to me!
My husband hated that job, so being laid off truly was a blessing in disguise, but we were SERIOUSLY terrified about paying our bills. Fortunately, my husband was able to land another job ten days later. (Yes, I realize just how lucky we are.) Unfortunately, this job entailed taking a $15,000 pay cut, which basically put us into the red. Sure, we probably could’ve really scrimped to break even, but it didn’t work out this way.
Since then, we’ve slowly accumulated credit card debt by living above our means. We’ve also had some unfortunate expenses pop up – two paid-off cars that needed to be replaced faster than we’d hoped, plus huge vet bills for one of our geriatric cats. (I’m talking several thousand dollars in the last year.) We didn’t go on extravagant vacations, buy flashy (or even new!) cars, or take on major house projects. Most of the debt just came from not tracking our spending, not budgeting, and indulging ourselves more than we should have. And of course there’s the fun of compounding interest…