View Full Version : Were you ever in debt? How did you pay everyone back?
awakenedsoul
4-9-14, 8:20pm
Were you ever in debt? How did you pay everyone back? I was in debt when I was a dance/yoga teacher. My main problem was underearning. My salary as a performer was double what I made as a teacher. I got out of debt by taking on a second job. I sold produce and worked as a cashier at a local farm. I received a windfall. With that I paid off my house, SBA loans, and credit cards. I used the Dave Ramsey worksheets. I also listened to Suze Orman and read some of her books. How about you?
Sure I was in debt, but my knight in shining armor came by to rescue me and the story ended happily. That's really the way it should be, women marrying men to get them out of trouble. (Not! haha.)
Now for the real story: I had a mortgage as a single woman but no other debt. I met DH, we got married, we sold that house and moved to another city and from that day forward had no debt. We bought a cheap house for cash that was not habitable until DH installed basic staircases, heating, cooling, pulmbing, and electrical systems. After that, we lived for 20 years in a fixer upper. Now it is sort of done, more or less.
awakenedsoul
4-9-14, 9:44pm
iris lily,
Another archetype! The damsel is one, too. But that's another thread. That's a great story, thanks. I live in a fixer upper, too. I wish I'd taken before and after photos.
ToomuchStuff
4-10-14, 1:16am
Yes I was. Worked a lot and spent less then I made. At one point in my life, I worked two jobs, 7 days a week, for 3 years, with a total of 9 days off, during that time.
We carried debt most of the time the kids were at home. It was the double whammy of 3 kids and low income. Now our net worth is not only positive but growing steadily. It's the double goodness of high income and only 2 of us at home. Life changes things up a lot ...
We always lived frugally but there were years when debt was unavoidable. We still live frugally in a 630 sq ft apartment with one shared vehicle ... Savings about 30% of our gross income for retirement.
Some of debt free is choice. But some of it is not, and I wish those Dave Ramsey and Susie orman types would recognize that and show a little mercy for people scratching out a living on low incomes.
awakenedsoul
4-10-14, 10:34am
Yes I was. Worked a lot and spent less then I made. At one point in my life, I worked two jobs, 7 days a week, for 3 years, with a total of 9 days off, during that time.
Wow! That's impressive. Thanks for posting.
awakenedsoul
4-10-14, 10:37am
We carried debt most of the time the kids were at home. It was the double whammy of 3 kids and low income. Now our net worth is not only positive but growing steadily. It's the double goodness of high income and only 2 of us at home. Life changes things up a lot ...
We always lived frugally but there were years when debt was unavoidable. We still live frugally in a 630 sq ft apartment with one shared vehicle ... Savings about 30% of our gross income for retirement.
Some of debt free is choice. But some of it is not, and I wish those Dave Ramsey and Susie orman types would recognize that and show a little mercy for people scratching out a living on low incomes.
Glad to hear things have turned around for you, Tammy. 30% of your income is a lot! One of the positives about having had a low income is that you have always lived frugally. It's like your habits are already disciplined not to overspend. I like what you said about living in a small apt. and sharing a vehicle. That kind of stuff over many years saves a lot of money.
Yes, we went bust with the Houston oil economy in 1987. We had a house/pool/car/lifestyle debt that we could no longer afford. How did we get out of debt? I finished Pharmacy School, put DH through Pharmacy School, stopped spending on anything that wasn't absolutely necessary, moved to a much smaller house, paid off debts one by one, and finally paid off the mortgage. Never again.
awakenedsoul
4-10-14, 1:34pm
Yes, we went bust with the Houston oil economy in 1987. We had a house/pool/car/lifestyle debt that we could no longer afford. How did we get out of debt? I finished Pharmacy School, put DH through Pharmacy School, stopped spending on anything that wasn't absolutely necessary, moved to a much smaller house, paid off debts one by one, and finally paid off the mortgage. Never again.
Wow! Good for you. I know what you mean. I cut up my credit cards and I won't go into debt again, either.
I had a smallish student loan debt which was paid off the same month my kid was born. I also financed cars and some things on credit cards over the years, along with a mortgage. Nowadays I still have a mortgage but no other debt. I own my car and a tiny rental house outright.
Mainly I am like Tammy in having managed on a lower middle class income for many years. However, once the nest was emptied and I hit the higher earning years of my 50s, it's amazing what a difference it can make.
Also agree that browbeating people with low incomes by simply categorizing their situation as an individual shortcoming ignores the economic realities of our times - Not helpful.
