This week, we’ve been living on what’s in the pantry, in our stockpile and in the freezer, and it’s made for some very interesting menus! Rice is a staple in this house, so red beans and rice is a given. [...]]]> so nice, I could eat a plate twice. And that’s what we do. Over and over.

This week, we’ve been living on what’s in the pantry, in our stockpile and in the freezer, and it’s made for some very interesting menus! Rice is a staple in this house, so red beans and rice is a given. But egg rolls and green beans? Pot roast in a bagel? I’m sure it’ll get stranger and stranger over the next few days, as I don’t get paid until Feb 5th, and have no budget for groceries. Thanks to couponing, we have an abundance of canned tomatoes, a whole lot of soup, cereal, mac’n'cheese, plenty of popcorn, a nice stock of canned veggies, pasta, hot chocolate, cake mixes and frosting, and jello. So we won’t be stuck for food to eat, we’ll just be eating strange combinations. I’ll also be able to find out how far past it’s “use by” date you can eat tofu.

I had somewhat of a mini-breakthrough tonight. I’ve been getting calls from a 1-800 number … you know the ones, you answer and there’s no-one there? They called about 15 times a day. Much of the time I was at work and couldn’t answer, or driving home (and I refuse to talk on the phone while I’m driving), or eating dinner. Sometimes, I just hadn’t turned up the ringtone volume on my phone after leaving work. But every time I did answer it, there was no-one on the other end. I googled the number, and sure enough, it was my bank. So, I finally ended up getting to talk to them this evening, and they explained that they do have a hardship plan. They would reduce the interest rate from 17.99% to 6%, and take monthly payments by direct debit. As I was already over the limit and behind two payments, they would have to take two in February, but the man on the phone was very understanding, and very helpful. He truly put my mind at ease. It is National City (now PNC) who I owe the most money to, and – granted – at this rate it will take me about 10 years to pay off that credit card, but that’s not nearly as bad as the alternative. I’m still working on a way to avoid bankruptcy.

I have an email to read from a good friend, explaining how they managed their family’s debt, and I still need to talk to the credit counselor again, now that National City have reduced my interest rate, but I’m feeling a little less pressure now.

And I love red beans and rice.

Yes, it was hard. I wanted to convince myself that I could keep one card in a draw somewhere because I would surely have a future emergency that necessitated the [...]]]> It’s been just a couple of weeks since I cut up the credit cards, and I’m looking forward to my debt-free future with renewed enthusiasm!

Yes, it was hard. I wanted to convince myself that I could keep one card in a draw somewhere because I would surely have a future emergency that necessitated the use of funds I don’t have – but that’s the thinking that got me here.

I, like everyone else, started off with one credit card. When the bank raised the limit for the first time I seriously thought of calling them and telling them that I didn’t need it, and could they lower it again, please. But my “what if” thinking tricked me into believing that I wouldn’t go over my previous limit, and it would be good to have that buffer in case I had an emergency. There’s that word again!

Now, there’s a little history here that you may not be aware of. When I moved from Australia to the US, I pretty much sold everything I had and used all the money I had to get me and my “stuff” here. Rightly or wrongly, I believe the man who told me he loved me and would take care of me. The same man who told me he was “doing fine” – he was working all the overtime he could and was in a position that I wouldn’t have to work. The same man who, I discovered once I could see through the bullshit, earned about $28 an hour, worked many hours of overtime, but couldn’t put food on the table for his family. But that’s another story.

Long story short, when the marriage was over, I had no money, no income, no support, and two babies to feed and take care of. Of course the credit card was a godsend! It enabled me to feed my family, to clothe my family, to pay my utilities … to get by. I realize now that using a credit card is like using a drug. You get to rely on it. Heavily. And I did.

I did OK, I got a job, paid the bills that were left when I was abandoned for another woman, bought a car to replace the one that was given to me as a gift then taken away again, and I bought a house. Yay for me.

But I still have the credit card, and day by day I’m digging a deeper hole.

I thought it would help my bookkeeping skills if I had a credit card that I could use JUST for purchases for the girls. Then I could use that little ol’ child support check to pay it off each month.

MEEP.

Wrong!

The 0% interest was wonderful. But of course it ended.
The theory that I’d use it just for the girls was wonderful. It was just too easy to bend the rules.

Before I knew it, I had one credit card with a $10,000 balance, and one with a $2,000 balance. And I’m barely making the minimum payments each month.

But I can refinance my mortgage!

I set those wheels in motion, and I had joined mint.com to try to get a handle on my finances. Mint.com is fantastic. You can see all your accounts in one place, see what you’re worth, see what you’re spending, and see how to save money. One of those graphs showed me that I could save $2,000 a year on my credit card by switching to a different credit card. So I applied. The deal looked great, zero interest on balance transfers, zero interest for 6 months – how could I lose?

I lost.

What I didn’t count on – and I feel stupid looking back – was that the credit card that I was issued had a limit that was nowhere near the amount I needed to transfer all my credit card debt! Stupid, stupid, STUPID!

So, by this time I have a credit card with a $10k balance, a credit card with a $4k balance and a credit card with a $2k balance. Oh, I’m not maxed out on the lower limit cards, I have some wiggle room, but the large one is busting at the seams.

But now the cards have gone. Cut up. In the shredder. No more. And I have a plan. And I have my bills lined up on the wall in front of me according to when they need to be paid. I’m using a combination of the wisdom of Jerrold Mundis and Dave Ramsey.

I’m so confident I can do this. The girls are both aware of the situation and know what’s going on. Nothing really changes for them. They still get their allowance each week, but they have to learn that we’re no longer swinging through the drive through for dinner. We are just really watching what we spend. We are being much more careful with the money we do have, and are putting 10% of my (net) pay in an emergency fund. I’ve come to realize that a credit card is not the answer to an emergency – an emergency fund is much, much better!

My financial health is improving. The holiday season is coming up and I have to make sure that I set some ground rules regarding gift giving and receiving, because I’m not going to get further into debt because of Christmas!

I don’t know how long it will take to get out of this mess, but I’m sure it’ll be less than the 10 years it took to get into it!

Why don’t you check back now and then to see how I’m doing? Right now, I’m ecstatic that I have $100 in my emergency fund! (Ha! No! That’s not 10% of my pay check. I sure wish it was!)