This post has been years in the making. And the frustrating part is that we are only halfway finished, but I guess that’s good because it means I can relate to all the people who are still in the middle of trying to climb out of their own hole as well. Are you ready, because this is a long story?
Ugggggg. Today we are talking about debt. Yeah, I know. Blerg.
We have so much debt, you guys. So much. I don’t even want to tell you because it’s embarrassing and who likes talking about money, anyway? But here goes. We started with $126,490.88 of debt, to be exact. And that does NOT count our mortgage. I cannot even. It hurts to type.
That doesn’t even include interest.
How did it get so high? Well….
The thing is, we aren’t even big spenders. We’re really not. (Except for food.) You might not believe me because that number is so ridiculous, but it’s true. I do not shop for fun. We buy a lot of used clothes. We’re fortunate enough to have family in our lives who buy the kids all the toys they could ever need. We cut our cable and use Ooma for our home phone. Eddie does the vast majority of our home repairs himself. You get the idea. I know that sounds like a list of excuses, but it’s our reality.
What we are is two parents raising children with special needs who happened to go straight out of college into the middle of a huge recession and housing collapse. And, as it turns out, that is really, really, really expensive.
We came into our marriage with a lot of student loans, which we’ve been consistently paying every year since we graduated college in 2006. My husband went to an in-state state college (The University of Maryland), had some partial scholarship money, AP credits, and worked five different jobs during his time there to try to reduce that amount. Plus, his parents did pay for half of his schooling. Nevertheless it’s expensive to educate an engineer! Thankfully, I went to undergrad on a full academic scholarship and my parents paid for me to go to graduate school. I worked very hard to finish school a year early, so I graduated without much debt and my education was not very expensive. I did have one very small scholarship from the state of Maryland that we had to pay back when we moved from Maryland to Florida. (They gave it on the condition you would work in the state after graduation, which I did for one year, but then we moved so I needed to pay back a portion). My mom paid that back for us. She said she felt like she was still saving money because it would have cost so much more if she’d had to pay for my entire undergrad career.
Then we got married and adopted our son and, through circumstances that were beyond our control, he ended up not qualifying for the adoption subsidies or medical coverage that children adopted out of foster care normally receive.
He was later diagnosed with many special needs and needed a lot of services, some of which were not covered by our private insurance at all, and some of which were only covered after we paid out-of pocket for our high insurance deductible. So while that money was going to get him the therapies, doctors, and medicine he needed, we still had to eat. And that is when we added some credit card debt, basically just buying necessities like food and gas to get to work. It’s a situation to which many parents raising children with special needs can relate, I’m sure.
In the meantime, while we lived in Florida from 2006-2008 the housing bubble burst and the economy basically collapsed. The value of our home fell by over $100,000 in less than six months. We relocated to Pennsylvania to be closer to family and have help raising our kids, which I still do not regret doing, but it was a huge drain on our savings. While it was a great life choice because our children know their family and that is invaluable, it was also a terrible financial decision. To be fair, we knew that at the time and decided that some things are just more important than money. I’m still glad we did it because our children got to know three of our grandparents who are no longer living and I got to see my brother, who was only in middle school then, grow up, and be close by to help my sister plan her wedding.
My dad did help with our moving expenses and ended up buying an investment home so we could live in it and pay him a very low mortgage, sort of a rent-to-own deal on our end, because we lost so much money on the sale of our previous home. Unfortunately, not long after we moved to PA the company Eddie worked for closed their Pennsylvania office. He was able to find a new job, which was honestly a miracle at the time with the state of the economy, but he had to take a significant pay cut, which was yet another blow. We are grateful for all the help family gave us during that time. I know so many people are not as fortunate as we were to have that help. Still, we lost all of the equity that had been in our Florida home and all of our savings during those years. There were many months when we had to put formula and diapers on a credit card because we just didn’t have the money for groceries. I’m grateful my father was the one who held our mortgage, because there were also many months I called him crying that we didn’t have the money that month, and I doubt a bank or landlord would have been nearly as forgiving.
If you look back in the archives of the blog, you can see there is a time when we had absolutely no money. I was getting the kid’s clothes from a free clothing exchange at our church or from friends or sewing them myself. I usually couldn’t even buy fabric to do that, I would recycle adult clothing family members would give me. There was a Christmas we couldn’t afford presents, so I made everything myself out of stuff we already had around the house. The local news even came over to feature my $0 Christmas. We looked into applying for assistance, but we didn’t qualify because our income was too high. It’s true. We were making plenty of money, but it was all going right back into debt or unavoidable medical expenses.
