Our Financial Turnaround

This guest post from William is part of the “reader stories” feature here at Get Rich Slowly. Some reader stories contain general “how I did X” advice, and others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity, and with all sorts of incomes.

My wife and I had some major awakenings in our lives at the end of 2008. In December, for example, as we approached our 7th anniversary, she was diagnosed with Multiple Sclerosis and one of our cats was diagnosed with lymphoma. Statistically, only 30% of individuals with MS are able to work, and my wife's symptoms made it immediately clear that there was no guarantee she could work until retirement.

At the time our financial situation was pretty dire. Our money management had been a comedy of errors; neither of us was happy about our finances. We didn't fight about money, but both of us worried about it so much that it constantly had a negative impact on every facet of our lives. Factoring in the medical concerns and the possibility we could lose nearly 35% of our income at any moment, it was clear we had to make changes.

The road to nowhere
To sum up the mistakes that got us in this situation:

  • We had invested a massive amount of money into a failed business venture with some friends. We ended up supporting the company on credit cards for about 6 months before we finally pulled the plug. In hindsight, we should have stopped sooner, but the draw of working for ourselves and our perceived obligation to our friends clouded our vision and prevented us from making rational decisions about the business.
  • While we were running this business, we were essentially supporting three other adults that were living with us, two of whom were partners in the business. The five of us lived together in a leased and very drafty house that we could barely afford, with utilities that skyrocketed beyond expectations. With only minimal support from one of our other business partners, we had a tough time to say the least.
  • We were living paycheck to paycheck and our company paid us twice a month. Our employer then merged with another company that paid two weeks in arrears bi-weekly and on an alternate pay week. With a week's notice we switched to the other company's pay schedule leaving us with no paychecks for three weeks. We had to take the offered pay advances to make ends meet that month and the pay advances still did not add up to what our expected checks would have been.
  • We financed brand new computers at about 5k for at least 21% APR (it may have been worse — I'm afraid to find out…)
  • I wrecked our Toyota Camry, which we'd almost paid off. I ended up getting paid out from the insurance company about twice what it took to pay the car off. We made more money selling the car damaged than we would have if we had decided to repair it. We immediately squandered this good fortune by buying a new and more expensive car. (A decked-out 2006 Astro Black Mini Cooper — I figured J.D. would appreciate that!) Even though we made a hefty down payment, we were so excited that we were talked into almost every optional warranty their finance guy offered us, which quickly ballooned our payments.
  • We did a lot of miscellaneous stupid things with money all the time, including eating out way too much (sometimes three times a day and snacks), buying stuff we didn't need (we played too much World of Warcraft, and I'm a toy-a-holic like J.D. is a comic-a-holic), buying tons of DVDs and CDs, and not saving a penny.
  • To make matters worse, we bought a brand new house, upgraded every possible option during construction, and needed all new appliances (purchased with credit cards) since we had none of our own because we'd always been renters.

We had a great credit score and no savings. Before we knew it, we had racked up well over $40,000 in credit card debt, a $21,000 car loan, and a $180,000 mortgage. Every dime we made went towards credit card balances that were still slowly increasing. My wife and I sat down and decided we needed to fix our problems. We needed to get out of debt.

Turning things around
My wife and I came up with an aggressive plan that would require a lot of discipline. Fortunately, we both bring home a fair salary, so we thought it would be reasonable to expect that we could at least wipe out most of the credit card debt within two years.

Throughout 2009, we were hit with some major expenses, but we kept positive and, most importantly, kept hacking away at the mountain using the debt snowball method. We were able to put $10,000 towards our debt right away with tax returns, a bonus, and an extra paycheck in January. But that progress was immediately wiped out between doctor's bills for my wife and vet hospitalization bills for our sick cat.

My wife decided she was going to take advantage of the backlog at work and start working as much overtime as she could. For the rest of 2009, she worked 70-80 hour weeks, which kept us on top of the medical bills for her and the cat, and helped us make progress knocking out the debt. Since I'm salaried and couldn't help out with overtime, I decided I'd get rid of all of the crap we had accumulated with our bad finance habits that we didn't need or use. We ended up making over $2,000 off of eBay auctions and donated over $2,000 in items to charity.

I'd guess we paid $10,000 in her medical expenses and probably close to $30,000 for the cat over the course of the 2009. I'm sure some folks will find how much we spent on our cat a little nuts, but it all goes back to what you say about quality of life. We have no children and loved the cat. At the end of the day, the only reason we care about the money is to bring us happiness, and the memories we bought in the extra year we had with him were well worth the delay in meeting our goals.

