Like many Americans, our financial philosophy hinges on maintaining cash flow. As long as my my wife and my incomes continue to flow, Iwe can make all our payments and even lower our overall debt. Slightly.
Some of that debt is wise- mortgage, reasonably priced cars- and some is less wise. While I haven't used my credit cards for several years, I believe I'm paying down on one for a trip to Disneyworld in the late 90's. I also have two children going to college next year without the savings accounts I would have liked them to have. Tack on cable, Internet, cellphones and a Friday night craving for pizza and our household operates closer to the limit than we would like to.
If a person looked at my situation and told me I deserve the mess I've created, I would pretty much agree with them. None of these debts were the result of a job loss or illness or other trouble. I have a responsibility to pay my obligations.
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Then we hit a bump in the road. Well, not really a bump. The road just kinda stopped.
My wife is terminally ill. Not long term, we'll-fight-this-all-the-way kind of terminal illness, either. This was the enjoy-winter-because-you-won't-see-spring kind of pronouncement.
Every plan we talked about, every dream we had, every goal we set for ourselves and our children all ceased to matter in one short doctor's visit. In a few months I will say goodbye to someone I've been with more than half of my life. Emotionally devastated is a real understatement.
But, right at the time when I'm at my weakest, I need to make some really, really smart financial decisions. Immediately, we went from solvent to near-bankruptcy. Our income fell and will continue to fall when my wife's sick time runs out. We have excellent health coverage but it is currently through my wife's job so I need to pick up coverage for my children and I through my employer, which will give me another monthly expense. While so far all our medical bills have been paid, we sometimes have to resubmit things and that adds to my worry and stress, until the bill is approved.
As our cash flow gets worse, I will have to make decisions which bills to pay. I will pay the mortgage and the car payment because I need both my house and my car, and I can cut my expenses by giving up cable, Internet and even the cellphones. At some point, however, I will have to play some games with my credit card payments.
At that point, my credit card rates will rise and I'll get hit with penalties, late fees and the like, and there won't be anything I can do about it.
If our health coverage holds up, the original debt will be because of choices. The damage will be from circumstances.
The cheapest thing for me to do would be to stiff the card companies and deal with a collection agency for pennies on the dollar, but I was raised to pay my debts. I want to pay my debts. What I don't want is to get pounded for doing the very best I can, especially when my whole world is crumbling around me anyway.
I didn't write this for sympathy or condolences. I wrote it to share one story of how legit debts can overwhelm someone because of circumstances that should be considered.