I've had a few cycles of indebtedness. I'm wondering what karma am I working off here?? I know I am responsible for the debt, and I accept that. But I truly am, at my core, a simple liver. I always have been.. I was happy being a companion for my greataunt as a teen when my friends were getting jobs so they could buy cool clothes (I made my own). I cried when my mother bought a second TV. All of my furniture is second hand (except for a first-hand couch that my MIL bought us for our 25th wedding anniversary 12 years ago).
So I constantly ask, what's a nice girl like me doing in a place like this?
I managed to pay off $120,000 worth of debt a couple of years ago.. with the help of Dave Ramsey. And then we inherited a house in the midst of the housing crisis. For that reason (and a few others), I have regenerated that debt. Yes, I would have done things differently if I could, like letting that darned house go to foreclosure.
Truly, I need to sell my own house, but I get resistance from DH. I may veto his decision at some point. My life is worth more than a house.
So, I am still in debt, and as always, I'm scrambling to find my way out. Thanks for the inspiration.
rodeosweetheart
4-12-14, 10:41am
We were in debt because we were living beyond our means, buying a house where we took on two mortgages. Sold that house, went back to our paid for house, lived there another two years, had about 30000 of remaining medical debt and consumer debt. Sold the paid for house, moved to a foreclosure with no plumbing, heat, animal excrement on the walls and floors (that was, admittedly, a lowpoint--bathing in a 5 gallon drum bucket after a day of scraping, in 90 degree heat) paid for travel to son's wedding and dh's surgery copay with cash, worked 5 jobs between us (still do), did all work on house ourselves, lived without central heat and air for 2 years, and worked our way back up to having savings.
I hate debt and do not ever want to go there again; would make it a deal breaker in teh relationship--debt to me is as damaging as alcohol to the alcoholic. Dave Ramsey and Debtor's anonymous taught me that truth about myself. I have a lot of denial around money and a strong desire to spend money in what i perceive to be taking care of others and "doing the right thing."
I have to be on watch for that, personally.
catherine
4-12-14, 11:00am
-debt to me is as damaging as alcohol to the alcoholic. Dave Ramsey and Debtor's anonymous taught me that truth about myself. I have a lot of denial around money and a strong desire to spend money in what i perceive to be taking care of others and "doing the right thing."
I have to be on watch for that, personally.
Wow. I so relate to that, rodeosweetheart.
awakenedsoul
4-12-14, 1:05pm
I agree, too. Louise Hay refers to debt as an addiction. I never understood that until I got out. I've been out of debt for about four years, and I feel like I got my self back. Before, all I need was worry and scurry about money...
ToomuchStuff
4-12-14, 2:24pm
I understand the debt being like alcohol (temptation), but to me, debt would be a symptom, not a disease. I think in part, it is how one is exposed to money and raised.
I have NEVER understood using debt to live l lifestyle beyond ones means, or how one gains huge credit limits that allow them to do so. Debt is a tool, like income is a tool, to me, at least.
Lesson's I learned that may have affected this were:
Food or stuff (as a kid, I could use my lunch money for lunch, or save it up for stuff/movie/etc. Was almost my only income until 16. Other income would have been birthday/Christmas money, or the money I on occasion got paid for mowing grandma's lawn; that got used to by things needed to fix stuff over there)
At 18, was responsible for myself (was interested in the case of the daughter suing parents for school, because I have never understood how a judge orders divorced parents to pay (at least part) of continuing education, and no other parents are responsible for that). I think this one is the one that would make kids realize they don't start out where their parents currently are.
Exposure to various income levels. (still exposed to this one, highest earning friend (not knowing everyone's income), makes what I make in a year, in around 10 days)
I got out of debt, besides mortgage, by folloing Your Money or Your Life, these boards, and Trent Hamm.
Teacher Terry
4-12-14, 4:06pm
I never had debt until about 7 years ago when my hubby & I got the not so brilliant idea to buy rental property. Well prices & rents plummeted and then not wanting to admit defeat we spent all our savings trying to save the situation and then went into CC debt trying to maintain. Eventually we had to shortsale all 3 properties. Fortunately at the time we had good jobs so we cut everything possible out of our budget and just paid off all the debt. It took about 3 years. We then saved enough $ to pay cash for a small price because the real estate hit bottom at about that time. Then my hubby got laid-off & unable to find another job. We were stupid & I never intend to do anything risky again. We are just lucky we came out of it ok.
