Sometime circa 1987, I experienced a series of humbling events that I have never forgotten, and that helped shape my financial security going forward. I was the mother of a newborn, and if I said finances were tight, I would be grossly understating the situation. I was living in Dallas, Texas at the time, and my life was pretty much falling apart. I had been in the military, and had married and had a child all within just over a year. As I write this today, I am astonished at the amount of poor choices I made during that time – some out of necessity, some out of desperation – but ugh! Please don’t do what I did! By 1987, it was pretty clear that the shotgun wedding was not working out, and the life I’d hoped for was not going to magically happen, as I guess I thought it would. Anyway, we were in terrible financial shape, and with a new baby, it was almost impossible to afford daycare AND rent, so I ended up staying home a lot, only leaving for grocery runs and doctor visits. On one such day, with the carefully orchestrated production of getting the baby from the top floor apartment to the safety of the car seat, I ventured out. The day before, I had told my husband that the car needed gas, as I needed to use it the next day. He told me the car had plenty of gas to run my errands (you see where this is going, right?). When I got in the car, I could see that the gas gauge was perilously low, but I believed there must be enough if he told me there was, so I off we went.
The grocery store was on one of Dallas’ busy, main four-lane roads, and had a gas station in front of it. As I waited to turn left into the parking lot, the car died. I tried to re-start it, and it didn’t work. I put it into park, and people started honking at me. I somehow remembered to turn on my flashers, and started panicking. Did I have a gas can? No. Maybe I could borrow one from someone at the gas station. Cars were whizzing by and I knew I had to get to the gas station, but I also knew I couldn’t leave the baby in the car. I got out, and when I pulled my tiny son from the back seat, several people saw what was happening, and stopped to help. These heroes pushed my car across traffic, into the station, and next to one of the gas pumps. I thanked them profusely, and they left.
Next, I opened my wallet to buy some gas – I previously had $10 for the groceries I needed, and now I was going to have to buy a few dollars worth of gas – but the money was gone. I looked in all of the compartments of my wallet, and dumped my purse: nothing. I searched all over the car, checked my pockets, and started scrounging for dropped change on the floorboards: again, nothing. I had no money for gas, I’m stranded in a busy pump line, and I was not going to be able to get groceries – or gas, and I felt truly alone. At that point, I started to cry. I sat in my car, grabbed the steering wheel, hung my head, and bawled. I had no idea what to do. I felt nothing but shame, embarrassment, humiliation, failure, and defeat. This was well before cell phones, and I didn’t even have a dime to make a call. Who would I call anyway? My husband didn’t have any money (it turned out that he had taken the $10 to use for lunch), and I had our only car, plus, I didn’t know anyone in Dallas. It was probably the lowest moment of my life up to that point. Just as I was trying to figure out what to do next, there was a tap on my window. I rolled it down, and it was the gentleman and his wife who had pulled in behind me in the line. Obviously, I needed to get out of the way so they could get gas. I thought they must have been annoyed and impatient and needed me to move out of the way – now! My mind was racing, trying to figure out what to say and do. Instead, he said, “You look like you’re having a rough day.” I burst into tears again and couldn’t even speak to acknowledge or apologize, so I nodded. He told me his name, which I desperately wish I could remember, and said, “I’m buying you some gas.” I started crying even harder, and tried to blurt out something that may or may not have sounded like gratitude, but it surely was. He filled the tank, and his wife gave me a $20 dollar bill, which I declined to take, but she insisted. I asked for their address so I could pay them back, and they said no need. They had a daughter about my age, and they hoped if she was ever in trouble, that someone would help her. I thanked them and cried some more, but this time for the goodness in people. After that experience and to this day, I still fill up the car when the dial hits the halfway mark. True story. Lesson learned.
After sharing the events of that day with my then-husband, he had no reflection as to how the entire situation could have been prevented, which irritated me. When I challenged how he could have taken money from my wallet without telling me, and how he could leave the car with NO fuel in it when he knew his wife and newborn were going to be using it, there was no response. In fact, he got angry because everything had “worked out” so why was I “nagging” him about it? What happened, happened, and it’s over, end of conversation.
