How a Modest Nanny Racked up $10,000 in Debt Later in Life
Budgeting isn’t the most exciting word, but it’s one every adult should have in their vocabulary. A good budget can safeguard you from financial struggles like debt and bankruptcy.
Considering the benefits of budgeting, how many Americans are actually keeping track of their expenses. According to a Mint survey, not enough. Their findings based on 1,500 Americans, show 65% or 3 in 5 Americans have no idea how much they spent the previous month.
When you don’t have a working budget, it’s easy to overspend on both everyday items or impulse buys. The absence of a budget contributed to Soledad’s looming credit card debt.
Soledad worked as a modest nanny for over a decade…
Soledad was a nanny for over 13 years with the same family. According to PayScale, the average nanny in the United States earns $15.26 an hour. Assuming they work 40-hour weeks, that would amount to around $29,300 a year.
While that is above the federal minimum wage and federal poverty line, without a budget the average nanny could end up overspending and in debt.
Soledad didn’t access credit cards until she was in her fifties…
She got offers in the mail and wanted to see what they were all about. Unfortunately, she had little knowledge of how credit cards worked, which was the beginning of a tumultuous financial journey for her.
Soledad explains, “I wasn’t sure how to use credit, but I tried. I went into this world of spending and paying later without enough knowledge.”
Spending money on credit cards with the intention of paying later is something many people do. Matter of fact, 53% of all active revolving credit accounts carried a balance in the 4th quarter of 2020. The trouble with spending more than you can afford on credit cards is once interest mounts, you pay back more than you spent.
Soledad came to this realization after the fact. “When you start spending money you don’t have, it adds up. You think next month I can just send them a payment, then another month comes around and all you really have is that one minimum payment.”
She wasn’t splurging, but she wasn’t budgeting either…
Some people assume that debt results from buying big-ticket items you can’t afford, but this isn’t always the case. Data from the Bureau of Labor and Statistics, shows the top three things Americans spend their money on are housing, transportation, and food, which are necessities.
This was also the case for Soledad—she was using her credit cards for everyday needs. However, her basics were costing more than she could afford.
“I had a couple of cards with $300 limits and went through them really quick. When it was time to pay up, I just couldn’t keep up. Not only do they want the money that I borrowed, they also want it with interest.”
This is a common pitfall for people who don’t understand how credit cards and interest work. With a budget in place, you’re more likely to only spend what you can afford to pay back.
Mundane social media scrolling presented a life-changing opportunity…
Soledad knew she was in debt, but she didn’t know just how bad it was until she bumped into an ad about Consolidated credit counseling services while browsing Facebook.
“They wanted to know how much money I owed. When I calculated and typed it in and it was in black and white, I realized how much trouble I was in.” She continued, “I said ‘oh my god’ I cannot do this on my own. I hope these people are for real.” Lucky for Soledad, she called just in the “nick of time”, in the words of her credit counselor.
We asked how much she owed. Her response? “$10,000. To me, that’s a big amount.”
7 years and 7 cards later, she was ready to tackle her debt…
Soledad committed to credit counseling with Consolidated Credit and immediately began to feel a sense of relief. Her credit counselors did much of the heavy lifting for her, enabling her to focus on monthly repayments.
“I felt like life will get a little bit easier, now. Because when I tried to catch up on my own, it was exhausting. I would’ve gotten myself into a bigger bind if I didn’t make that call to you guys,” says Soledad. She was right because as time passed, she found her balances becoming smaller and peace of mind becoming more tangible.
Soledad paid $10,000 in three years…
“They called me to congratulate me—she said I’m all paid off. ‘Oh my gosh,’ I thought. It worked!” It didn’t happen overnight, but she gradually began getting out of debt thanks to lower or no interest charges and consistent repayments.
Soledad expresses gratitude for how easy the entire process was. “I like the transparency and worry-free aspect. You all did all the work for me and that made choosing you easy.”
She continues, “I kept my end of the bargain, Consolidated Credit kept their end of the bargain and that was it.”
We requested a penny for her thoughts…
Soledad had many things to say about what she’s learned along her journey. Some key highlights include:
- Don’t take out credit if you don’t understand how it works
- Know how much you bring in so you can plan your spending
- If you don’t have money to buy it in cash, wait. The money in your pocket will last longer when you do
Another valuable piece of advice she gives is to reach out to professionals when you’re in over your head.
“I’ve learned that sometimes you can’t do it alone and you need expert help. Sometimes you have to call a big brother because they’ve been around the block so many times.”
Consolidated Credit can help you too, but don’t take our word for it…
Are you in debt and unsure of which direction to go in next? In case you’re apprehensive about Consolidated Credit, here is Soledad’s seal of approval
“If it weren’t for Consolidated Credit, I wouldn’t have gotten through this. Call them and they’ll meet you on the other side.”