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NYT Article: Couple Learn the High Price of Easy Credit


John Leland of the New York Times has written another article about debt (he’s the one who interviewed me in February). This time, he visited the Moellerings from Ypsilani, Michigan.

Couple Learn the High Price of Easy Credit

Christine (40) and her husband Mark (39) currently have over $22,000 in credit card debt, a mortgage of $93,000 and a HELOC of $68,574. Together they make around $66,000/year and their debt is too much for them.

“For the Moellerings, juggling balances and interest rates has enabled them to pay for things they could not otherwise afford, like their 2004 wedding and house renovation, or to eat out occasionally, when “we’ve both had a bad day at work,” Mr. Moellering said.”

Right there is the big problem, and the one I attribute much of our debt to. We used our credit cards to get things we wouldn’t have been able to otherwise. Instead of saving up the money, we used the credit we had available.

The hard part is trying to turn the situation around and right what you did wrong. The Moellerings are paying over $380 with their credit card finance charges alone, and I can sympathize with how tough it can be to get credit card debt more manageable. For us, it took some work, but reducing our credit card finance charges from $400/month to around $100/month was a huge step.

There one thing that Ms. Moellering said that concerns me:

“It’s been almost two weeks since we’ve had time to sit down and go over the bills,” Ms. Moellering said. “You can’t do it every day because we both work full time. I’ve got two kids; they want all our attention; they haven’t seen us all day. We’re trying to cook dinner. We have to do the dishes, fold the laundry. We’re exhausted. And on the weekends the kids want our attention, and we want to spend time with them; we don’t want to spend time going through the bills.”

I completely understand how she feels with wanting to spend time with their kids and not wanting to spend time going through the bills. I usually do our finances on the weekends or late at night after my son is sleeping. Making sure I take the time to be more “in tune” to our finances has helped to avoid lates fees and overdraft charges. Even one late fee of $35 would mean that we would have $35 less to pay towards our debt.

Taming the debt beast is tough, but taking the time to get a good handle of your finances is a great step.

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  • Reply Sarah |

    Tricia–I think this is such a lesson for us all. It was an amazing article. And I went back and read your article too. Wow. The New York Times! That’s exciting!

  • Reply danielle |

    I think our credit was “easy”, too. All we had to do to get the cards we have was to send back the little forms they sent us unsolicited. Now, we have over 20K in *available* credit, but it’s all paid off. The trick is to have those on hand for a *true* emergency, and then just *realize* that it isn’t real money that you have- and don’t use it.

  • Reply MVP |

    I feel for this couple. Unfortunately, this story is a common one. The Moellerings seem to have a pretty negative attitude about attacking their family’s debt, which isn’t going to help. Until they get excited and intense, they’re going to be stuck in their situation. They need to stop using being tired and needing time with the kids as excuses and get on it! This doesn’t mean he and his wife need to sit down EACH night and look at their bills. This really only takes one time per month and a little maintenance in between. The biggest priority should be that one time per month, where he and his wife sit down together, go over a budget and agree on it. They can automate payments so they don’t have to take a lot of time out of their evenings. When they have a few extra moments, they can call the CC companies and ask for lower interest rates. This really just requires some focus. While that may temporarily require the couple to be away from their kids, eventually, they’ll all be better off if they take care of this ASAP. Also, with your new site design, I’m unable to see my entire comment as I write it, so excuse me if there are some typos.

  • Reply 3 Things About Money |

    Wow, the New York Times! I missed your interview in February, and so it was great to get
    reminded to read it. Fabulous. I really feel for them because it must have seemed like not too much
    debt at the time. I agree with the previous commenters, that consistent time with finances is what
    matters, although I would vote for once a week. But just make it part of the routine.

    BTW, I know you are renovating and I just thought I would let you know that your comment
    box isn’t word wrapping, it is weird. We’ll see how my comment looks. It must be an option
    to word wrap that you can turn on or something.

  • Reply Tricia |

    Thanks for the head’s up about the comment box. I haven’t noticed that it wasn’t word wrapping. It looks fine in Safari so I’ll have to check the other browers.

  • Reply Elizabeth |

    Tricia, When I read the article in the Times, I thought of you! I knew you would be linking to it. I am really bothered by the wife’s quote “No matter what you do, you always have that credit card debt.” I can understand kids who are away from home for the first time, at college, totally broke and getting sent these cards–it’s a time in your life when you are just beginning to have real responsibility and see what it means. It must be easy to think you’ll get a high-paying job and have more money in the future. But this couple is 40! I mean, don’t they get that they have less to spend each month because they are making those stupid interest payments? Not to mention getting assessed fees, which they admit to in the article.

    I have been watching my budget tightly since the end of February because I lost my job. But I don’t have credit card debt, and because I didn’t have debt I was able to have money invested–money that I may need in the coming months, and money that has been going up in the market. Credit card debt also costs you the interest or increased value you could make on your money.

    I’m getting more and more interested in helping people take control of their financial lives. I’m looking into personal finance courses so that I can help others, perhaps as a second career. Of course, when I meet with them in person, I’ll have to suspend the judgemental attitude that pervades my post here!

  • Reply Dasha |

    First of all- I love the new look of the site. It is still fresh and clean, but much happier!

    I have not (yet) read the article, but I have to say that finding time once a week to pay the bills and do finances is not difficult. It is just a matter of habbit. I’m sure this couple, and most others who have this complaint, could find a half an hour once a week to pay the bills and balance the checkbook.

    Its like the old joke- How many shrinks does it take to change a light bulb?

    One, but the light bulb has to want to change.

  • Reply danielle |

    I went through a phase where I wanted to help people with their finances, too.
    Then, I started realizing that a lot of people don’t want to be helped, they just want pity.

  • Reply Chris |

    This article just floored me. I think automatic payments and such would just get them into more trouble, they would continue spending on their cards and end up overdrafting their checking account several times a month.

    Their entire problem can be summarized right here I think:

    “Christine Moellering, 40, sorted through the plastic laundry basket where she keeps the family bills, statements and coupons.”

    They need to learn how to manage their finances. Danielle is absolutely right, they may just want pity and a quick fix.

So, what do you think ?