I should start from the beginning. When we were both in first year university we, like many students, were offered a credit card. A really pretty one with a picture of our campus on it. It was great, personalized just for us, sign us up! And so it began…
I wanted to go to university, actually it wasn’t an option, I was going to university, I just didn’t have any money to pay for it. I grew up in a single parent household and although my mom had a great healthcare profession she either didn’t think about it or didn’t have the money to regularly contribute to RESP’s for my sister and I. When the time came for post secondary every single penny went on some form of credit, be it line of credit, student loan or credit cards. I had a part time job but not enough to pay for anything more than my books (which, lets be honest is a huge chunk of money in itself). By the end of my undergraduate degree I managed to rack up $32,000 in student debt and probably $2,000 in consumer/credit card debt. By the age of 21, I had $34,000 debt.
What’s even worse is that, although no education is wasted, my degree wasn’t going to get me much beyond a minimum wage job, the only option I had was to further my education. Back to school I went and although I have a great career now, and zero regret, by the end of my second degree I managed to add another $20,000 in student loans, another $10,000 in lines of credit and about $13,000 on…credit cards…Yup. I put over $10,000 on credit cards to pay off tuition and books that my loans/LOC’s wouldn’t cover. My program was over $13,000/year, not including books and other incidentals and maintaining a part time job while in this program was not optional. I couldn’t do both and focusing on my overpriced education was priority. I should mention that as of a few years ago you’re no longer allowed to pay for your tuition with credit cards at this particular university. Too late for me. By the end of my second degree, before my life had started, I now had $77,000 in debt.
His story is a lot less scary. Hubby went to university, then college, racking up a total of about $10,000 total in line of credit and student loan debt. He had a credit card maxed at $2,000, not a huge deal. Then he went and married me and my $77,000 deficit bank account, he must really love me!
To top off my $13,000 in ‘school credit card’ debt, his $2,000 credit card, together we also owe another approximate $5,000 in various credit that we can’t really account for, overspending if you will. We have a vehicle loan together, outstanding at approximately $29,000 and a mortgage currently outstanding at about $233,000. We both have good careers but, especially now that we have a baby (and I’m on maternity leave) extra funds for additional payments beyond the minimum for credit cards is near impossible. We have applied for consolidation loans twice for the credit cards and were denied twice because, surprise, surprise our debt ratio is too high.
After years of making minimum only payments, getting no where and being denied the consolidation loans, we investigated credit counselling and starting a debt management program (DMP). We’re now in the process of starting with them and paying off our unsecured debt (all credit cards and one line of credit) totaling approximately $24,000, making no additional payments it will take us 54 months to pay off and complete stage one of our debt freedom plan. Though we’d like to either finish the program sooner then tackle other debts individually or pay off other debts at the same time…still trying to figure out the best plan.
I will add that we have in the last three years paid off three credit cards ourselves that I didn’t add in the above detail and paid thousands off our lines of credit and student loans so they’re currently not sitting at their maxed limit, although still quite high.
Join us on this long journey to freedom and no longer worrying about money!