Digging yourself out of a hole part 1


One of the toughest situations people get themselves into is high levels of debt. Whether its credit card, student loans, car or just spending too much. It is hard to avoid, just because there is so much nice stuff out there that needs to be bought with our pay checks. Once confronted with this debts and the realization that one should go pay it back people will make excuses for why they can’t do it. This varies from it being too hard, they like their life style, they don’t have the money to change things and it goes on and on. The real issue is how to overcome these hurdles and really start to manage your debt and instead of debt you have savings, investments and real (paid off) assets.

This is the way my wife and I got out of debt. (some of the numbers and exact life events have been changed to protect the guilty)

Here is the back story to how we got to where we were (heavily in debt and unhappy). We were young and in love and got married with this romantic notion that love would carry us through. We both had rather low paying jobs, we were both going to college and had little to no idea about finances and what exactly that was. Neither one of us had been raised with family who were very good at managing finances (not that we are alone like that). Our combined income was about 2500 dollars and here were our expenses.

–    1290 apartment
–    300 entertainment
–    100 tithing
–    100 gas
–    150 car insurance
–    150 telephone
–    300 food
–    50 gym
–    50 internet
–    40 cigarettes
–    270 car payment

That comes out to being about 2600 dollars and I am not even including any other incidentals, like eating out and so on. This went on for about a year and I think we ended up with about 14K in credit card debt, 11k car loan and 30k in student loans. Then we had a number of mishaps, my wife lost her job and we lost about months salary and then she was involved in a car crash and we now lost my car. To complicate things even more we found out that we were going to be parents.

This was my wake up call, I am going to be a dad and I have lots of debt and no real prospects. What do I do?


One thought on “Digging yourself out of a hole part 1

  1. Pingback: Debt and savings: The envelope system | libertarian dad's Blog

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