In spite of everything, we're currently sitting at $10,000 in credit card debt, we both repaid our work advances, and our car is paid off. With any luck, we'll be completely debt-free except for our house in a few more months! Our company was purchased earlier this year, and of course their paydays are off from ours, resulting in a significant pay delay. I can't tell you how great it was to not have to take pay advances this time!

Pathway to the future
We have no plans to stop our progress! Last year when our company started matching 401(k) contributions, we put aside the minimum amounts to get full matches and opened an investors savings account to start saving toward an emergency fund.

When we finish saving the full amount in our emergency fund, our next goals are:

  • Invest in several index funds.
  • Start our maximum contributions to a Roth IRA.
  • Establish a 5-year CD ladder.
  • Start taking yearly vacations! We haven't had a real vacation to ourselves since our honeymoon over 9 years ago.
  • Enjoy life debt-free!

I attribute a lot of our decisions and progress to the advice from Get Rich Slowly. When we finally realized something had to be done, we were totally lost. I asked around and searched for sound financial advice from people who had been in our situation. Finding this blog was a godsend. It really helped me to wrap my head around some simple concepts that have gotten us on the path to financial freedom. (And Mint got me the rest of the way!) We went from having no idea what to do, where to start, or even what our finances looked like to building a 10-year financial plan that is well underway.

Get Rich Slowly has made a huge impact in our lives. Thanks so much for sharing it with us, and thanks to the other readers for a great community.

So although you may disagree with his spending on his cat — I love my four cats, but don't think I'd spend $30,000 to keep one alive — disagree respectfully, not rudely.

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Brian S.
Brian S.

Wow. $30,000 spent on a cat. I’m in the wrong line of work!

Adrian
Adrian

Sounds like you are truly on your way towards debt-free freedom! I appreciate your ability to cut your losses, as J.D. has mentioned before, many of us business owners and even consumers seem to keep investing money in hopeless aspirations & ideas that simply do not generate any real return, so we have to know when our time is up. I also enjoy the fact that both you and your wife are making a concerted team-effort in tackling your debt, as you both realize with mounting health issues usually comes mounting fees which can result in crippling debt, so better… Read more »

Chrid
Chrid

$30,000 on a cat is way over the top. While I understand that you love the cat (and I have one of my own), it is still just a cat, and if your financial situation was that dire then you should not have spent that much trying to nurse it back to health.

basicmoneytips
basicmoneytips

I always like to hear financial turnaround stories. If you can break out of the paycheck to paycheck mold, and build an emergency fund, it opens a lot of options.

I applaud the writer for taking a risk at a business, nothing wrong with trying something.

Jill
Jill

My mother was diagnosed with relapse remitting MS in 2003. She currently works in sales and makes 100k + a year. Some days she is so exhausted she can only make one sales call that day and has to relax. Other days she is on fire! She has been on Avonex for the last 6 years and has had minimal increase of MS lesions. Treatment and medications for MS is improving! But it is so smart to start setting aside additional funds for those treatments. Get on some great health insurance through work. They can’t deny for pre-existing conditions. Also… Read more »

Kris
Kris

Thanks for sharing your story! I’ve never been a business owner but I know I’m the kind of person who finds it hard to “give up”, even when it is the better financial decision, so I can understand that it must have been a difficult period.

Good luck and congratulations on your progress!

Bananen
Bananen

I should have studied to become a vet 😉
Always nice to hear another story of people who took destiny in their own hands and changed their lives for the better.

Crystal Groves
Crystal Groves

Congratulations to you both for buckling down and making so much progress!

(I’d totally spend a lot of money on my dog. He is family.)

Chris
Chris

William, thanks for sharing your story, and thanks for not shying away from sharing the amount you spent on your cat. You probably expect to get some less than understanding feedback for that decision. Well, just remember that when some stranger tells you what they think of your decisions, it tells you more about them than it does about you. Some people say they love their pets but their actions speak differently when they fall on hard times, so it is always refreshing to see someone follow through on the commitment that I think is implicit in caring for a… Read more »

Anthony
Anthony

First off, congratulations. This is a great accomplishment for you! Second, I wanted to add in some of my own personal comments: 1. While it may seem strange to some people, you can get pet insurance. If your pet is like a child, then perhaps insure it as such. 2. I know that you are building an emergency fund, but with your wife’s condition, I would make that my priority over the credit cards. Forget about interest rates, etc, etc. Cash is king whenever you have no income coming in. 3. You might consider a second job, unless selling stuff… Read more »

Sassy
Sassy

I appreciate hearing your and your wife’s approach to the debt and congratulate you on working so hard to get on top of it. Best wishes for her continued good health — and for your cat. Not a decision I would make, but then again, I have two kids and indeed spend a lot on them (sports and college). Good luck.

