My husband and I got married young and neither of us had been taught how to manage money. What we learned about money management was what we saw.
My husband grew up with an abusive stepdad who had money but never wanted to spend it, so his mom had to work to earn her own spending money.
I grew up in an abusive home as well, but one thing my parents never fought over was money. They seemed to manage it well. There were 5 of us kids, 4 with disabilities, so my mom didn’t work outside the home. My dad didn’t make a lot of money, so we always had to budget, got hand me down clothes, and traveling for us was road trips and camping. When I was 12 my dad was arrested, and life changed. My mom took us out to eat frequently and gave us money to buy whatever we wanted. As an adult looking back, I realize that this was a coping mechanism for my mom. We loved shopping! From the age of 12-16, I watched my mom spend lots of money. It wasn’t until a couple of years after I was married that I realized that my mom had racked up 80k in credit card debt and had to file for bankruptcy. I didn’t think too much of it at the time, just that she did what she needed to do.
All these experiences add up to the basics of what we knew about how money worked and played a part at different times during our marriage.
Since we both came from abusive homes, we knew that not everything we saw growing up was good, so we planned to do better than our parents. We knew the basics of money like most, and I had learned how to balance a checkbook in high school so that’s how we started.
Debt wasn’t in the conversation until somebody mentioned that we should build our credit score and so we got our first credit card. It was a Discover Card, and we purchased a TV. I signed up for a 7-month accounting certificate program at a technical college, which I paid for with student loans. Then a year later we bought our first new car and a year after that, a house. Everything was going great. We purchased a second newer vehicle, a truck. It wasn’t nothing fancy, just a regular cab Chevy 1500, but it was ours and we loved it.
After some medical issues that I had, we found out from the doctor that we needed to consider having kids in the near future if we wanted them. That was not a problem, we planned to have kids someday just hadn’t really discussed the timing. I got pregnant a few months later and everything was going as planned. We were excited, we had a house to raise our kids, good jobs, nice cars and a good marriage. This was the American dream! Life was great.
One day when I was 16 weeks pregnant with my son, I went into early labor. The doctors were able to stop it, but I had to go on bed rest for the remainder of my pregnancy. I worked for a small accounting firm at the time that did not provide any type of leave, so I was just out of work. That really hurt financially but we were managing.
Bed rest started in June and that same month our AC went out. We managed to find a family friend that would loan us the $2000 to buy a new unit and a family friend that could install it for us at no cost. We started falling behind on some things but were trying to manage. After almost losing our son, the money didn’t matter, we would get back on track after I went back to work.
My husband was laid off at the end of October, 3 weeks before our son was born. He applied for jobs every day and was able to find one within a week, but it only paid half of what he made before. Since it was the end of the month, our benefits expired on the 31st and I had to go on state insurance so the delivery would be covered. In a matter of 6 months, we went from both of us being employed making about 60k together to just my husband working making less than 20k. We had a house payment around $700, a truck payment about $300, and a car payment about $250, credit cards (less than 15k), student loans (about 7k) and we owed a family friend 2k. I signed up for WIC and was eligible for a free car seat. We put the student loans in hardship status. Since our car loan was with the same credit union as our checking account, when we fell behind on payments they froze our account. The details are getting a little gray since it was 20 years ago, but I do remember feeling broke.
Thanks be to God our son was born at 36.5 weeks. Besides being small (5lbs 6oz) he was perfect. He went home with us two days later.
Instead of just catching up on car payments we figured the easiest thing to do would be to trade it in for another car. Since I had just started a new job, I didn’t qualify for the loan, but my aunt was visiting and agreed to co-sign for me. They also let us roll our negative equity to the new car (It wasn’t actually new, just new to us.). The payment was higher than we had on the other car, but we didn’t have to start paying it for at least 60 days, so it felt like a little instant relief.
Shortly after starting my new job and trading in our car some friends from church told us about Dave Ramsey. We didn’t know what to think at first but agreed to read the book, Financial Peace. A lot of what we were reading made sense and the stories were encouraging. So, we decided to start our debt free journey, but we wanted instant results.
I was listening to Dave’s afternoon radio show, we cut up our credit cards, sold our house, sold our truck, and got caught up on our credit cards. We moved into a small two-bedroom apartment with our son and life was getting easier. This all happened within a couple of months. Looking back this was our biggest pitfall. We did start budgeting, but because our financial position changed so rapidly it was really easy to get sloppy.