I got into major credit card/car loan debt. I stopped spending, joined these forums, read every single book (from the library or by reading it at a book store) on personal finance I could find, did the debt snowball, and did a bazillion other things to minimize my spending and maximize my income. Finally did it, then was stuck with a house that was $66K upside down. FINALLY arranged a short sale which the bank agreed to. DH finished paying off his child support at about the same time, and now we're almost completely debt free except for our car loan, which only has about two more years to go. Whee! I NEVER want to go back to those days of constantly having to worry about my debt and be carrying that burden around!
Other a car loans and a home loan, both of which were paid off early, I've not had much debt and have never had a credit card other than a debit card drawing from my bank account.
I lived at home during my first couple of years of college and when I went away to finish a degree my expenses were roughly a 50/50 split between great parents and part time jobs. I had roommates during a few post college years and then rented for several years to save money a for a large home down payment. When I bought my home I actually had to get letters from the utility companies and landlord saying I paid bills on time, because I had zero credit references.
I attribute much of my debt free life to simple and frugal living, but I can easily see where debt or significant debt could be virtually unavoidable for folks who marry and have a family early in their careers.
awakenedsoul
4-12-14, 5:20pm
Thanks for all these stories. Seems like the common theme is what a relief it is to be debt free. I remember when I was paying off my SBA loans, I still had a car payment and a credit card. $250.00 a month was going towards interest!!! Once I sat down and figured it out, I realized why I was running through my cash before the end of the month.
Blackdog Lin
4-14-14, 10:34pm
Our indebtedness came and went in cycles (like many stories above), but in the (late 90's? early 00's?) I found ourselves in what came to feel like way over our heads in CC debt. Treading water, never getting ahead. Around the same timeframe I found the earlier incarnation of this, our, today's, Simple Living Forums.
Saved our financial lives. Seriously. I guess it was just a serendipitously (woh. that word was tough.) convergence of my realization that our bad financial situation could perhaps be solved with my burgeoning desire to "live lower on the food chain". Granny's lessons of thriftiness started making sense to me. The people of the earlier Simple Living Forums gave me support, and we all shared similar stories, it seemed, I wasn't the only one dealing with these troubles, and everyone kind of made it fun and a game to live poor to get out of debt.
And it stuck with me forever and I was able to stay thrifty and out of debt and then I was able to retire early and live simply and life is really just marvelous and all in large part due to this forum.
True story.
awakenedsoul
4-14-14, 11:26pm
That's great Blackdog Lin. Mrs. M. and watergoddess always speak very fondly of that group. Thanks for sharing your story. I know what you mean abut Granny's lessons of thriftiness. I read a lot of books on the Great Depression. I started practicing all of those habits: food growing, darning socks, mending clothes, making do...it really worked!
awakenedsoul
4-16-14, 7:47pm
That seems to be the theme...no more debt. It does really weigh you down. It sure helps to buy your house at the bottom of the market. Lots of discipline in these stories. Thanks! Cash is such a different energy than credit.
I am currently in over $150k of student loan debt (public loans from the govt; none are corporate loans). Every time I say this or write it or type it I look at it sideways and think: That is just crazy!
But... That is my only debt. I have never had a credit card. I paid off my Nissan Versa 18 months into a five year loan. I paid off my ex-wife after the divorce. I had a monthly payment I had to pay her for 5 years after the divorce. But I ate a lot of lentils and was able to pay her off in a year by making quintuple payments.
Snowballs happen the other way too.
I didn't intend for this to happen because we were debt free (except mortgage) for 5 years. Then my husband found a little truck, then we had a year not really learning to live on less and suddenly I realized the CC debt was back to being a regular part of my life, then some medical things not covered. And every month I feel like I'm starting over and not getting very far.
Very true about the bad kind of snowballing. I actually fear sometimes that I will have to go into more debt, like because of some sort of emergency.
awakenedsoul
7-10-15, 8:14pm
I have found in my life that debt attracts debt, and money attracts money. It's almost like the subconscious is like a magnet. The Dave Ramsey work really shifted my thinking and habits, and I finally was able to wipe out the debt quickly. I made some huge changes in my life, though.
TVRodriguez
7-28-15, 12:11pm
DH & I had a lot of student loan debt. Between us we had over $300,000 in student loans. I dug out from under my $65k loans before we got married, then started on his. Larger salaries than most people, but we stuck to our low cost of living to keep making extra payments. We were both used to living like students, so we kept that up for the most part.
When I first was confronted with my monthly payments of about $750, six months after graduation, I was making $37,000, taking home I think $2400/mo. So it was a large chunk of my income going to the debt. And I decided to double down, living cheaply, first with roommates then back with my parents (paying them the same rent I'd paid in the apartment), and sending an extra payment of $800/month to get rid of the loans faster. I stopped buying clothes altogether, darning socks if they had holes. I reused envelopes. I rolled coins. I would stop at one drink if I went out with friends, to keep my own bar bill down. I sought out freebies. I bought more produce and less meat. It all worked, and in four years I'd paid it all off. Then I married DH and started on his debt. He also had about $65k in business loans from starting his own practice.
