How We Got Out Of Debt- Part Two
|March 1, 2012||Posted by Ashley under How We Became Debt Free|
The first thing we had to figure out was how we were going to pay the hospital bill. When I became pregnant I was working as a temp at a major financial institution, so I was uninsured. A birth in the hospital I was planning to use costs around $10,000, plus the prenatal fees and delivery fees which were around $5000.
We immediately got serious about saving and made some real progress. In four months we had saved up $3500. Then, a miracle happened. I was offered a permanent position where I was temping and was given full insurance that included my pregnancy. We were in the clear!
That was a huge relief! We had already put the $3500 towards our prenatal bill, and we would not get that money back until after the delivery when the doctor’s office was paid by our insurance. But we immediately committed to using that money to pay down our credit card debt.
In the meantime, we continued to save as much money as possible to continue paying down our credit card debt. The goal was to have it paid off by the time the baby arrived.
November 2002 rolled around and I delivered our first son, quit my job, and we paid off the credit card. We swore up and down we would never use a credit card again.
We still had two car payments, and my husband’s school loans which were around $15,000.
My car was a 2000 VW beetle. I loved that car dearly, but we started thinking about selling it. It was hard to get the carseat in the back, and since I was staying home, I didn’t NEED a vehicle. The car payments were killing us, so we went ahead and sold it. That was one of the best financial decisions we made.
We still had my husband’s 2000 Jetta. If we were smarter, we would have gone ahead and sold that car too and bought a much cheaper car with cash. We weren’t that smart. We still owed about $12,000.
At the time that I quit my job, my husband was making $28,000 per year, we had a lot of debt to pay off with little extra cash. It was time to sink or swim.
To be continued….