How I Paid Off $27,000 in Credit Card Debt in Two Years
I live in Graham, Texas, with my husband and three children, who are 17, 14 and 9 years old. I work full-time at a public school as an "intervention" teacher, helping kids who need an extra push academically with reading and math.
When I first started racking up credit card debt, my husband was running two businesses, which we co-owned: a store that sold farm equipment and an auction company. The farm store wasn't doing so well at the time, so a lot of our money was going toward that business.
I had always been responsible for running the household, so when I didn't have the money for groceries, or for gas, I would just put it on my credit card. And then, occasionally, I would splurge on something and put that on the card as well. In three years, I racked up close to $63,000 in debt. It seems like a lot, but between paying for all the household utilities, food, phones and car payments -- and taking care of three kids -- it all adds up fast!
Dana's Wake-Up Call
My husband found out about one of the credit cards (there were six), and he was very upset about the balance, obviously -- he hadn't known that I had accumulated so much debt. And that was just the tip of our debt iceberg: He didn't even know how much was on the other cards!
Creditors had begun calling the house as well, and that's when I finally realized I needed to gain control over our finances and turn things around. I was so overwhelmed and stressed about it all the time, and I didn't want to be any longer. I had gotten us into this mess, and I knew I needed to make some big changes, for the good of my family.
So, I decided to get aggressive with our finances, trying to earn more while simultaneously paying off debt and learning to live with a whole lot less.
Taking the First Steps
From my work as a teacher, I bring home about $2,900 per month. I set up automatic payments: $1,500 goes to paying off the cards with the highest interest rates, and the remainder goes to utilities, groceries and gas. My husband takes care of the mortgage payments, car insurance payments and extras for the kids like baseball-related expenses for my son, or summer camps, so I'm not responsible for those expenses.
Once I set my mind to paying down our debt, I tried to streamline every aspect of my life. I got rid of our second phone line and cut my gym membership -- I just started walking more for exercise. I used to get manicures frequently, which I cut out altogether, and now I just get my hair cut once a year. We used to eat out as a family, which we no longer do, either.
Plus, I started reading a lot of LearnVest articles, and I watched all the courses, which gave me a lot of good ideas on how to manage my money. I also signed up for email newsletters from a site called 5 Dollar Dinners, which sends coupons each day.
Baking My Way to Earning More
I also started working more outside of my job as a teacher, which allows me to contribute more money to paying off my debts. I sell Mary Kay cosmetics, and I can make between $300 and $400 for a two-hour Mary Kay party. Not bad!
Additionally, I bake cakes for events and weddings. My mother baked cakes so she could earn money while being a stay-at-home mom, and I swore up and down that I would never bake cakes. But when I needed the money, I thought, "I could do that, too!"
I sell little birthday cakes for about $25, and wedding cakes for $3 per slice. One time, I sold a wedding cake for $1,500! All of this extra money I put toward paying off my credit card debts more quickly.
Raising Kids on a Shoestring Budget
When I decided to take charge of my finances, I told my kids that things were tight, and that they would need to start saving up for the little things they wanted. I try not to make them stressed about money, so I won't go grocery shopping if they're with me, because they'll want things that aren't on the list, and that doesn't fit with the budget I need to follow.
How I Still Manage to Enjoy Life
As of April, I have a little over $36,000 (of the original $63,000) left to pay off.
I'm obviously really committed to paying off this debt, and working these part-time jobs does take a lot of time. But if something good happens, like I sell an expensive cake and can pay off an extra $200 on a credit card, I'll treat myself a little. It's always small, like ordering lunch for $6 or stopping by the Dairy Queen. Now that I'm not used to splurging all the time, even the littlest splurges seem much more special.
And I know that when I finally pay off all of my debt, and can settle my children in at college and help them financially, I'll just feel incredibly relieved. Just thinking about that motivates me to keep going.
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