Posted in debt, family, finance, money, Parenting, Uncategorized

clawing out from under the mountain of debt

So i used to consider myself relatively adequate when it came to finances. but recently in light of all the hullabaloo over the student loan forgiveness, i actually decided to take a deep look at our finances and make a plan to live life comfortably yet pay off all the debt we have incurred. I will start by saying i thought i had a general idea of the amount of money we owed to various sources. After further inspection i have realized that i was a bit off in a scary way. so without procrastinating lets take a look at what we have and the plan to get out from under the mountain we have created.

mortgage 180912.20

student loans 57823.17

car 26079.54

medical 7800

credit card 6500

total 279114.91

holy smokes i havent actually seen the total amount until right now.

so whats the plan?

cry, does that count? obviously the first step in correcting a problem is admitting you have a problem,

we have a problem! a very giant scary problem.

i did a bit of research and soul searching and so by combining the 7 stages of grief along with the 7 stages of problem solving i think we have a real viable plan. im going to share this process with you.

7 stages of grief

  • stage 1. SHOCK… the utterly paralyzing realization of what that number means. im flabergasted, im speachless, I AM SHOOK to the core of my being.
  • stage 2. Denial… i admit i flew right from stage 1 to 2 pretty fast bc i was convinced that there was an error in there someplace. i looked up all the student loans bc this is where i was convinced the error was, there was no way we could be this far in the hole from a few 1500 loans, but you know what those small loans added up to 70k, ok back to stage 1…just kidding, but for real guys i had to find where the mistake was… maybe our card was scammed for fraud? nope. maybe the emergency life saving procedures that resulted in a 10k max out of pocket last year were off, weve paid more off than that right? again nope, i already knew that the vehicle and mortgage were correct bc i was physically holding the statements with their large outstanding principles glaring me in the face.
  • Stage 3: Anger… yep i was MAD, furious at my husband for taking out student loans, furious about the trip we took to hawaii (we got a massive deal on hotel, didnt eat much, and flights were from savings) so how did that add up on the credit card? im sure my husband was scared to come home, after the firestorm of texts he got. i was mad at myself for not keeping better track of finances ( we live comfortably and bills are (almost always paid, there are the times ive forgotten to pay and the lights got shut off eek, but never because of lack of funds) we travel without having to tap savings very much. BUT i should have had a better handle on what our true obligations were and the END GOAL. Here is where i really lost my temper, WE HAD NO END GOAL!!!! we had a general idea of the house we wanted and things we wanted to do but no set idea of HOW to get there?!Deep breaths deep breaths
  • Stage 4: barganing… this one didnt last too long for us. there were the thoughts that maybe we can beg the government to relieve all the student debt… but that was fleeting and completely immature. We maybe millennial but we are NOT going to fall into the entitled whiny blame game trap of many of our peers. We earned this debt, with poor choices, some necessary choices, and ignorance…moving on
  • Stage 5: Depression… this one bites, once you see the mountain ahead of you and know what its going to take to claw your way to the top, its massively depressing. i wallowed a bit here in this stage, not sure how we could make a plan, how we could cut spending, increase savings, reduce the mountain of debt.
  • Stage 6: Testing… after i put the numbers down and saw what we were facing i had to step away to cry, to mourn the innocence and cluelessness of financial ignorance. oh those were the days. anyways once i decided to face it, i tried to imagine how things would be when/if we got out from under this, or living with it.
  • Stage 7: Acceptance… so here we are landed in the final stage of grief, while i am by no means happy happy i also am not wallowing in self pity, or playing the blame game. I accept that this was something my husband and i did together (mostly some were from before, but we are responsible) I accept that there is a solution and now we need to find it.

7 steps to problem solving

  • identify the issues, admit you have a problem
  1. issue 1: large amount of debt
  2. issue 2: no plan
  3. issue 3: excess frivolous spending
  4. issue 4: actual expenses we cannot cut
  • understand everyone’s interests
  1. my own interest is getting rid of this elephant on our backs
  2. my husbands interest is making sure the kids have a comfortable life, and good education
  3. loan services: obviously they want their money back
  • list possible solutions
  1. ask for forgiveness
  2. not pay
  3. pay on schedule
  4. pay more on all
  5. avalanche
  6. snowball
  • evaluate the solutions
  1. asking for forgiveness: while a tempting option falls short of my morals. by shifting the blame off of us and claiming we were uninformed or that its a burden, only reinforces everyone’s idea of millennial’s being entitled, lazy, and seeking to shift blame. it reinforces the claims of the baby boomers who were against “everyone gets a trophy” that those who didnt earn something are somehow entitled to it. well I for one am NOT this millennial. choices have consequences, good or bad and im not going to sacrifice integrity for the easy way out.
  2. this brings us to the next option, not paying, which sort of falls inline with number one, except im not even asking im just going to fail to meet my obligations, and risk garnishments, yea doesnt seem much better, lets move on
  3. pay on schedule, this is what we have been doing, and clearly its not working for us, were not getting further ahead, were stuck in this perpetual cycle of debt. whats next?
  4. pay more on all debts: finally getting to a financial AND morally viable option. I ran the numbers and with the amount of debt we have it would not make enough of a dent due to our interest rates to get us out in any kind of timely manner(if we had less debt or lower interest rates this could have been a winner, so i do not want to discount this for others who maybe in a similar yet different situation)
  5. avalanche our debt( dave ramsey), basically just paying putting extra money to the debts with the higher interest rates first thereby reducing overall interest paid, wow this looks good.
  6. snowball (dave ramsey), start by paying off lowest loan amounts first, while maintaining the minimum payments on the rest. then rolling the payments from paid off loans towards the next loan thus having a larger payment and just as a small snowball rolls down a hill as it increases speed it increases size and impact….
  • Pick a solution

can you guess which solution we chose?

that’s right were going to snowball this mess. While i understand the idea of paying off those with the highest interest first, because over the life of the loan we will pay more, after adding up the total both ways we will pay less by paying off lowest balance first.

  • document agreements

here i am publicly stating our plan of action.

  • agree on contingencies

Never again do i want to find myself in a spot so financially depressing as this. gone are the days of blissful ignorance. our contingency plan is basically two things

  1. if life continues as is we will reevaluate the snowball method versus the avalanche method after each loan is paid down (worth mentioning as i alluded to previously, the student loan amount is the total owed not on one but rather several individual loans with differing interest rates) so if we have extra and pay of quicker we may switch to the avalanche if it saves us over the long run
  2. contingency 2 is based on wage increases and moves, if we move homes we will not be increasing our standard of living by the same amount as the raise, rather we would be putting all extra money toward paying down the debts.

starting at the bottom

where else is there really to start, fun as it may not be it will teach us the discipline and accountability we need to maintain us on our journey up and beyond.

i will be updating this journey on instagram so follow at thetinypinkclover_ or on facebook thetinypinkclover


I am a work at home momma doing the best I can! Some days are pretty messy but others are so wonderfully beautiful I couldn’t ask for more! Our family has embarked on a debt reduction plan, that includes Meh meals and paying higher amounts down on our loans! recently I have become more devoted to spending time in the word of God, and can honestly say without a doubt things are improving every day! The peace and calm that settles on me when I settle in to study or tune in to the Christian station on the radio, has rubbed off on my children as well! I am not a bottomless pit of patience but since turning to God I can say that my patience and understanding of problems has grown in ways I didn’t know possible.

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