My first marriage ended in divorce and it resulted in a big financial change for my kids and me. I resisted this change and continued our normal spending patterns thinking it was punishing the kids to change their lifestyle. You can probably guess how that ended.
I accumulated a lot of debt and hope my experience can help others avoid making the same mistakes.
The first couple of years after my husband and I split up, our standard of living stayed the same. It wasn’t lavish, but I would buy my kids new clothes when they needed them, insisted on a nice apartment in a good school district and paid for costly sports.
There weren’t vacations other than staycations or visiting family. If I didn’t have cash which happened often, out came the plastic.
At first, I kept up with the credit card payments but the balances kept getting higher and higher. Eventually, I was unable to make ends meet and avoiding collection calls.
It’s amazing how many people put their heads in the ground when debt becomes overwhelming. It’s because of shame, embarrassment and the feeling of failure.
Finally I admitted I needed help and turned to credit counseling. I contacted the local chapter of a national nonprofit credit counseling organization. It was relief just to share the situation with someone.
We developed a budget together and came up with a payment plan. They helped me consolidate my debt into one monthly payment that was manageable. The organization also convinced most of the lenders to eliminate or reduce the interest rate.
I eventually paid off all my consumer debt after a few years. My goal wasn’t to be eliminate all obligations though. I thought as long as I had a reasonable amount of debt and had no trouble making monthly payments, there was no problem.
Planning for my retirement headed onto the path of becoming debt-free for life. I haven’t made it yet, but will eliminate all non-mortgage debt in a few months. Within five years I won’t have any debt for the first time in decades.
Reflecting on my debt story keeps me focused and motivated. What helps you on the path to eliminate debt or stay debt-free?