Another Family Debt Blog

I’m not a big 12 step follower or anything. But I do believe that two very important steps for beginning a major life change of most any sort, are acceptance and admission. You need to truly accept that there is a problem with something in your life. No more excuses, no more minimizing. And then to fully define what the problem is, you need an open admission of your mistakes and current status. To that end..."Hi. My name is Anne, and I have a problem with debt."

To be fair, my husband and I have known and admitted this for years. And we are not the type to drive around in a fancy new car we're leasing while uncertain how we're going to pay our credit cards this month. Actually, our newest car is 8 years old. And we always have enough on hand to pay our bills (which according to all the political talk you hear lately means we are somehow better off than 2/3 of Americans?!?). But that is not to say we don't have our frivolities. We have a gym membership, grocery delivery and a lawn service. My husband has weaseled his way into getting an iPhone 5 soon, though I will be settling for the 4 (I only have a 3 right now!). We have a 36" flat screen TV and a new laptop. We're not suffering. We're just not winning any achievement awards either. We are very effectively treading water, as we have been for many years.

The description I just gave creates the same moderately dismal view of debt that I think a lot of Americans have. Kind of a necessary evil in which you "do the best you can", trying to make some responsible headway while still allowing yourself some enjoyment of "the good things in life". And I think it is this minimizing, moderate view that has kept my husband and I in this situation for much longer than we have really needed to be here. And since, like so many debt slashers before me, I have have just finished Dave Ramsey's "Total Money Makeover" book, I am now in the mood to take a much more extreme (i.e. honest) stance about our current situation.

Let's just start with a number. $327,758. As of Oct. 1, 2012, that is where our total debt stands. About 60% of this belongs to our mortgage. Another 32% to my student loans. (Boo!) The remaining 8% is a combination of credit cards and car loan. Keep in mind that 8% of $327,758 is over $26,000. Keep in mind also that although we may not be suffering, this total number is still more than three times our combined yearly income. Ugh. To top it all off, we have not a dime saved for retirement or college for our boys, and we will probably end up co-signing on $30,000 in student loans by the time my daughter graduates from college (though hopefully that will be her problem, not mine). We are in deep shit folks. I mentioned we're 30 something, right? And let's just say that we're closer to the later end of that then the beginning.

Despite our seeming record to the contrary, I am actually a big believer in Ramsey's assertion that debt of just about any sort is just no good. That we have all bought into a lie that serves the lenders rather than ourselves. And that mostly, the only excuse for using credit cards is poor planning and difficulty with impulse control. Ouch. We suck. I have lots of good excuses for our credit card debt that I have pulled out in the past to soothe these sharp criticisms. And I will say at least that my husband and I are generally not people who use credit cards for shiny new toys or entertainment much less basics like groceries and clothes. Mostly, these were one time or unplanned emergency expenses (that being said, I can think of at least one exception to pretty much each one of those things I just mentioned.) None the less, even the unplanned things were mostly due to not saving for an emergency fund the way we should have to begin with. There was some impulsiveness in there as well for sure. (And a very shiny toy indeed in the form of a ring that now sits upon my wedding finger.)

I want to be completely honest about this because I am tired of being in credit card debt. I am tired of wondering what on earth we would do if one of our cars died. I am tired of feeling trapped in my home by having no home equity. I am tired of feeling too daunted by my student loans to even begin handling my retirement. And I am sick to death of feeling like this will be the year we're finally going to start getting ahead a little, only to somehow have all the extra trickle away with no lasting effect on the bottom line. I am ready to get serious about this. I am ready to start making some sacrifices. I am not sure about "gazelle intensity" (maybe just cause I really hate that phrase?) but I am willing to begin exploring options I haven't been willing to consider before.

But I need something to keep me motivated. And I need a way to work out the serious anxiety I am feeling about all this. And a place to put down some of the things I learn and maybe even help someone else in the process. Thus, I started a blog! :)