Fast forward a couple of years to the next financial disaster that could and should have been avoided. Still married to the same man, now with a toddler, and living in San Diego, California. Our financial situation was still precarious, but we were both working and could afford to pay for daycare, even though it cost as much as the rent on our one bedroom apartment. We were still living paycheck to paycheck, and were doing okay, but we were one disaster away from financial collapse, which, of course, happened. I had somehow been approved for a bank credit card and two gas company credit cards: Texaco and Mobil. I paid off my gas cards every single month, so I would always have access to fuel because I was now somewhat paranoid about running out of gas and being stranded (see above). I’m not really even sure what the spending limit was on my credit card, but I know the required payment was manageable, so we used the card for everything – groceries, dining, and random things we didn’t need and couldn’t really afford, but the credit card made us think we could. Each month, I made the minimum payment on the credit card, and paid the fuel cards in full. I can honestly say, I don’t think I ever even looked at the ballooning balance of the credit card, but the monthly minimum was always paid. Then we needed new tires for the car – yes, that same car that ran out of gas a couple of years earlier. We had never really made any “big” purchases on the car until then. As I recall, the tires were several hundred dollars. A few months went by and I continued paying the minimum balance on the credit card.
Then one day, I went to pay for something, and my card was declined. As I am writing this, my face is flushing in shame and embarrassment at the memory, even though this happened over 30 years ago. I was in line at the grocery store, and I was holding up the line, again, trying to figure out another way to pay. I had a little cash, and I asked the checker to start removing items from the bags. I know my face was hot and red, and I know I avoided eye-contact with everyone. I know that whatever small toy my toddler had in his hand had to be wrestled from him and given back to the employee. He began wailing. I paid in cash for what little was left, and rushed out of the store. Once more, in the safety and isolation the car, we both cried. But of course, that was only the beginning.
I called the credit card company to demand answers as to why I was declined, and to my amazement, found out that the current balance was over $20,000! That can’t be right, can it!? The worker on the other end of the phone assured me that the information was correct. Like the immature indignant that I was, I tried to argue with her, trying to keep the account open, and she was not having it. She said they had cancelled my card, and I needed to repay the balance, in full, in some arbitrary amount of time – probably 30 days. Of course, there was no way that was going to happen, and it didn’t, so the calls started. First the credit card company itself, then the collectors. They called at all hours of the day and night, at work, to my landlord, and to my employer. It was beyond awful. Within a few months, I received cancellation letters from Texaco and Mobil, informing me that I was a “poor credit risk” and they were also closing my accounts. When I tried to protest, reminding them both that I paid off their accounts every month, my pleas fell on deaf ears. How could I be a poor credit risk to them while I was paying off their cards every month? That stung, and to this day, I avoid those fuel stations unless absolutely necessary. I felt like I was being kicked when I was already down.
I just kept making the minimum payments on the bank credit card, and started paying cash for fuel again. We definitely weren’t getting ahead, but we weren’t getting farther behind, or so I thought. This was my unfortunate introduction to how interest rates work on credit cards. I have no idea what my interest rate was when I basically defaulted, but it was probably somewhere around 25%. Loansharking, I called it. I used to joke that I had to pay my loanshark, but that was only half in jest. Every month, the balance kept getting bigger and bigger, until the balance was well over $25,000. I was paying the price, literally, for my financial ineptness and poor money management skills. Even worse, my marriage, which had been hanging on by mere threads for many years, finally unraveled. In total defeat, I headed home to my mom’s house, 1500 miles away – I have no idea how I managed to pay for that.
Once back in the midwest, I set about trying to find a job and line up a daycare that I could afford. I know my mom helped a great deal during this time. She had a small rental house that she allowed me to live in for “free” – it wasn’t free for her – she paid all of the bills for a few months while I was getting back on my feet and waiting for some sort of child support to help pay for daycare and living expenses. This was also early April, and I had filed my taxes as soon as I returned to the midwest. I was able to file head of household for the first time, and I was expecting around $3000 from the IRS. This money was going to help me get back on my feet, and help me start paying some sort of rent to my mom. I also had that $25,000 of credit card debt waiting for repayment, but honestly, that was not my priority at the time. Things were sort of, kind of, maybe looking up – but not for long.