Aerin
Aerin

$30,000 sounds like a lot, but it comes in drips and drops – an operation, follow up vet visits, medication, more vet visits, a medical test that requires an overnight stay, new medication – it adds up quickly. Pets are expensive. Our cat started drooling, and it was over $1000 to fix (he needed a rotten tooth pulled). How many people take home a cute new puppy or kitten, and announce to their kids “Once the bills for this animal reach $10,000 we are going to have it put to sleep?” Do you keep track of the amounts on a… Read more »

Funyon
Funyon

I told a client the other day that the cost of doing foreign body surgery to remove the sock from his dog’s stomach would be $1500-2000. (not my favorite part of the job.) He almost giggled a bit actually and said to me his late wife had to have a lung removed last year and he had just gotten the total bill. $1.8 million!! So it sounded like a bargain. I think it is easy to forget that without insurance medicine itself is quite expensive.

Lise
Lise

William, good for you and your wife for making the turnaround!

For the people who are focusing on how much he spent on “just a cat”– everyone’s priorities and values are different. Just mentally cross that part out and substitute whatever / whoever is important enough to you that you would spend as much money as it took. That it was a cat for this author isn’t the point of the story.

Real Me At 42
Real Me At 42

Come on people. Don’t berate the writer over the cat! It’s a lot of money, sure. Maybe you would have done differently. Different values, different priorities. I would have done the same thing this person did. I am facing a similar situation with my cat. She has small cell lymphoma. My husband and I were both laid off from our jobs. The vet bills and medication are expensive but this is our cat–she is part of our family. She may have good quality of life for up to two years if the medication goes well. I hope that will happen… Read more »

brooklynchick
brooklynchick

Amazing progress! I am so impressed!

I’ve spent at least $3,000 in vet bills on each of two cats….plus they eat more than $1,000 of food each year for 13 years thus far, a little money on toys….I bet lots of cat people spend close to what you did over the lifetime of a cat. Pets help our stress and mental health, and I’m guessing you and your wife could use all the stress relief you can get!

I am really hoping your wife’s health stays as good as possible. Keep up the great work towards being debt-free!!

Maureen
Maureen

Congratulations on your success! I would caution your wife to be careful about working so many hours. I’m sure that rest is an important factor in the management of her MS. An ounce of prevention is worth a pound of cure.

Nicole
Nicole

That is amazing progress! Congratulations on turning your life around!

I also agree not to let your wife overwork herself. Like #17 says (and I’m sure the doctor has said), rest important for MS management.

It’s great that you’re saving more and learning to live with less (defining “enough”) and you’re out of that pretty terrible situation withe business friends. Many people never realize that if they spend on stuff that doesn’t really matter they may not be able to spend on what is actually important (in your case, family and health).

Shara
Shara

How old was the cat? This is really cold to say, but I measure the amount of life left in a cat against the price of treatment. I love my 20 year old cat, but she’s already lived well beyond her expected lifespan and if she got a dire diagnosis I would do what I could to make her comfortable, but there is no way I would spend $30k on her no matter how much I love her. I think $30k is excessive when you have other obligations. I don’t think of it as an absolute number, but in opportunity… Read more »

Four Pillars
Four Pillars

I would never spend $30k on a pet but the fact is that you have improved your financial situation from very bad to reasonably good in spite of the pet costs so I don’t think it’s a big deal.

If the $30k kept you in a deep hole then I think it would be a bad decision but that is not the case here.

William
William

Thanks for the feedback folks, my wife and I really appreciate anything that anyone has to say, especially any tips or advice. We have no delusions about our bad financial decisions, I recently summed up our financial situation as a train wreck when I e-mailed JD. A few responses to the questions: (1) For those wondering about the cat, he passed away quietly at home one evening last September. (Probably makes our decision seem even crazier!) Looking back on the decision to treat his illness (treating the lymphoma also required treatment of anemia and eventually diabetes and diabetic seizures after… Read more »

KT
KT

congratulations you guys! I wish you well.

Bill the Splut
Bill the Splut

“You spent $10,000 on your wife? She’s just a human! You can always remarry! Go on Craigslist, find another!”

Damn, but some of you people are cold. If someone’s child contracted cancer at, say, 8 years, would you just shrug and suggest they “try and get pregnant again”?

Get pet insurance while your pets are healthy. Become an ASPCA member, and their insurance isn’t expensive at all.

david/yourfinances101
david/yourfinances101

Great story–however I still disagree with the debt snowball theory. If you attack your debts with the highest interest rate first, you will get out of debt quicker.

But congrats on making it out!

R.L.
R.L.

