February 25, 2018

How To Get Out of Debt and Start Over: Part One

Getting into debt is not all that difficult. Getting out takes substantially more effort. For the next two posts, I have asked fellow bloggers, Barbara and Laura, to share their stories: how they managed to get their finances under control to achieve life goals. Each story is longer than a normal post from me, but their stories are too important to shorten.

Barbara's story is first. Her world was upended by the unexpected death of her husband. Her story is a powerful cautionary tale of knowing enough about financial affairs to protect oneself if need be, and how to put the pieces back together. 

1) You went through the traumatic loss of your husband at an early age. In addition to the emotional pain you endured, what did this do to your plan for the rest of our life? What was the initial financial impact?

It impacted my life in huge ways, both emotionally and financially, and that of my still dependent child. Neither my husband or I were at retirement age. He was looking at at least ten more years of working in a job he loved after changing careers. The thought of retirement and the financial planning involved were simply not part of our horizon yet.

Had we been in retirement or much closer, I'm assuming we would have had some kind of financial planner and I of course, would have followed his or her advise. I was in a position where funds had to be transferred and designated immediately, and I was completely unqualified for this thing thrust upon me.

I am a 'I won't spend more than I have and I'll make it last as long as I have", kind of budget girl, but I was never the saver.  I was used to having all the other money out of my hands and far, far away. I was unprepared for this, never mind having to decide where my child and I would live, or the myriad of other things I had to decide. I was not in a position to "wait a year" to act, and that impacted me.

As I write this, I realize how it may sound to some folks. But I was a financial airhead who had debt in the past, and my husband was a financially savvy guy who was a finance guy in his job. It worked for me. Until it didn't work for me.

In terms of other financial types of discussions, as I said, I was the budgeter and he the financial manager and rarely did the twain meet. I think this would have been fine had he died later in life when we had time for more of the money and planning discussions.

We had never discussed for example,  the specifics of what his pension would be, or any other survivor benefits. Occasionally we jokingly acknowledged that we would not have a great deal in retirement or for son's college, as we had knowingly sacrificed those funds for European experiences that were one of a kind and once in a lifetime. But as far as what the pension would be? How much money we had and how long it had to last? Where to put said money? I don't even think he had those discussions with himself or anyone else at that point.

The other impact on my finances and my emotions, of course, was that I spent a good eight months experiencing what I now know was severe depression. I remained overseas so that my son could finish school with his friends, but that meant I was mainly alone:  we lived on a military base that was closing, and people were leaving every day. My coping mechanism was to sit at the computer and eat all day, every day, and spend money all day, every day. I'd only stop to take and pick up my son at school.

2) During the early stages of your retirement you have written about how you burned through your nest egg at a rapid rate. When you realized you were about to have some serious money problems, what were your first thoughts?  

My first thought minor panic and "Oh, s*** what have I done, John would kill me". My second thought was "Thank you, thank you , thank you". The latter because I know that my husband could have made much more in the private sector, but chose to stay with the Feds knowing that it would provide some kind of pension and that I (we) would always have good affordable health care. I had a foundation. 

I was also, frankly, if not in despair, at a very low self image during that time. It never, ever occurred to me that once I got my act together, had taken care of my son, risen from my depression and faced the world, that I would not get a job. Never, ever, ever. I realize this is not exactly what you asked, but I feel strongly that it's important that whoever is a survivor and reading this, to not have the "I'll be fine, I can get a job if I need to" reaction.

 Plan your future on what is happening now, not what you think will happen later. That's my motto, one that was hard learned. I was a Federal Government employee within the GS system with wonderful credentials and recommendations. And I could not get a job as a dog catcher.

3) Describe how your lifestyle changed during this period: budgeting, what did you decide to give up and what was important to hold on to, did you have a long term plan or did things sort of evolve as you want along? Did your housing change, how you spent your time?

I did not have a long term plan. I'm not sure I have a long term plan now, and I'm not sure it's a bad thing. I tightened up as best I could. I made what some would say was the wrong decision, in that I immediately applied for my husband's social security benefits.

