Just How Bad Is It??

The Numbers

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…

 

 

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10 thoughts on “Just How Bad Is It??

  1. Patricia says:

    Thank you for being very honest with your credit card debt. I look forward to watching these figures decrease in the coming months or years. Please keep us updated. Also, if you do not pay the furniture loan off with in the allotted time frame the interest is back dated to the beginning of the loan. What things is your family cutting to pay these debt off? I saw that you have cooked all meals at home, have a budget, and using coupons. Good job. Remember to not spend money if it is good deal if it is not needed, but shop with a plan and stay out of the stores. I have had this problem and hope you can avoid this.

    • Thanks so much for your comment and support, Patricia. Yes, the interest on our furniture loan goes up to something hiddeous like 28% after the one-year, no-interest period. And I’m sure you’re right that it’s calculated all the way back to day one, if not paid in full. Thus, I budgeted to pay this off (just under $300 per month) within a year. Our highest credit card interest rate is 14.9%, so sticking with the furniture payment plan is a top priority for me.

      And you are so right about not being tempted by good deals, just for the sake of getting good deals. I read about one on men’s deodorant at Target last week ($0.35 each, after coupons), but held off because my husband has plenty of deodorant in his stockpile. I definitely struggle with “good-deal” temptation, though!

  2. Well the first part in changing habits is getting real. And I can’t imagine you getting much more real than posting your debt for the world to see!

    Congrats are starting this journey. You will be surprised at how much you can save!

    Have you worked out a budget yet?

  3. Hello! It’s great to run across your blog via Prudent Homemaker. I am so sorry about all your debt but am amazed at your tenacity to get out of debt. Great job! Are you still working seasonally?

  4. I feel for ya, GF! I would love to see a post of how you have your income allocated across spending and debt repayment sometime. Welcome to the world of PF blogging and debt slaying! I’m a wrangler myself!

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