We lived in a small apartment until they kicked us out (the place went condo). We bought a fixer upper that DH fixed up. It's small (1200 sq ft) but large enough for us. We had 3 kids along the way, and they all share a room for now. We (well, I) briefly thought about buying a larger house, but with the prospect of paying off our mortgage in sight once DH's loans were gone, we decided to stay put. DH created another bedroom using a false wall in the Florida room, so once the kids are too big to share, one of them will get a single and the other two will share. We bought used cars for cash and keep them running as long as possible. And they're not luxury cars, much to the chagrin of my colleagues, who thought I deserved "at least a Lexus."
But now we have no student loan debts, no mortgage, no debt at all. And we are happy!
We were debt free before my daughter started college - although we had the cash to pay tuition, my husband wanted to take out student loans with the thought that the interest we could make on our investments would offset the interest charged by student loan co. He promised her we would pay back the student loans. Along the same line, took out a home equity loan to do some repairs/small remodel in the house - again with cash sitting in investment accounts. I agreed to all this.
Fast forward, 8 years later we have about $13,000 due - I've worked up a plan to pay off the 2 student loans and both HELOCs using some inherited stock, money market $$ in the investment account and some from basic savings - giving us an additional $500 each month to help offset expenses in retirement .(I am currently retired though work very partime and DH will retire 6/2016.)
Right now, we make just enough to cover all the basics - which means all bills are paid, groceries on the table, gas in the car - but if we want to even order a pizza for delivery, it takes a bit of manipulating $$. It will be a relief to have this behind us.
Lesson learned, from this point on, if we can't cash flow it, it doesn't happen!
I was debt free until around 28, then I lost my job and was working too many menial paying jobs to get ahead. CC's kicked my butt and I admit, I bought a few things I should have not bought. Then I met hubby and he had an ex-wife with finance issues. He walked away from it all, gave her everything and we worked the next 5 years cleaning up his credit and slowly paying down our own debt. We took a little hit in 2014, with 2 funerals, complete with airline tickets, hotels, rentals, food, etc...cost us over $10K for both trips to New England but that is life. We are close to paying off all that. We still have the mortgage, but are putting an extra $110 towards the principle each month and I have a Jeep, with $50 extra going towards principle. We still put 10% of anything that falls into our checking account away. We have a few retirement accounts, some stocks and a small savings. We are not high earners but we have always lived simple and I have my natural frugal Yankee roots that help us get by. :) While most people were spending in their 30's, we just kept plugging away. We feel we are finally coming out ahead.
First I had to decide it was imperative to pay off the debt as it was just hindering my life. I worked for 3 years and almost all earnings went to pay off credit card deb t. Officially this past July we were debt free ( credit cards medical bills, paid off car loan)! (Still had a mortgage) So then our credit was excellent we bought a second home( investment) putting most of the savings in the down payment.Now we have some debt again and a second home I hate having debt regarding credit cards etc.. I am learning how to budget better and food is most costly since we have 2 teenagers and an infant. I am not working right now we are on 1 income for 5 people. So its gonna be a big challenge.Sometimes debt is inevitable so I always try to sell some extra stuff on craigslist , ebay etc.So July I was debt free for a whole 30 days and felt like a million bucks!
We used the "snowball" method for paying down out debt. We had credit debt and some medical debt. With medical debt, since there is no interest, we paid minimum. We always made sure whatever money we had coming in, we paid ourselves first to savings- 5-10% depending. I analyzed EVERYTHING we had going out and coming in. We moved a lot and we learned to sell off a bunch of stuff and put that towards debt. I can say, our simple living has finally paid off. We worked extra hours, stuck like glue to a budget, being very meticulous when we shopped and I stayed away from social media, because that can just make you feel bad about yourself. I can tell you, if you stick to it for even a year, you can make a HUGE difference in just 1 year.
I totally agree TxZen ! I am getting there you have to understand the system and stick to it then there is no turning back. I was never a consumer type person anyway but I am a sucker for travel.You have to learn to live below your means. Im glad I got it now but my parents and in laws still doing yoyo-ing with their finances even though you explain. They dont care it looks like thats all they know financial drama.I would love if someone took the time to explain finances so I could avoid all that money we lost in paying back in interest. But we learned the hard way. Thanks for sharing!
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