How Could I Have Been So Stupid?

[BkinTX]

When we bought our home, we spent a lot of time looking for something that was a good fit and within our means.

Our current home is 1500 sq ft, including the 2 car garage. It's in a good neighborhood and very close to an elementary school and a middle school.

It was a VA repo and just needed the carpet replaced and a good cleaning (the previous owner apparently owned like 312 cats). The smell was off-putting when we viewed the house, but we could see past the dark red carpet and cat smell and realized it was a bargain.

Our income is around 50k a year. We are a family of 6. Our home has 3 bedrooms and 2 living areas. We make it work. We are happy in our home.

We were approved for more house than we bought. We considered things like property taxes and utility expense during our house hunt.

We ended up spending 91k on a house appraised at 105k in 2008. Our payments are well within the recommended amount for our income, and under the amount allotted by my husband's military "BAH".

We also got a 6% interest rate.

And yet, we worked our way up to 40k in unsecured cc debt, with interest rates all the way up in the 30s.

I would buy items on sale and put them on the cc, proud of my great deal. How stupid could I be, not realizing that any bargain at 17 or 23% interest paid out over a decade was NOT a deal?!

I am just so glad we figured this out now, in our late 20s/early 30s and not later on. We still have a change to build wealth and plan for retirement.

I just get sick imagining where we would be if we had saved and never turned to ccs.

[WillinVT]

I know the feeling. When my wife had our first daughter back in 2006, she quit her job to stay home with the baby. At that time, I freaked because I didn't know how we were going to make it on one income. That is when the credit cards came into the picture.

As time went on, my debt began to build and build and before I knew it, it was way out of control.

We had our second child in August of 2008; still living off of my income, but after she was born, things like diapers, gas, food, ect... start going on my cards. It got to the point where I would pay a little more then the minimum and then go a head and use the cards for things I needed.

To make a long story short, I wish I knew back in 2006 what I knew now. That a family of 4 (at least in my case) can live pretty cozy on $36,000 year.

I am in the process of getting my stuff together for chapter 7 and after that, no more plastic / credit. Just cash. We know how to get by and even save and it's sad I had to learn my lesson this way, but live and learn I guess.

Best of luck to you!!!

[downsized]

Yep, it sure can sneak up on you! We had multiple cards and really had only a vague idea of what was on each. We were off by about $10,000. We lived on them while I finished up my degree several years ago when we had a family of 5 and paying full time day care on just dh's income. That brought balances up very quick but we figured once I got a good job post degree we'd be able to pay it back. That didn't happen as I was only able to find part time work. Then dh lost his job. We ended up in a BK atty's office and filed just a few days ago.

[catleg]

The popular term for this is "boiling a frog". If you turn the water up real hot, the frog jumps out. But if you turn it up real slow over time the frog stays put and gets cooked.

And we're the frogs.

[queenfluff]

I hear ya! I can't help wishing I had cut up my Citibank card when I paid the whole thing off once in 2004 but it was my only card at the time and I felt I needed one for emergencies. Not that it didn't come in handy for emergencies - I never had enough cash on hand to pay for emergencies lke the car breaking down or something. Who does?

Not saying I didn't buy stuff on credit I didn't need and just wanted and I overspent on vacations. It is so sad that it hard to live a "modern" life without the cards - the cost of everything is too high and we never get paid enough. I still worry how I am going to pay for emergencies when the whole thing is over. I don't want to end up back where I am at. It is hard to live without the cc's for "backup" esp right now when everyone is living off their cc's because of the job market. I was one of them.

I am happy to be getting rid of the debt but it really makes me sad when I look at how the world is set up. It really IS set up so you can't afford the 'good life' (or what we have been told is the good life) without the cards (unless you are a millionairre). What I see in my future is no vacations, not a lot of dinners out, no Xmas presents or B-day presents, no new clothes but most importantly no safety "backup" for emergencies. I can't even move right now if I wanted to because how would I pay for the moving truck?

I honestly would love it if I could go back in a time machine when the concept of money was first invented and throw a wrench in the whole plan. I would go back to the trade system. It is too easy today to buy things with money that "isnt' real." This is how I am going to try to look at it too. CC money isn't real.

[BkinTX]

Credit cards are like "un-money"...really.

We have established an aggressive savings plan and will be prepared for emergencies. We have also set aside money for things like vacations, birthdays, Christmas, and other savings goals.

Things will definitely have to be scaled back, but with the cc debt gone and a healthier attitude about spending, I think we are ahead of the game.