Why Are We Struggling So Much Financially For the First Time? – Lisa

“Dear Steve,

We lost over $25,000 in the sale of a home in 2004. It required us to sell stocks and empty savings to pay the difference at the sale of our home. We did this because it was the only offer we got on our home in 4 YEARS of it being on the market. Then my husband was out of work for 4 months. We have been struggling financially ever since.

We purchased our current home in 2005, with a VA loan, with no money down. Our payments for our 1,000 sq. ft. home is $1,100 a month.

We owe $17,000 on credit cards for medical and dental bills. The minimum payments are $250 per month.

Car $189 per month (small Kia Rio after our 12 year old van died).

Our joint income before taxes is $56,000 a year.

Electric: $130
Natural Gas for heat, cooking: $160
Commuting expenses (gas, parking, tolls): $200
Food (family of 5): $625
Phone and internet: $50
Water $55
Sewage: $40
Garbage removal: $25
Of course there are school-related expenses that occur, illnesses, car repairs that arise from time to time, etc.

*No cell phones, no cable or satellite TV, no gaming systems*

*All shopping for clothes and household needs done at second-hand shops*

I’m not sure the best first step to take to get some breathing room. I don’t understand why we are struggling so much financially for the first time in our lives. We have $17,000 in debt on credit cards, the majority being on a Care Credit (medical credit card) for dental expenses.

We are not behind in any of these payments, but we can barely afford to pay the minimum balance each month on our credit card debt. Actually, I don’t think we can. By keeping current on these minimum payments, we have drained our savings, saved zero towards retirement in the last 6 years, have not taken a vacation in over 7 years, do not take our children for regular dentist or medical visits, hold our breath between each pay check hoping not to get the checking over drafted again when a bill comes out. We have no flat screen tv’s, no cable or satellite television, no cell phones, no gaming systems, no fancy cars.

So what should we do? Do we just grin and bear it, keep sending the minimum payments (one card it’s $135 minimum payment a month, the other card is $115 a month)? I’m terrified of being late and accruing late fees, etc. But I’m also tired of not being able to afford dental check-ups for my children and not being able to afford traveling once a year a few states over to visit family. Our debt seems too minimal to file for bankruptcy. In fact, it’s puzzling to me why it’s so hard to make ends meet. We are both employed; we never put consumer items on credit; we do without many modern conveniences and luxuries.

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There has to be a better way to handle this situation? We’ve tried calling the companies and requesting lower interest rates (both cards are over 20%). We threatened to transfer to other cards. No one budged. Do we really have to become delinquent to get any of them to work with us? If I had the extra money to snowball, I would be doing that. What are we doing wrong? How can we get some breathing room to live again? How can we begin to start saving for emergencies and dental check-ups again?

Thank you for taking the time to read this letter.



Dear Lisa,

Well a lot of the things I would have normally written are important and priorities you have already identified as such. Good for you.

For some unfortunate reason you have become part of the working poor middle class. You make enough just to get by but no more.

Your expenses don’t seem unreasonable but before I can really make a judgment about them I would suggest that you develop a spending plan by following the instructions starting on page 81 of my book Eliminate Your Debt Like a Pro. You can download the book for free using that link. I’d like to get an actual accounting of where all the money goes each month rather than just rely on a budget.

Getting back into a position to save and invest is critical. You really need to start putting money away. Before you know it you’ll be old, broke, and sorry.

So what can we do? The obvious choices are to increase income, reduce expenses or a combination of the both. While bankruptcy seems like such a drastic solution, I don’t think it is unreasonable. By going bankrupt you would actually be able to free up some money to use for debt repayment and savings. That saved money can begin to knit you a financial safety net in case there is an unexpected need or a trip to the dentist.

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Before you make a decision about bankruptcy one way or the other I would suggest you click here to find a local bankruptcy attorney you like. Make an appointment and go in to talk to them. You don’t have to go in to file bankruptcy, just learn more about it. The appointment should be free.

Ironically I was talking with a friend just this morning about a similar situation. I was saying that when people are stuck in a rut the only way out is to make a change or an intervention. This applies to you. Without taking some action to alter the path of your situation, tomorrow will look exactly like yesterday.

If it was possible to combine the debt relief of bankruptcy with the benefit of you maybe finding a part-time job, then your life would be very different and for the better.

Please update me on your progress by

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Damon Day - Pro Debt Coach

Steve Rhode

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