I realized rather quickly, although it took me time to act, that I needed to leave the house I was in.  I could not afford to pay it off and did not want to be house poor in terms of time, energy or anything else. As a woman with handicaps I would have to pay to have pretty much everything done for me.

I had spent much of my time traveling and much of my time attempting to start two low cost startup business. I left both behind. I sat down and decided how I wanted to spend my time in retirement, who I wanted to be close to. I realized I was unwilling to be stressed about money, and I wanted to spend my time how I wanted to spend my time. 

4) How long did it take for you to get the financial side of your life back on a positive path? How would you describe your life now?

It took me a few years, to say the least. It required re adjusting more than once, as well as re-evaluating.

My life now is mainly wonderful. Although I would never share a home with anyone but family, I have embraced living with my sister, though we are quite different people. When she fully retires somewhere down the road I will probably move.

I travel a couple times a year, volunteer and generally had to step back a bit from my "I don't know how I had time to work" lifestyle. In the long term, I expect to downsize again to a senior apartment or condo type of situation in Texas, or Arizona, and have begun looking at that for the long term.

In terms of the day to day, my income is sufficient to do most anything I want to do and more. I expect I pretty much live like the average middle income retiree. I have everything I want, just not all the time.

My few financial discussions with myself revolve around having no major savings for the big emergencies, deciding how best to proceed with life and finances in order to make things easiest on my kids . With my handicaps, long term care insurance is almost impossible. I still have lingering issues of undischarged debt,  mostly having to do with those early years of taking on student loans for my kids.

5) What advice would you share with retirees, or those about to leave work, who find their finances  are a problem or maybe debt is threatening their future?

Well, obviously I am the least financially savy person around and many of the choices I made (even post recovery mode) would be frowned on by most financial advisors. I discharged some unpaid debt, for example. I took social security early rather than waiting longer and having more. I chose not to have my house be an investment and to rent instead, probably for the rest of my life unless I live with offspring.

So, in general my advice is this: Get rid of anything you can hanging over your head financially. Any way you can, even if it requires using bankruptcy or negotiated debt in some extreme circumstances. If you are still working and have large investment type expenses you KNOW you will use and need consider investing more there. Taking some of that money and paying cash outright for two cars was one of the best things I did, as well as a sewing machine. 

Most importantly, sit down and figure out exactly where you are. My experience is that knowing is better than not knowing, that being surprised is the worst. Because if you know, you can (much of the time) fix it. Start your life based on what you see there. And THEN look at earning more, working more, and making drastic changes. But begin with what you have, not what you would like to have or wish you had.

And finally, realize there is no perfect retirement. Just because you dreamed about traveling around the world or an African safari and have to put that aside does not mean your life is over. Having to live in a condo or apartment does not mean life is over. Find what rewards you the most, do that, and ignore all the rest. You can have it all, but you can't have it all at once. And remember that there are many retirees who have nothing at all, or close to it, often through no fault of their own.


I deeply appreciate Barbara sharing her story so openingly and fully. She has had a tough go of it, but has come out stronger and in much better shape. Frankly, I find her inspiring and someone who I count as a friend. I urge you to read her blog, Living Richly in Retirement to learn more about her life and creative spark.

Today is my father's birthday. He would have been 94. Happy birthday, dad.


  1. Thanks Barb for sharing your story. You are a strong, courageous woman. You faced grief and financial difficulty at a relatively young age, but managed to survive and be stronger because of it. So appreciate your honesty and heartfelt sharing of this major life transition.

    1. I agree, Carole. Barbara faced a huge hurdle most of us will not, was almost consumed by it, but came out stronger and built the life she wants. It is an inspirational tale.

  2. Good post with very helpful advice. I followed Barbara's posts a few years ago and enjoyed her hints about budgeting and how she's managed in retirement. Thanks!

    1. She has written about her financial problems on her blog several times, but agreed to revisit the story here. It is a cautionary tale that helps all of us, even those who have not had to battle what Barbara did.

