Our Debt Story Part 2

Thanks for returning for the continuing saga of our stupid financial decisions, or Our Debt Story, Part 2.

Like I said we had $26000 in credit card debt but that wasn't all of our debt. We also had a mortgage and a car payment.  This is the story of how we got out of debt, the first time.

About five years ago, (right in the middle of the Great Recession!) The Husband decided to change jobs.  It was nerve wracking to say the least and really hard for this Brunette in Debt who hates change to come to terms with. However, I didn't have to work 9 to 5 at a job I was unhappy with and where I didn't feel valued so I supported him 100% in his decision.

It's that change that got us out of debt, the first time. When The Husband switched jobs, he had a 401k that we rolled over to his new job and a pension that we couldn't decide what to do with.  Finally after breaking down the numbers, we decided to cash out his pension.  It was painful in that we had to pay crazy amounts in fees and taxes, but even after that, we had enough money to pay off both of our credit cards and get out of credit card debt.

We hated that we were sacrificing our future retirement income but we didn't see any other way out. That's why we save for retirement even though we are still in debt. Because of our prior debt we are playing catch up with our retirement savings. We all know how compound interest works and we sacrificed that to eliminate our credit card debt.

That's why I could kick myself that we somehow managed to get ourselves back into credit card debt.  We don't have near the debt we had the first go round, but we still have debt.  We continue to keep two credit cards. One we manage to pay off monthly and have every month since it was paid off almost five years ago. The other we used for a trip to Hawaii about four years ago and have carried a balance on it ever since. The balance has fluctuated anywhere from maxed out to about "half full". We currently sit at half full and that's the debt I'm actively trying to eliminate.

This time around our debt came about because even though we make great salaries, we have chosen to live beyond our means.  We buy gifts for friends and family members for birthdays and Christmas, even when we don't have the ready cash.  We buy when "we want" as opposed to when "we need" or saving for things first.  We want to give our kids experiences and don't pay attention to the cost.  All of these things are stupid and we are trying to change our habits so we don't fall prey to these pitfalls again.

There is a better way than using credit; and in the last few months I have been actively pursuing different options to satisfy our wants and still get out of debt. We are getting there. S.L.O.W.L.Y.