Back to the Future: Part III: The Ugly

Several commenters on the “10 Years a Blogger” post wrote that they would be interested in reading posts from my earlier blogs. While the administrative duties of managing more than one blog are more than I want to take on, about midway through answering comments I realized I could still share selected posts from those blogs. So, I’ve decided to start by offering up one of the earliest posts I wrote from I’m Losing It Here, and if readers are interested in knowing more about how our story progressed I’ll continue to share more.

The post below, published on December 31, 2009, is actually the third in an initial series I wrote in December 2009 when I started I’m Losing It Here. I called the series “The Good, the Bad and the Ugly.” The first two posts were about losing weight (that at least had been going somewhat well), but the main effort behind starting the blog was to document facing and getting rid of the massive amount of debt (over $65K) we had accrued. Part III: The Ugly was the beginning of that story.

BTW, Brett initially did not want me to use his name, so it won’t show up in I’m Losing It Here posts. He’s always “my husband” or “Mr. Losing It” or something along those lines.

Part III: The Ugly

If debt were categorized like weight, my husband I would be considered beyond morbidly obese.  We are drowning in deep, massive debt. While we are still able to pay all our bills on time and put food on the table, we finally had to accept at the end of this year that it had gotten out of hand, and we had to get rid of it or we would sink and drown.

Up to and during 2008, times were good.  My husband got tons of overtime so paychecks were big and fat.  I didn’t have to work, and stayed busy volunteering at my children’s’ schools, or driving them to their activities, or back and forth from school.  We put money away each month and were able to pay cash for our 8-day Disney vacation in early December 2008.  When I went to the grocery store or Costco, I filled my cart with whatever caught my eye or whatever I thought might be tasty.  While we didn’t shower the kids with anything or everything their hearts’ desired at the moment, there still was no problem getting them new clothes and shoes when they needed them, or paying for field trips or school supplies.  I bought myself and my husband new clothes now and then without worry (although I’m actually not a big shopper).  We had a new patio installed and some other landscaping done because the financing was so good and we felt we could afford the payments.  The spike in gasoline prices wasn’t an issue, mainly because one of our cars is a hybrid and also because we are just not that into driving all over the place.  There was no problem paying for the children’s music lessons, braces, etc.  We thankfully have good medical insurance and were healthy all year so we didn’t have any major expenses in that area either.  When we came home from our Disney trip, my husband had received a nice bonus from work which paid for everything for Christmas.   He also received a nice cost-of-living raise on his military retirement.

Things started to change late October 2008 when my husband’s manager announced that effective immediately, there would be no more overtime (note: The amount of work coming in for Brett did not cease nor diminish, however – it just began to back up).  We had forgotten how small his regular paycheck was, but with what we had put away we were able to continue to cover expenses. His employer also announced that there would be no pay increases for anyone in 2009, which caused us to take a small gulp. I decided I needed to find something to bring in a little money, but something that would not interfere with the children’s activities or school schedule, and in February of 2009 I started work as a kitchen assistant in a nearby elementary school. It’s a fun job, but my once-a-month paychecks did not even begin to make up the overtime pay we had lost.  We got a large tax refund in March, which I put away, but by July it was all gone, used again to cover our monthly expenses. We dipped into our overdraft accounts and ran them up to their limits, then broke out the credit cards in August. Even without shopping sprees, or fancy vacations, they were up to their (high) limits by the end of the year after covering emergency medical expenses, car repairs, and some home repairs. I personally began to be afraid that we would run out of food, and looking back I realize I spent an awful lot on food. Our pantry was always filled to overflowing as was a storage shelf out in the garage. But eventually, I had to dig into that as well as I had less and less per week to spend on groceries as we struggled to cover our mounting payments.

In early October we decided to sell one of our cars, the hybrid. It had low mileage, was in great condition and its value was way over what we owed. We had all of two serious lookers, and both of them offered far less than it was worth. We decided to keep it when we saw how much our gasoline bill spiked when we were driving our other car, a VW Passat wagon. With the hybrid, we only needed to fill the tank once a month, with the Passat it was once a week. We didn’t want to get rid of the VW though as it was the only car that could fit all of us (as well as our dogs) if we ever wanted or needed to go somewhere as a family.

In early December, we tried to refinance our house to lower our payment. No cash-out was requested, just a lower payment. After shelling out for the appraisal (based on the bank’s conditional pre-approval), running paperwork back and forth, we were denied final approval because our debt-to-income ratio was too high and because we had no cash to bring to the closing.

Thankfully I had already purchased everything for Christmas, but otherwise, by mid-December, we had hit rock-bottom. It was a come-to-Jesus time for us and our debt.

26 thoughts on “Back to the Future: Part III: The Ugly

  1. What a difference ten years made! I don’t think I ever read back this far. You two are scrappers (and that is a positive thing in my family).
    Absolutely love having the older posts to keep the newer posts even more realistic!

