Getting Out of Debt: Part One

Tis’ the season for the ghost of Christmas past that comes calling in the form of credit card bills. All that shopping before Christmas means mounting debt for many families in Michiana.

There was a time when Christmas shopping lead to credit nightmares for Steve and Katrina Marks in Mishawaka.

“We just spent however much we wanted to spend, and dealt with it later. It was fun until we'd do the bills,” says Steve.

Steve is a local pastor.

He does not have a large salary, but that did not stop them from the temptation to spend.

Like so many in Michiana and nationwide, their spending was out of control. “The payments just kept coming from here and there because we had it so spread out. And then you forgot you bought something and then so the payment comes at the end of the month, oh no I forgot.”

When the bills pile up in January, many people find they cannot pay.

Add in the interest charges and you have big problems in February. “We have to deal with it. It’s not like we can take back all the gifts that we bought a month ago.”

Amanda Wellington helps folks in Michiana get through their holiday spending hangover.

She manages local Greenpath Debt Solutions offices in South Bend and Elkhart. “Greenpath councils a lot of clients who have over spent during the holiday season. So they come in and meet with a counselor and we have these new credit card bills that have just started rolling in and the realization hits that, I probably spent too much money," she says.

It is easy to do when you consider the temptations to sign up for a credit card.

The average American has nine credit cards, and they owe money to an average of four other institutions, for things like car loans or school loans.

That means the average American has a total of 13 credit obligations waiting in the mailbox each month, waiting for payment.

If this sounds familiar, Wellington says you need to get a grip on spending. “Sit down, develop a budget, look at expenditures, budget in a monthly amount for paying down debt at a faster rate if at all possible and long term, budget in a savings account,” she recommends.

When they found themselves with about a dozen credit cards, and close to $30,000.00 in debt, they knew they had to change their ways.

They started a budget and they found more help with advice from the popular financial counselor, Dave Ramsey.

It took a couple of years, but they're back on track.

And Christmas shopping does not haunt them anymore.

“Now we do a Christmas Club through our bank. Now every month, all year long, we put money in the account. In November, you get the money out and we list the names of everybody, we need to buy for that year and decide what we're going to get for them. All of our Christmas is paid for before we have Christmas,” explains Katrina Marks.

And that is a present this family enjoys all year long.

Dave Ramsey's materials come with a cost.

His books start at around $15.00, and some of the coursework can cost in to the hundreds of dollars.

Greenpath Debt Solutions will provide free budget consultations, but they do charge for ongoing debt counseling.

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