I don’t have anything negative to say about the cat’s treatment costs or other things. I fell into debt through lack of education and having no impulse control but like you I got tired of it and worked my way out. I think it is admirable that you are willing to share your story and put yourself out there.

Alexis
Alexis

Thanks for sharing! Great story 🙂 I can completely sympathize about your kitty’s vet bills. A few years ago, before we had kids, we ended up spending over $10,000 on our beloved Maltese. It was as other people said — not all at once, but in little bits and pieces. She seemed lethargic, but no tests turned up anything wrong. (And we did a LOT of them!) Then she started having seizures. Then when she had seizures, they didn’t stop … so she had to be taken to the local veterinary school’s hospital, and each time she stayed a couple… Read more »

SG
SG

In December, for example, as we approached our 7th anniversary, she was diagnosed with Multiple Sclerosis and one of our cats was diagnosed with lymphoma.

I find it telling that you seem to treat your wife’s and your cat’s disease on the same level.

I’m sure some folks will find how much we spent on our cat a little nuts

Not just a little nuts. I mean, it would be questionable to spend 30,000 $ on a cat if you didn’t have any debt, but with 10,000 $ of credit card debt…

Jan
Jan

I think that you hit the nail on the head William by saying that your cat experience helps you work through your wife’s experience. Having to work through one major illness is good practice. Your wife is on a long journey. I will keep you both in my prayers- if you don’t mind.
I appreciated your story.

Joe
Joe

This is definitely an interesting situation… both the original post and the responses. I do not find it odd the writer spent $30K on a pet, that’s his choice and his money. What I do find startling at first is the that with a wife with MS, he spent three times as much on his pet’s medical condition than on his wife’s: >>”I’d guess we paid $10,000 in her medical expenses and probably close to $30,000 for the cat over the course of the 2009.” Perhaps the pet is significant to his wife, so then it goes under HER well-being… Read more »

William
William

@david/yourfinances101 I am sure you’re right, we found ourselves in JD’s boat and it was hard to keep on task without feeling progress by eliminating debt one line of credit at a time. I won’t say the debt snowball is the best method but it’s certainly was the easiest method for us psychologically. @SG I am amazed you were able to infer in some way from this article that I treat my wife’s illness and the cat’s illness in the same way. Sure, we may have spent more money on the cat, but the cat did not have the exemplary… Read more »

LisaD
LisaD

Is $30K a misprint? I spent $3K on a cat who was hit by a car and needed multiple procedures done over the next couple of months. I can’t imagine going higher than that and would probably just have provided “comfort care” until the end of the cat’s life. I lost 2 cats within 2 years awhile back and spent more on the first, but realized that you can’t fight death forever. With the second I said straight up that if it couldn’t be “cured” I only wanted to keep him comfortable. The vet respected that. If you have learned… Read more »

uncertain algorithm
uncertain algorithm

It sounds like you two have been through a lot, but kudos on the accomplishments. And you know that you can handle quite a bit, which is a major psychological advantage for you both in the future. Congrats again.

Jill
Jill

Awesome job paying down more than $50,000 in debt while you had those expensive health issues. Well done. You’ll have the rest of that debt gone in no time and be on your way to meeting your other goals. Thanks for sharing your story.

Sarah
Sarah

Good for you for seeing what needed to be done, and doing it.

I think for a lot of people it’s easy to think you’ll pay off your debt when things get “back to normal” but you were able to weather some big obstacles and continue with your goals in spite of setbacks.

Regardless of whether people agree that your spending was justified (like it’s any of their concern anyway) I think we can all agree that you are a great example of how to adjust and continue to pursue a goal in the face of the unexpected.

Monevator
Monevator

The most interesting and informative part of this story isn’t the rather eccentric lavishing of money on the cat. It’s the admission near the start of a business failure, and the difficulty it causes. The Internet – particularly the blogging community – is in denial about how hard it is to start a real business, and to make money from it, and all the complications that involving other people, let alone friends, into it can bring. I wrote a post called ‘7 reasons why you shouldn’t start a business’ that I have had more disproportionate negative comments and emails over… Read more »

Barbara
Barbara

William,

Thanks for putting your story out there! It took guts to open yourself up like that and I totally admire it. It is really motivating to see someone come out of debt (for the most part) and not lose sight of quality of life in the meantime….

Well done!

I wish you and your wife continued success and good health!

SoldierGrrrl
SoldierGrrrl

While I haven’t had to spend $30k on a pet, I do understand. We spent over $2k to give an old, beloved dog another GOOD six months of life.