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    1. It was interesting (to say the least) going back and rereading from the start, to see where our heads were and what we were up against. There are a zillion posts though, so it’s going to be a bit of a chore going through them all to find relevant ones to re-post, at least ones that move the story along.

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  2. And now look where you are! I would definitely be interested in some more posts on how you got rid of the debt. Obviously cut your grocery spending?

    I just read a tweet which said we are all closer to needing a food bank than we are to owning a million quid. To all those holding onto the dream that they are going to strike it rich, who vote for the parties who want to cut aid to so-called bludgers, etc A few bad choices and some bad luck with health or a work downturn, we can all end up in dire straights.

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    1. Finding ourselves in that much debt was a very scary time. We were fortunate that because of Brett’s military retirement we would not lose our home (it covered our mortgage and insurance), but otherwise we were on very shaky ground. I never want to be there again. And our descent into scary times happened very quickly, and we thought we were prepared with savings, back-ups, etc.. We were not overextended when Brett’s hours were cut (our debt and mortgage didn’t exceed 30% of our income), and we lived a pretty low-key middle-class life. But, we turned into the frog in the pot with the heat turned on underneath, and we were almost cooked before we knew it.

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  3. Wow…I am definitely interested in reading more. I had no idea this was the genesis of your blogging. Quite a journey in 10 years! 👏

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    1. There will be more, but frankly much of it was a slow, plodding drudge of a journey – I will be picking reposts carefully so I hopefully don’t put anyone to sleep. Our big secret is that no matter how bad things got (and they did get bad) we just kept going – our eyes stayed on the prize.

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  4. I would love to read more of your earlier blogs, specifically this one. You’ve come so far! How did you do it? And with three children too! (I’m assuming your son was no longer living with you).

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    1. Reading Dave Ramsey’s book about getting out of debt made it sound easy – seriously. Sort of, “just follow these steps, stay intense, and before you know it, you’re debt free.” Nope, stuff happens, and the path you started out on is suddenly full of twists and turns, steep cliffs, giant boulders in the path, a wolf or bear or two, etc. Especially if you have kids. Thankfully our girls got on board with us pretty quickly – they were a huge help (there’ll be a repost about that fairly soon).

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  5. I would love to read more of your earlier blog posts. Great that you got out of that debt. It isn’t easy.

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    1. There will be more reposts coming – I’m going to try for one a week. It wasn’t easy. Lots of the blog isn’t worth reposting, but I’m going to try and pick posts that show both the struggles we faced and the progress we made, slowly but surely.

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  6. Wow! I am pretty sure in 2009 I had not started reading your blog but in 1994 I had a similar “come to Jesus” mind awakening. In our case it was me, although I was the higher earning spouse—I was also the biggest spender! In fact some of the same mindset was at play, no real food budget just get what was appealing! Also mindless recreational shopping with out young sons was my Saturday thing to destress! Of course we know it all ultimately adds up…I knew we were one paycheck from trouble. So after much soul searching I went to Consumer Credit Counseling. I attended the eye opening budget workshop & got on the plan. The debt was just under $50,000! My DH supported my decisions but felt it was my thing as it was my problem & he was right!! It was all paid off in just under 5 years & during that time we moved across multiple states, sold a house & bought a house—our credit was excellent. Then we sold again & bought the current home in the current locale in 2003. I insisted on a 15 year mortgage.

    Then fast forward to 2013 when I knew I needed to truly view retiring that I found your blog and the MrMoneyMustache blog.

    As a result we paid our house off earlier on our 15 year mortgage. My DH retired earlier as I had done. We go thru periods of spend & no spend but always have the means to pay with no interest. We have 2 hybrid cars. We shop Aldi 95% and Costco the remainder. Our meals are healthy & simple. We just had a long holiday abroad and paid for as we went & before. And we sleep well at night. Our example has been beneficial to one son & to the other “we know nothing” ahhhhh….guess we all are different & have to come to our reality in our own time—-

    Thx again —looking forward to more look backs from prior blogs of yours.

    It is better —just better and does require focus. Your blog helped me & still does—so keep writing as your readers like the sound of your voice too!!

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    1. You learn a lot about yourself when you’re climbing out of debt, about both your strengths and weaknesses. What’s exciting about your story is what also happened with us – what we were able to dream about AND accomplish once we no longer had debt hanging around our neck. I still have a student loan and will be paying that for years more – that’s something I would never do again if I had to do it all over again – and it has been a huge motivating force for us making sure our children graduate without debt, or as little as possible. We are fortunate that we can afford my loan payments, but it’s definitely money I wish we could count as net income (it’s paid automatically so we never see it).