Child support never came. My now ex-husband was involved with someone else, and didn’t see child support as a priority, so he didn’t send any. At that time, in the early 1990s, it took time and money to fight such things and I had neither. He also declined to help pay for any of the credit card debt, reminding me that the card was in MY name, not his. Then the IRS sent a letter that they were taking my entire refund to pay for back taxes. Impossible! I had always filed my taxes! I called and spoke to a not-so-friendly representative who explained that the back taxes were owed under my ex-husband’s social security number. Again I protested: we weren’t even married anymore! I felt the emotions coming to the surface, and I pleaded with her. I explained my dire situation to her, but she was unmoved. She told me that the back taxes were for the years we were married. I asked why they can’t just take the taxes from him, and her response was something to the effect that they can’t find him. In desperation, I offered up his address, but to no avail. The taxes had been reclaimed, and that was that. She did, however, offer up a piece of advice that I will never forget: “You should have married better,” she said. I hung up the phone and bawled my eyes out. Again. And then I got angry.
I got angry with myself for continuing to make poor life choices and I pledged to stop doing that. I decided to get my financial house in order, although I had no idea where or how to even start fixing that mess. I decided to excise toxic people from my life forever. I found a good job, and a great daycare. For extra money, I freelanced as much as I could, and started paying rent to my mom, while continuing to make payments on the massive credit card debt. I didn’t go out, I didn’t take vacations, and I rarely ate food that someone in my family didn’t cook for us. We lived frugally, but happily. In all, it took me about five years to finally settle the credit card debt, but in that time, I learned a lot about how credit cards work and how to use them properly, if at all. I pledged to myself at the time that I would never carry a credit card balance, and I never have. I learned to use cash to make purchases, and to downsize my expectations. I learned to live below my means and within a budget. The GI Bill, tax incentives, self-pay, and Pell grants helped me to finish college and graduate school without debt. I was able to get my first job that offered a retirement benefit and a pension. I opened a Roth account when they became available, and contributed to it annually – not maxing it out, but as much as I could work into the budget. I still didn’t always make great life and financial decisions, but I knew the mechanics of how things worked, and tried to minimize damage by keeping my finances in check and my home life as stable as possible, for my son’s sake. I also witnessed firsthand the peace-of-mind and security that came with being debt free.
In 2009, another life change brought me back to the midwest, and I reconnected with my old friend, Mike. Having known each other at that time for 30 years, since we were children, ours was an easy and familiar friendship, and we had many things in common, not the least of which was our shared financial and personal hardships. We commiserated with, and critiqued each other’s actions and picked apart each other’s questionable life decisions as only your very best friend would. We offered insight and support to each other, and before long, realized that we were already a couple. We were on the same page emotionally and financially, and wanted the same things as we moved into the next phase of our lives. I married my best friend in 2013, while we were in the middle of our financial independence journey.
I write this post not to garner any pity – indeed, all of the crappy decisions I made were mine alone. Nobody coerced or forced me into any of my poor life choices – like all people making their way through this life, at times I just didn’t think things through, and it cost me time, resources, money, and heartaches. My hope is that someone can learn from my mistakes and mishaps, and get to financial independence faster than I did.
Rest assured, this story gets much better from here!
In future posts, we will continue to share our journey to financial freedom and early retirement. To be as transparent as possible, we will continue to share both the positives and negatives of our journey. Stay tuned!
We are Mike and Kristi, and we spent the last decade getting out of debt, saving money, and becoming financially independent so we could retire early and travel the globe. You can also follow our journey on Instagram at MKAlmostThere https://www.instagram.com/mkalmostthere/ and eventually on YouTube at: https://www.youtube.com/channel/UCh6VD3QdcfN_2IIHkjk7V-Q