Debt Escalation blog - BF

Debt Escalation

I Got My First Credit Card After Finishing College Debt Free.

The more I spent and paid only the minimum payment the more the bank increased my line of credit. All seemed fine for a while the minimum payments were affordable. I was becoming a little concerned about the debt escalation

but not enough to stop spending.  I was living my best life with not a worry in the world. 

My husband had his own credit cards and was living the same as I.  We both should have been worried because life was about to happen. The average American carries an average of $90,460 in personal debt per Experian’s 2019 Consumer Debt Study.  We were nowhere near this amount, but it was becoming more than we wanted to afford.

I was living my best life with not a worry in the world. 

As Life Began To Happen

In my early 20s, I got married, had a baby, divorced, remarried, had another baby, and bought a house. Too many expenses and life experiences in less than 10 years resulted in lots of debt and very little savings. It became harder and harder to make that minimum credit card payment each month and maintain our lifestyle.  Something had to give, and it was us.

So we cutback where we could by packing lunch, no dining out, participated in only inexpensive family events but it was not enough.  The raising two small children with the cost of daycare and other everyday expenses was tough. We needed to make more money because there were no more expenses to cut nor things to do without.

So after struggling for a while, my husband and I found better jobs, but we would have to relocate. We sold our first home for a small profit and bought our second home for much less than what the bank was willing to finance.  We decided we did not want to be house poor ever again. We were even able to bank a small emergency fund of $5000.00 but we were not out of the woods yet. My husband and I still had about $10,000.00 in credit card debt we needed to payoff. In addition to two car notes. We could breathe financially but we were far from being out of the woods.

Great Recession And Debt Escalation

In 2006, just before the Great Recession our home more than doubled in value. We decided to take out a home equity loan to add on a Master bedroom addition.  More debt escalation.  Then in 2007, I lost my job, but I was able to find another quickly. A few years later my husband lost his job but opted to return to school. More debt incurred as we took out student loans to finance this new career that later paid off well financially. However, student loans added an additional $18,000 to our debt load.

Debt Escalation Blog - BF

We were by far not living check to check but were sitting with in a lot of debt: credit cards, mortgage, home equity, student loans and car notes. Also, the added expense of our youngest in college.  We also paid cash for our eldest to attend college.  We were responsible enough to save for their education but at the expense of climbing out of our own debt.  As you can see it does not take long for debt to escalate that is why the total consumer debt in the U.S. is at $14.1 Trillion and climbing per Experian.

Our journey to becoming debt free was about to be realized.  It just required us to take a serious look at our budget. Read my blogs, Mind over Money, Slave to the Lender and Budget: The New Spending Plan.

Let’s budget, spend and live!

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