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  7. 2009 to 2011 were HORRIBLE years for me, so I understand.My income was cut 39 percent in 2009 and I eventually lost that job. I got another one very close to my original pay five months later but I had to move several hours away, could not sell my house up near first job because job market there tanked and has never recovered, and I couldn’t pay for where I had to live for new job and mortgage for house near old job. So, yeah, I totally get what you were saying. I would like to read more. I have never recovered completely from The Great Recession. I only started reading when you lived in Hawaii.

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    1. 2010 was our Horrible Year (and I have a re-post coming about that; in fact, it’s the post from I’m Losing It Here that I remember most clearly. Brett actually got a promotion and raise early that year, but because things had gotten so bad by the end of 2009, we didn’t feel the benefits of that as much as we could have otherwise. It was shocking how quickly things can spin out of control when you loose 39%-40% of your income, which is about the same drop in Brett’s income. I don’t think we ever completely recovered either but what we did do was change – we look at things completely differently now from how we did back then and it has made a huge difference. The biggest thing that saved us or made a difference was the decision Brett and I made together in the late 1980s for him to stay in the navy and retire. We are fortunate and we know it.

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    1. There will be more! You will meet the Brett and Laura that was before you met us! It’s actually very interesting for me to go through the old blogs as well so I’m excited about the interest people are showing.

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    1. Mostly it was a long, dreary slog on a very uneven path, but we kept our eyes on the prize at the end. I’m going to try to repost something from the old blogs once a week or so, so stay tuned!

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  8. Another wow here! Reading your current blog, nobody would have any idea you were in so much debt 10 years ago. I’ll be very interested in reading how you got out of that much debt. My daughter told me the other day that she was just always going to be in debt. It’s hard for me to wrap my head around her debt (about $80k of student debt plus additional consumer debt) especially since I’m so debt averse. But we don’t talk about finances–she gets upset if I offer suggestions. Anyway, looking forward to reading more of the good, the bad and the ugly.

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    1. More posts will be coming, hopefully about one a week! In retrospect, the Good, the Bad and the Ugly was a very good metaphor for the process of paying off our debt. Lots of ups and downs, but we never gave up and eventually got there.

      Re student debt: What a racket! I have been paying on my loan for nearly 18 years now, and the balance is now below what I had to borrow to get through graduate school. And I have another 15 years to go! Borrowing money for school is not something I would do again, nor recommend, but what are people supposed to do these days? Who can afford college otherwise? I locked into some extremely low interest rates years ago (less than 3%) but it is still a slog – they want their pound of flesh. I was determined that our daughters would graduate without debt, or as little as possible (my debt meant that our son accrued very little). We are fortunate that we can afford my loan payment each month, but it’s money I wish I had available for other things.

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  9. 2009 was the year i built my house. I lived in a 1979 trailer and in 2008 my dog fell thru the floor. I hadn’t had a mortgage in years but could not afford to build a house as they cost around $400,000 prior to the recession and I had lost my job in 1997 and ended up taking a 50% pay cut in order to stay in the Florida Retirement System (smartest thing I ever did). Out of those last 12 1/2 years working for the state there were 6 years where we received no pay increases and I never broke the $30,000 a year income even with promotions. I was only able to build my house because builders were desperate and my parents financed the mortgage with their entire savings. I also retired and went to work for a private company which gave me an instant $5000 a year raise while also drawing my retirement. My parents benefited because the interest I paid them was much greater than the bank was offering. If not for my pension, the recession and my parents, I would never have bee able to build my house. We all learn from our parents failures and successes. Thank God for my parents, I wouldn’t be where I am without them. I bet your children say the same thing.

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    1. That’s a wonderful story, Vivian! Like you, Brett’s staying with the military to collect retirement was the smartest thing we did (each enlistment was always a joint decision because it affects the whole family) – his retirement pay meant we have always been able to keep a roof over our heads even in the worst of times (it now pays for our lodging while travel). He never made much in then navy but did better once he retired, and those incomes made it possible for us to adopt our girls.

      My hope is that the girls will someday live in a world where their children can go to college for free, or at a very low cost, and will be able to help them financially when it’s needed.

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  10. Back to the future in the best way! It’s like reading a cliff hanger of a book but accidentally knowing the ending and knowing that everything turns out great. What an inspirational message.

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    1. I hope people enjoy the posts going forward. I read through the 2010 posts this week – my goodness, what a year! How we survived and didn’t give up after that year is frankly amazing. Stay tuned!

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  11. I’ve been reading for a long time & totally remember these phases. Honestly, it’s a crazy amount of change from where you are now. You’ve made such amazing progress. I think of our progress similarly. We didn’t have a large amount of debt, but certainly could have gone down that path had we not taken steps to address our mindset, spending, & budget.

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    1. It has been fascinating for me to go through those old posts. Some of what happened and how we worked through it I remember, but some stuff I don’t and I keep asking myself, “How did we ever get through this?” The difference between now and then is remarkable though as is what we’ve been able to do and accomplish. Different mindset, different outcome.

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