Nina's Soap

Until few years ago, I used to pay off my credit card debt in full every month. In 2009, I lost my job and quickly used my credit card to meet my family’s needs. By the end of 2009, I was over $7,000 in credit card debt with no income. I paid the  minimum due and on time with the help of my husband. His annual income at the time was less than $20,000 and he was the only source of income. For the next four years, I worked part time at a fast food place, prepared taxes during tax season with a company, and substitute taught middle and high school in four towns. My annual income was less than $10,000. When my kids were born, I made the decision not to send them to daycare and I worked around my husband schedule. In 2014, I found a job more related to my degree and by the end of the same year I maxed out my credit card. My credit card debt was over $9,000. My husband also had over $15,000 credit card debts on top of his tuition debt and his leased car.

That same year our both income went up to be around $60,000. Although, we both paid our credit cards on time, we only paid the minimum due until then. Eventually,we decided to get serious about our debts and pay them off.

We tried different methods. For examples, my husband would transfer a certain amount to a credit card with 0% interest and paid it off by the end of the 0%  promotion. We tried to set a fixed dollar amount to pay every month even when the minimum due was less that the set amount. Once a card was paid off, we rolled the payment  to the remaining cards. We tried to pay high interest credit card first. We changed it later to pay the low balance credit card first.  And I tackled the higher balance last. In the meantime I called the company to negotiate the interest rate. They decreased it  temporary at some point.

We both decided to stop using our credit cards. By early 2017, all my credit cards were paid off.

My husband continued to pay his. We raised the amount to pay toward his debts by the amount I used to pay toward mine. In 2017, we put on hold paying ourselves first. Instead of paying over the minimum due for all his debts including, credit cards, tuition and car loans, we paid the minimum on car and tuition loans and paid the rest of our set budget to his credit card debts. We also decided to live on one income and used the other income toward my husband’s debts. Right at the end of 2017, he has little less than $2,000 left on his cards to pay. We paid over $21,000 of credit cards debts within 3 years. We worked together as a team to make this happen. After his last card is paid off, we would tackle his next lower balance and so forth. Living on one income required me to be creative with my food budget and shop sales. We didn’t save for emergency fund when we decided to live on one income.

Emergency fund is supposed to be 6-12 months of a household monthly expenses.

It is not easy to have a year’s worth of income saved up. I thought if I could stock up my pantry with one year of food supply, then one year of emergency fund would be a lot less as it would only include mortgage, and utilities expenses. Building one year of food supply doesn’t require anymore than my current food budget. As I shop sales, I buy extra from what I saved and build my food supply little by little.

A credit card is good to have in case of emergency. Beside that, it is not good to use it just to increase purchasing power. We have used it for both in the past. For instance, I used it for food, so that my husband could use his income toward rent and utilities. There were times when I used it to buy clothes I didn’t need and I didn’t wear that still have tags on until two months ago, in my journey to declutter my wardrobe, I sent many to a consignment store and a thrift store. Someone also charged over $12,000 to my husband’s credit card to teach us how to become affiliate marketers back in 2009 when I didn’t have jobs. We didn’t make any money from it.

I would say that my husband and I didn’t manage our finances well from the start and learned from our mistakes. We are working hard to pay off all these debts so that we can be  better models for our children when it comes to money.

Don’t let your debts weigh you down. Get control of your finances. If you are married, it helps to work as a team. If you are in debt, filing bankruptcy should not be your first option. It is not too late to start paying it off. I wish you luck.