We have no kids, and it was our choice and our money. Everyone who’s grousing at you for spending that money on “just a cat” should sit down, shut up and realize that not everyone has the same priorities.

sashie
sashie

While I am trying to comprehend the idea of spending 30K on extending the life of a cat for a year (and I am having a lot of difficulty with that I must admit), I think there is a larger issue here that needs to be addressed more often. Several years ago one of my friends got married in a fairly lavish ceremony. She spent about 30K on the wedding, using up all of the inheritance she had received unexpectedly. I was surprised that she decided to spend it all on a wedding but she was adamant that having that… Read more »

Sara
Sara

Hi – I’m Will’s wife. I really appreciate all the supportive comments from everyone who has posted. I’m limited on time tonight, but I do want to make a couple of clarifications. 1. The cat got sick first. We were well underway dealing with his illness when I got my diagnosis. I always thought I was paranoid about suspecting that I might develop MS but honestly I was probably just trying to talk myself out of what was obvious. 2. We have a nice home office setup (remnants from the home-business days) and I was able to log into systems… Read more »

Carol
Carol

It warms my heart to read you did everything you could for your cat, despite other pressing bills. Good for you!

And to those who say “I should have been a veterinarian”, vets and their techs do NOT make a lot of money. And they work hard, and long hours.

DreamChaser57
DreamChaser57

Engaging post, William, thanks for sharing. You referenced your financial pictures as a “comedy of errors” – what poetic and insightful language. We had to euthanize my darling cat Honey in May of 2007. His sickness came at the later end of his life; I had him eighteen years by then. I thought I was going to lose him another time, and I felt like such worthless crap after leaving an insensitive vet who basically had a “show me the money” mentality. I was a poor college student. Anyway, my mother prayed fervently for him – and he survived another… Read more »

Funkright
Funkright

Yes… I know this is callus.. but $30k on a cat? Put the cat down and save a child or family in your local neighbourhood or in Africa..

DreamChaser57
DreamChaser57

Great dialogue! The Reader Stories’ posts have so much more impact when the original story is engaged in the conversation. Sashie (Poster #38) – loved the points you raised, I think it is easy to get carried away and make financial decisions in a silo instead of a part of an integrated fiscal strategy. Enjoyed Sara’s comments as well, everyone just assumed that OT involved being at the office at all hours of the night. Assumptions are often not grounded in reality. I think what this posts demonstrates is the human beings are very resilient, and can structure their lives… Read more »

Mimi
Mimi

Dear William and Sara, I’m a pet lover, too. I had one cat pass away from lymphoma; another from sheer old age, at 21; and another is about 15 or so with some chronic medical problems. I’m so sorry to hear of the tough time your cat had with the lymphoma; it sounds as though you both were very thoughtful about what he needed, and I can tell how much you loved him, and how well you communicated with him. I totally get your choices! Thank you both for sharing so candidly your journey to date; I like how you… Read more »

Richard Depinay
Richard Depinay

Some have cats because they can not have children…

Some have children because they can’t have cats!!!

Ingrid
Ingrid

I feel really personally torn reading this. I have a cat who is approaching 13 years old and I know I will most likely start facing some tough decisions in the next 5 years. In my mind, I have actually put a tentative cap on how much I would be willing to spend: somewhere between $2,000 and $5,000, that’s it. And every time I think about it when hearing stories like this, I wonder whether I am practical and looking at the big picture – or just heartless. Because I have no consumer debt, a paid off mortgage, and no… Read more »

Kate
Kate

I am totally amazed and inspired that you were able to focus on getting your debt down so quickly and working with such intention AT THE SAME TIME as dealing with two major emotional blows. The health diagnosis of illness for two family members is enough to send a lot of people into a downward spiral of depression as is debt. And to hear that you used both situations as a motivating force is quite amazing. I really applaud the mental re-framing that must take. It’s encouraging to me as I deal with my own poor financial situation without any… Read more »

Shari
Shari

My husband shakes his head when I take my hamsters to the vet, which I occasionally have to do, but they are like my little buddies. I can’t just sit back and watch them die when they can be helped. (although I have to admit, I’ve never had more than a $10 vet bill for a hamster!)

Steve
Steve

My mother wouldn’t spend $1,000 on a cat. I think she viewed them like a VCR, if it’s cheaper to get a new one than repair the old one…

Somewhere between there and $30k is what is reasonable.

Sandra
Sandra

I had a cat who became diabetic in the last several years of her life. I probably spent $2-3,000 between (regular) vet visits, medications, special food (which the dog loved!) and an emergency vet visit. The day I had to have her put down was one of the hardest days of my life, but at that point, it was a matter of when, not if.

We then spent ~$2000 additional for renovating our powder room where the litter box had been located.

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