Debt Management

Paying Off Debt (With Kids!)

My husband and I are heads of that happy family-of-four you often read about. A seven-year-old little girl, and a five-year-old little boy. We live in a modest home with a shared bedroom for the two kiddos and only one bathroom for the four of us. Both my husband and I work full-time – I just started again now that both kids are in school.

Picture-perfect from the outside, including the financial choices: modest home, used car, public schools, thrift-store shopping.

And yet, on the inside: we’re in debt. Man-oh-man (as my five-year-old would say) are we in debt.

How’d we get that way? For starters, we had two kids. My beautiful daughter will turn eight years old in November and we have yet to pay off her birth. Yes, we had insurance, but I had one of those complicated pregnancies you can’t predict. C-sections cost over $50,000, and even good insurance often only pays half of that. My son’s birth was less complicated, but I was not a good candidate for a VBAC, so we had another c-section and another round of bills.

My husband and I had been very careful, avoiding all credit-card debt and working to pay down our respective student loans. We just didn’t know. Where on the OB-GYN’s wall does it say that having a baby costs as much as buying a new car?

So we started paying things off, bit by bit. But life happened. You know the funny thing about trying to throw all your disposable money at a hospital bill is that you suddenly need a new washer but you don’t have any cash left in your checking account, so you put it on credit… you get the idea.

Right now my husband and I have a combined $57,378 still on our student loans and a frightening $82,491 in consumer and medical debt. (My daughter has some lingering health problems that result in expensive hospital treatments and prescriptions. We are all hoping the Affordable Care Act will reduce this burden.)

It’s frustrating because we’re doing everything “right” and it feels like we can’t get ahead. Every time I make a budget, something gets in the way. It’s also much harder to distinguish between wants and needs now that they’re both in school: am I really going to be the only mom who doesn’t let her kid go on the field trip? The only mom who doesn’t put the kid in Scouts and then let her go on the Scout overnight? The mom who crosses her fingers and ignores the life insurance guide, or who squeezes her five-year-old into a car seat that’s a little too small? Absolutely not.

(Also, while we’re at it: what’s up with parents having to take on the entire cost of school supplies? I’m happy to buy pencils for my kids, but their school also requires us to buy copy paper for the school office, as well as bulk cartons of toilet paper for the school bathrooms.)

This year, we’re starting to fight back. My son is still a little too young to get it, but I’ve started talking to my daughter about saving money and not buying everything you see. We’re reading Little House on the Prairie and Five Little Peppers before bed, and she’s still young enough to think that not buying Hostess cupcakes for lunchboxes is “like Laura and Mary.”

I organized a clothing exchange and a toy exchange with a group of moms, meaning it looks like we’ll be able to outfit our kids pretty well for free. I’ve started packing everyone’s lunches in one go – Mom, Dad, and kids alike each get a peanut butter sandwich, some fruit, and a little baggie of cheese and crackers. Cable is out, libraries are in, our life insurance plan from SILI stays in the picture because we couldn’t survive as a one-salary family, our “winter vacation” is going to be a staycation and both sets of grandparents can come visit us for a change.

We started this reduced living strategy in August. Total extra cash to pay towards our debts every month? Around $200. It’s now my goal to pay down our kids’ births before they leave the house – but at least we’re making progress.

 

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