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So this is embarrassing but I am posting here for advice, not judgement as I already have done more than enough of that on myself.
I retired April, 2017 with a paid off mortgage and over $30k in cash savings, no debt other than a car payment and a 401K account. Apparently and much to my surprise, I have no impulse control Although I have an adequate pension, I am over $15k in credit card debt I still have my 401K, my home is still paid off but I HAVE about $15K in CC debt.
This has been spent on trips, buying new furniture, and other stuff that were WANTS not needs. So the $30k cash I had is now down to $10K because I kept trying to pay off the things I was buying, not wanting to have too much debt. But, I AM STILL IN DEBT.
Currently, I am planning on going back to work part time, per diem in my field and have had some very promising interviews so I am not concerned about obtaining work, if needed I could go back to work full time but at this point I prefer to try to work PT and try to pay down the debt.
I would like feedback from fellow members of the CD forum if they have ever done such a stupid thing and if so, how they managed to get back on track?
I am SO very disappointed in myself as I had been so proud that at retirement we had no debt whatsoever and a paid off home and now not only are we $15K in debt but have spent down about $20K in savings paying off debt we accrued !
Then go on a strict budget that includes paying off the debt. Stay out of the stores. Instead join a walking/biking/hiking club, or other activity that doesn't cost any money.
We all mess up one way or the other, so please forgive yourself. It's a real waste of time beating yourself up.
So, now you know what you are facing, you've come to grips with what caused it and you are thinking of ways to correct the problem.
I've had an over $20,000 debt. Mine was caused by losing a job, being out of work for a long time, working at $7/ hour jobs (sometimes less), and trying to pay rent, car payment, buy food. Also some surgeries my insurance didn't cover entirely. I saw the debt growing and kept thinking I could "pay it off." I went like that for about 20+ years.
One day I woke up to my reality. I would never be able to pay it off. For a few years friends would say go bankrupt but I just couldn't do it, felt too guilty. The debt was mine. But I wasn't able to pay it off.
I went bankrupt a year ago. What a relief. I no longer have a credit card and don't want one. Anything I need or want waits till I can cover it with my income.
We all mess up one way or the other, so please forgive yourself. It's a real waste of time beating yourself up.
So, now you know what you are facing, you've come to grips with what caused it and you are thinking of ways to correct the problem.
I've had an over $20,000 debt. Mine was caused by losing a job, being out of work for a long time, working at $7/ hour jobs (sometimes less), and trying to pay rent, car payment, buy food. Also some surgeries my insurance didn't cover entirely. I saw the debt growing and kept thinking I could "pay it off." I went like that for about 20+ years.
One day I woke up to my reality. I would never be able to pay it off. For a few years friends would say go bankrupt but I just couldn't do it, felt too guilty. The debt was mine. But I wasn't able to pay it off.
I went bankrupt a year ago. What a relief. I no longer have a credit card and don't want one. Anything I need or want waits till I can cover it with my income.
I sleep a lot better these days.
Thanks for your response NYgal1542, in my case I CAN pay it off, particularly if I go back to work part time. If I were in a position in which there was no WAY I could pay it off that would be another matter but honestly, as I said, it was wants not needs that got me into this and I can afford to pay it off at this point.
Thank you for your very kind and non-judgemental response. I truly feel like an idiot and I know better but didn't stop myself
You know where to put those credit cards, right? Next, try some discipline...make a plan and stick to it. I get off the rails on occasion but to a lesser extent, everyone probably does, but it takes a plan to get back on top. It will likely take a few years unless you have a really good income. You might need that PT job. Don't touch the 401k. I'm not qualified to advise on this because it might not work in your case -- but your interest rate on a home equity line of credit would likely be lower than what you are paying on credit card debt. You might get a little tax deduction as well. That means borrowing against your house and if you don't have the discipline it might be the last thing you should do. A financial advisor would help figure that out.
This week I had about $2000 in unplanned expenses. I ended up with almost half that on a credit card. My plan is to pay that off in 4-5 months given what I know about my other expected expenses. I may have to adjust if something else pops up.
This has been spent on trips, buying new furniture, and other stuff that were WANTS not needs. So the $30k cash I had is now down to $10K because I kept trying to pay off the things I was buying, not wanting to have too much debt.
It sounds like you've learned your lesson very well. I'm glad to hear that you can find work and pay it off, so you've done well in that regard, so don't feel too bad about it.
Look on the bright side, you figured out the problem and the solution. I assume the lesson learned means your will be ok for the rest of your retirement.
I think I would keep working until the CC is paid and the 30,000 is back in the bank. You may find you enjoy the part time work and end up doing it for fund. I know a few retirees in their 70's that work part time because they enjoy it.
Might be time to track every last cent in and out. That's how you get eating on track (for weight loss), by keeping a food journal. You never really realize just how bad the problem is until you track Everything. But, once you know, you can figure out how to fix the issue.
In your case, you know you went shopping happy ~ but is that ALL of it? Do you know how to budget? Have you ever stuck to a rigorous budget for more than a year? Might be time to try again (or start). Get that debt paid off, learn Exactly what it costs to live and anything you want to buy past that, write it down and wait 30 days. If you still want it 30 days later, figure out how you can afford it.
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Although I have an adequate pension, I am over $15k in credit card debt
I still have my 401K, my home is still paid off but I HAVE about $15K in CC debt.
I'm glad to hear that you can find work and pay it off, so you've done well in that regard, so don't feel too bad about it.
