We have all heard terrible stories in the past few years about families struggling with a host of financial challenges. While this was partly due to the economic depression triggered by the subprime mortgage crisis, many families also struggled and accumulated significant debt, primarily on their credit cards. However, one family was able to recover from this vicious cycle of debt and their story is inspirational for other families going through a similar situation.
The family lives in Sparta, Wisconsin, and was able to eliminate credit card debt in excess of $38,000 by literally changing their way of life. The family lacked savings and resorted to paying for almost everything with credit cards, but today, they have stopped using plastic altogether. Tackling their debt required them to go through credit counseling and, with the help of Consumer Credit Counseling Services, consolidate all of their debts into one of their cards.
While doing this also brought down the interest rate on the amount that they owed, they still needed to make monthly payments, which, in turn, required them to cut back on their spending. The fact that they had 11 children meant that they, too, had their lives altered, with the older ones also contributing however possible. Having gone through the challenge of overcoming debt, the children are now making wiser financial decisions in their own lives.
The family’s struggle was underscored by the resolve that they would pay back what they owed and not even consider filing for bankruptcy. Through this difficult journey, they learned the importance of maintaining an emergency fund – which they restocked using tax refunds – and how seemingly minor decisions like preferring a brown bag lunch over a restaurant meal could make a difference.
Source: Nasdaq, “The Unverzagt Family’s triumph over their credit card debit“, Oct. 7, 2014