  3. Excellent post, Barbara. i enjoyed reading your honest take on retirement and budget planning. We are 65 and 67 and my husband works full time still as we don't and never really got on the 'retirement thing'. We were hippies and free spirits but now it comes back to haunt us in a way. I am doing everything possible to make our retirement work in our small house as neither of us want to move and we will have a mortgage probably forever, To compound this I have Multiple Myeloma and am off treatment now, but who knows what is done the road as there is the inevitable relapse. Still we try as best we can, with what we have now. Thanks Bob for posting this and Barbara for writing.

    1. First of all, my best thoughts are with you for your battle with Multiple Myeloma. Blood cancer is not an easy foe.

      Even though I marched on Washington at one point to protest the Vietnam War and was part of a sit-in at my university, I don't think I ever qualified as a full-flown hippie or free-spirit. I was too mainstream to qualify!

      Barbara's story is important to share and her directness is important. It isn't always "the other guy" who falls onto hard times.

    2. Christina, I just took a look at your blog, Tahoe Girl. It looks like one I will want to keep checking out!

    3. Christina, As long as being a left wing hippy chick, I suspect my husband and I were the proverbial grasshoppers as well. Probably because we knew that pension was there as well as the mandatory life insurance thing. Hubby was a financial genious in the office but not at home. FYI, after a couple experiences in the last month I have some blogs coming up on so called "individual abilities" and "just because you can't see my pain" type things.

  4. Really great read. I especially like your comment about there being no "perfect" retirement. Even if you can't realize your dreams, you can live a full life. That applies to people who have unexpected physical issues as well as people who have unexpected financial issues as they enter retirement.


    1. Living a full life is really under our control. "Full" is different for each of us, but no one need allow circumstances to limit all options and joy.

  5. I get what she is saying. That is a great truth, there is no "perfect" retirement. My "life bump" was divorce, and the financial mess afterwards with four small kids, and then the Great Recession "life bump".....I have a state government pension for when I retire, but it keeps going up if I keep working. I have thought about moving to a condo near the majority of my kids, when I retire, but my house is small and dirt cheap, and even a one bedroom condo would cost a whole lot more in the college town where they live. Still, it would be good because it is close to them and medical care. I guess I will just keep working until another "life bump" nudges me in a different direction. My "problem" is that I am happy with the status quo at the moment, although I know most people would be horrified of the kinda crime sketchy, no employment available, small town where I live. I have seen crime happen in the most unusual places, so my town does not faze me. My being happy with the status quo could change in an instant, as it has before, a few times in my life. I like her blog. She adjusted to her circumstances.

    1. As the school shooting a week or so ago (and all the ones before that) showed, location is no safety factor in where crime can strike. If you are happy and financially in good shape where you are, than keep on keepin' on.

      Moving closer to kids is a big step that requires a lot of planning and foresight, so if that is a possibility start early.

      I like the reference to "life bumps." That's a good way to put it.

    2. The only problem with uprooting your life and moving closer to children is that they might, and probably will, move again. Young people change jobs, marry, and constantly redefine themselves. So I think you are right to treat that move very conservatively.

    3. Moving to be closer to grown children and their family comes with two major risks that have to be considered: as you note they could move leaving you in a place that isn't home to you. Or, there is the possibility that at this stage of their life they are too busy to have a lot of time for you in their lives. Then, you risk frustration at being close but still not having much contact.

      Moving to be close to family is a decision that requires planning and serious consideration.

      Thanks, Anne.

  6. Very interesting post and I thank you for sharing it and Barbara for writing it. I've read her blog in the past and admire how upbeat she is. Could not agree more that there is "no perfect retirement." And we have all got "life bumps" that come and go. My dear mom once told me that while I was floating down the river of life peacefully, we all know there are rapids ahead, so we have to enjoy the calm waters. She was right. None of us leaves unscathed.

    As for moving near one's grown children, I have often longed to be closer to mine, but I know it's a gamble and I wouldn't dare risk it given how their lives and careers have gone so far. :)


    1. The image of the rapids we know are around some curve ahead is a good one. Enjoy the easy paddling whenever we can.


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