Fast forward a few years… I did go back to work full-time once our children were in school and it made more financial sense. (Until then it was actually cheaper for me to be home because we couldn’t afford day care full-time for multiple children, plus I couldn’t work full-time anyway since a guardian needed to be at all of the various doctor’s appointments for our son. I did work part-time during those lean years teaching classes for a local non-profit on evenings and weekends, and I monetized the blog and wrote for local magazines.) Unfortunately, almost immediately after returning to work I got sick. We found out that I have a benign brain lesion that mimics the symptoms of M.S., and I could no longer work full-time as a teacher. That came with even more medical bills. We got to a point of desperation and applied for help, but I was denied disability or social security, ironically because of this blog. We make a small amount of money from those annoying advertisements you see on the site, and I’ve written part-time for local magazines making $50-$100 a few times per year, so the government said I didn’t qualify because I could technically still work doing this. It didn’t matter that my teaching salary was about 5x higher than what the blog made at the time.
We took the Dave Ramsey Financial Peace University class and read a few books over the years. It did help some, but I remember feeling so frustrated because at that time it felt like the circumstances we so far beyond our control. The advice was always along the lines of “stop buying things you can’t afford.” Well…duh. Thanks, Captain Obvious. But in our case, that stuff was mostly medicine, doctor visits, and a roof over our heads. There was just no way I was going to stop buying those things. So we felt stuck. We started our debt snowball and followed all of the advice given. For a time we stopped contributing to retirement and savings, and we moved yet again so that we could share housing expenses with my mom. But in the meantime our kid still needed to see doctors and have medicine and we still needed to eat, so it constantly felt like we were taking one step forward and about ten back.
Anyway, that’s all a long way of saying that if you’re frustrated, I get it. There are plenty of Americans, especially millennials and young families, that are in a lot of debt that has absolutely nothing at all to do with buying too many avocados. And I also get that most people aren’t as fortunate to have the amount of help we have. If not for our parents’ generous contributions along the way, our initial debt would have been MUCH higher. But it’s high enough as it is!
I hate being in so much debt because it sucks up sooooooo much of our disposable income. We actually have a pretty high take-home pay now that Eddie is a licensed professional engineer and project manager. We are doing just fine, and can eat well now and afford some extras here and there like activities for the kids. Yet, there are so many things we miss out on because we still can’t afford them, and we miss so many opportunities to give generously to others because this debt is such a huge cloud over us.
The Good News
But, the good news is that no stage of life lasts forever. Eddie has advanced in his career and gotten quite a few salary bumps along the way. And we managed recently to get Nick access to benefits he should have had all along. We are much more comfortable now. Although we are still nowhere near out of the woods, in the past 4 years we have managed to cut that debt in half, and that is with me not being able to work and also adding two additional children to our family. (Disclaimer: Some of the debt was slowly being paid in the years prior because we always made at least the minimum payment on our student loans and, as I mentioned, my parents both gifted us a bit of money to put toward our student loans/housing early in our marriage. Despite their generosity, we still had over $100,000 worth of debt.)
We have managed to cut the debt down quite a bit, so we now owe $64,622, not counting our mortgage, and it’s going down more every month. That’s about half of what it was just a few years ago! It’s still a lot, but much more manageable now, and we have a drastic plan to significantly reduce it even more by this time next year. Our goal is to be completely debt free, besides the mortgage, within the next two years. Fingers crossed. It’s going to take some BIG changes, but I know it will be so worth it!! I’m excited to share it with you over the next few months.
The other good news is that, as of a few weeks ago, we have completely paid off ALL of our student loan debt! It felt like it took forever, but we actually paid off our last student loan seven years early! And we are quickly working toward reducing the other debts as well. We have also been building our savings and retirement accounts. We have finally reached a point where we feel better, although I would still hesitate to call it comfortable because I’m not sure we are well-prepared for emergencies that will inevitably pop up. But we are getting there! The debt snowball does work, even though it feels like you are going at a snail’s pace if the debts are large.
If you’re up for it, I’d like to start a small series on the blog about our debt-free journey because I know that over the past few years reading about other people’s experiences and watching their YouTube videos has been such a huge source of comfort for me. Plus, I do feel like because of our unique experience raising children with special needs, I might have a few tips along the way that could be beneficial if you are frustrated by the typical advice you are receiving.
What do you say, are you here for it?
What are your biggest questions and concerns about wanting to be debt free?
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