Drowning in Debt?

If you are drowning in a sea of debt and try as you may, you just can't seem to stay afloat, you are not alone!

I've had firsthand experience in this when my husband and I moved back to Wisconsin to be with family and purchased a country bar & grill called Ustabee's. Prior, we lived in San Diego and worked as loan officers, but the mortgage business was drying up as it was 2006, and we were on the cusp of the 2008 housing bubble crisis. We came back with a good amount of savings, a couple of rental properties, and lots of zero-balance credit cards because we had such good credit. We purchased a beautiful country home with a horse barn, pond, and 11 acres. In our country living excitement, we took in this amazingly gentle blind horse Bella and a companion horse, Cricket. We then adopted some cats, a second dog, three goats, a flock of chickens, and one pot-bellied pig named Lucy. I am shaking my head as I type because I am mentally adding up the cost to care for all these animals and want to scream to my past self, "Iceberg straight ahead!"

Well, it turns out that the restaurant business, or should I say, lack of business, was a financial nightmare. Big shocker! My husband and I would work 12-hour days, 6 days a week, alternating cooking and bartending. Business was unpredictable, and to be honest, the bar just wasn't our scene. Serving 75-cent tappers to a group of four until bar close (2p.m.) was horrible. We just wanted to work together in a business of our own and unfortunately took the first opportunity that came along. Most nights, the waitresses took home more money than us. My sister, who waitressed felt so bad she worked for no wage, just food and tip money.

We weren't used to not being able to pay our bills, so we relied on our credit lines to stay afloat, hoping things would get better and that business would pick up. Our tenant moved out of the commercial cafe rental building, so we ran that business as well. I also rented a salon chair and did hair on the side, but it still wasn't enough. Once the credit lines were maxed out, my dad helped us out financially, but that only covered us for a month. What about the following month? The credit card and mortgage companies started to call, I couldn't afford propane to heat our house, much less the house itself.

Here is the printout of my spreadsheet I made more than 18 years ago. We were well over $850,000 in debt.

MY DEBT BREAKDOWN

Recognize the problem.

Most of the time, admitting the fact that something is wrong is the hardest but the first step to fixing the problem at hand. I remember the day and more specifically, the feeling I got when my husband said to me, "This is enough, we are going to call a lawyer and declare bankruptcy." There was a great release of stress that flooded my body. It was a very large humble pill to swallow, but it was time to throw in the towel. We now had a plan to get out of this hell.

I will write more about this situation and time in my life in later blog posts. Right now, I want to turn this subject more on you and your situation.

Reflecting honestly on how you ended up in this situation is crucial. Without acknowledging the cause, you can't resolve it. Here are a few examples.

• A family member or friend in need, prompting you to borrow money you don't possess to assist them?

• A new wardrobe because that's easier than trying to lose the weight?

• Is there a divorce in your future, and you stop communicating with your spouse about finances?

• Has there been a loss or change in job, and you haven't gotten used to the spending restraint yet?

• Do you hate certain parts of your life, such as your job, health, financial situation, or relationships, and find yourself spending your monthly income on an unaffordable hobby or bad habit to cope with it?

Addressing your debt begins with acknowledging the reasons behind it. The next step involves taking action to break the spending habit. This might mean temporarily reducing expenses like subscriptions or dining out, but chances are it's much deeper, like a difficult conversation with a loved one or with the person in the mirror.

I also want to note that being in debt does not make you a bad person. I maxed out all my credit lines to ensure all my local vendors were paid in full. I had good intentions, but I was also ignoring the bigger picture, which in my case is my personal expenses far exceeded what my businesses could support. Another instance is that I should have found homes for the animals or refrained from adopting them in the first place. I had good intentions to provide these animals with loving, caring homes, but the ugly truth was I simply could not afford them at that stage in my life.

So what is happening in your life that is ultimately leading to your financial demise? What are you going to do to correct it?

“We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” - Jim Rohn.