Travis Pizel from Enemy of Debt tells us how he and his wife accumulated $109,000 of credit card debt through lack of communication and how they paid off the debt and strengthened their relationship in the process.
HOW does a couple accumulate that much debt? Buying Faberge Eggs, eating panda steaks marinated in unicorn tears? The answer is pretty mundane. Never budgeting, never tracking spending, vacations, dinners out, and perhaps the biggest problem, never discussing money.
Travis and his wife both had good jobs and always figured the next pay raise would put them in a position of eventually having enough money that they couldn’t possibly spend it all. But that never happened and eventually Travis began to insulate his wife from how bad it had become. Opening the bills after everyone had gone to bed, shifting balances to newly opened cards, asking for limit increases on existing cards.
A credit card is not an emergency fund.Tweet This
The watershed moment came when Travis got five identical letters from a company that he had five different cards with. The minimum payment amount was going to be raised from 1% to 2.5% and there was no way he could meet that. Together Travis and his wife contacted this debt management company and were put on a plan.
The couple sent a monthly payment to the management company who had negotiated lower interest rates with each credit card company. The monthly payment, including the company’s fee was $2489. As part of the agreement the family had to close each credit card account and not open any more. Over 55 months, the entire debt was completely paid off. The total fee paid to the company was about $2700 but it saved Travis $50,000 in interest.
The debt was being paid but Travis and his wife had to fix the underlying problem that caused the situation. They now meet twice a week to discuss what needs to be done that week and how they did. It also required a lot of sacrifice. No more fancy dinners out, no more vacations, a meal plan so they weren’t just throwing things into the grocery buggy.
Now that the debt has been paid and the family is communicating openly, they have never been happier. Travis and his family realize that if they could make it through this, they can make it through anything. And Travis found a great source of side income. He is now a freelance writer in addition to his regular job as a software engineer.
UPDATE: This is Matt! I mentioned on the show that my brother used a debt consolidation company — that is not true. He corrected me and instead he used a credit score fixing company to improve his credit score. Here’s the link if you’re interested.
My Personal Finance Journey: One of the blogs Travis writes for.