Kay is coming out.
I’m really pleased to feature Kay’s story this week. She writes at Life Style Voices, and her style is so quirky and disarming, it just makes me happy. This post marks a brave move on Kay’s part. She’s opening up about her story of debt and financial distress for the first time. I’m incredibly honoured to host Kay’s exit from the closet.
Felicitations Fellow Frugal Followers!
This post is a promise fulfilled.
Months ago I commented in one of Prudence’s posts. Her post was titled:
And it was FABULOUS, as always. In it she included a disagreement she was having with her husband “DH” about expenditures for her mother’s 90th birthday celebrations. Did the event represent “want” spending or “need” spending? You’ll have to go back and read it so that the following comments make some sense, but here they are, copied and pasted for your viewing pleasure:
Grandma celebration? I’d have to say that’s a “need”. My mom’s 87. They won’t be around forever. If they were closer to 70, maybe we could give this one to DH. As far as money goes, I haven’t shared much about Jay and my financial adventures, mostly out of fear of being driven out of the blogosphere. I may in the future, but only after I’m assured that no one has a stash of tar and feathers. We did everything wrong. Then we’d think we learned. Then we’d do everything wrong again. We seem to be on a pretty even keel right now, but we have a tendency to throw the deck of cards up in the air and have to pick them all up again. Unfortunately, 1 or 2 will end up under the couch and we don’t notice until the next time we play (all figuratively speaking, of course). Love this series, Prudence! It’s really thought provoking.
- Prudence Debtfree says:
Thank you, Kay. I actually said to DH as we were discussing the 90th birthday disagreement this morning, “Kay from Lifestyle Voices agrees with me. She says . . . ” In the end, we agreed that all expenses from Saturday (present, food for party, decorations) will come from our shared accounts, and only the brunch from today (Sunday) would come from our respective discretionary accounts. I’m happy with that compromise : )
I’m interested in what you have to say about your history with money management. My prediction is that by blogging about it, you’ll keep your awareness so high that you won’t be as likely to slip this time around. Looking forward to following your progress.
So anyway, in a subsequent email Ms. Prudence asked if I would like to guest post about our journey. I told her I wasn’t ready yet, but when I was, I would tell my story here, on her wonderful blog.
Well, here goes! (Still watching for those tar buckets and sneaky chicken feather bags.)
When I first started checking out blogs, I was looking for frugal advice. I can’t remember what the initial search was for, but I believe I was looking for extreme ways to save money. I love extreme stuff. I think it’s fun to see how far people can challenge themselves and if I can pick up even one new trick from it, I’m a happy camper indeed.
Then I got hooked on PF (personal finance) blogs. It all started with Sam’s site, frugaling.org. Loved it! He’s very socially conscious and he had great frugal tips.
Slowly I began commenting. I’d never done that before and got hooked. Then I started checking out other PF blogs, and eventually started my own, frugalvoices.com. After a few months, I decided to change the name. I felt like I really didn’t have enough to say financially, so I changed the name to lifestylevoices.com so that I could spend more time on minimalism and other lifestyle subjects, such as, eventually, vandwelling, all while still enjoying the frugal stuff.
I discovered along the way that a LOT of PF blogs were about debt reduction and wealth building. Serious stuff. Intense stuff. I was totally out of my element. And here’s why.
Jay and I have no debt. No debt whatsoever. Especially now. We recently sold our home, moved to Florida, and we’re now renting a home. We don’t have a car note, no loans, no credit cards, nope, no debt at all.
But it’s not through the intense means so many PF bloggers employ.
You see, back in ’89, we went bankrupt. Jay was in business for himself and had gotten screwed over by an unscrupulous heating company that he was subcontracting to. We ended up over $30,000 in business debt. I know that doesn’t sound like much to a lot of people, especially ones with student loan debt, but to us, it was insurmountable. We had a 4 year old, I was having health problems that were causing a lot of debt, and we were advised by an attorney that bankruptcy was our only option. We had no clue. We weren’t happy about it, but we took his advice. We gave up our home and moved into an apartment in the city. My health improved after about a year and we were back on track financially. Kind of. We were living paycheck to paycheck, but paid everything with cash for the next 7 years.
THEN, we started getting credit card solicitations.
We had been living so tightly for those 7 years, but we didn’t want to get into trouble again. However, slowly but surely, we applied for a card, and got it!
For the next 9 years, we used credit cards and made minimum payments. We didn’t know any better. We thought we’d learned from the bankruptcy, but apparently not. So in 2004, after never missing a payment, credit card companies started doubling and sometimes tripling minimum payments on cards, even though people weren’t late. We were caught up in the crunch. We had barely been able to make the minimum payments as they were. We were totally unable to make doubles and triples. Jay was once again working for himself, but the work had dried up big time. It was like the world had collectively closed its wallets and started making impossible demands. We went to the local credit counseling service (over $30,00 in debt once again) and after carefully going over our situation he recommended, yep, you guessed it, that we go bankrupt again. That was totally unexpected, but at this point we were so far behind and the companies wouldn’t work with us at all. They just wanted payments in full. There’s a joke for you. Let’s see, I can’t afford to pay you AND the other companies the minimum payments, but I’ll come up with the $7,000 I owe you by Friday.
Yeah, that’s how it went.
There is so much stigma attached to bankruptcy. No one wants to talk about it. Especially with people who are working their a$$es off trying to get out of debt. I can only say that in 2005, we went through our second bankruptcy because we just had no clue how not to. After reading these wonderful PF blogs over the past year, I can see how we could have done it differently both times. But hindsight is 20/20 for sure.
Having said that, I always want to say to people who are in WAY over their heads, that if you HAVE to go bankrupt, it isn’t as horrible as it sounds. Yes, it does take 7 – 10 years to get credit again, but the stress that is lifted off you may be worth it. I can tell you this, we will never (please God) have credit cards or loans ever again and we learned how to SAVE money and stop living paycheck to paycheck. We have paid cash for the past 10 years and we have a totally blank credit report. It looks like we’re aliens that just landed on this planet, but not only have we learned our lessons from those experiences, we’ve learned even more from the PF blogs and the brave souls who are digging their way out of extreme debt.
My only advice, if I’m even qualified to give any, is to do what you need to do. When companies or celebrities go bankrupt (think Donald Trump), no one bats an eye. But let Uncle Charlie do it, and it’s a scandal! Don’t let other people’s judgments keep you from doing what you need to do. It’s your life, and you and your family’s happiness and peace of mind are all that’s important. No one knows all of the intricacies of your situation but you. The guy in the house, cubicle, or car next to you has no say in your finances.
Unless, of course, you owe him money …
Have you ever “come out of the closet”? It’s a scary move! But no “tar and feathers” allowed here. Your comments are welcome.