If you missed Part One, you might want to start there to get the full picture of where I’m coming from.

After a short detour, I’m back to finish the story of how I got into so much debt. When I left off, I was newly married with a toddler and spending like crazy. I wish I could say the turning point came soon after, but I was far from finished with my financial disaster.

Starting in 2004, a few huge events happened in short succession. First, my landlord called on Memorial Day to tell me he was selling our rental house out from under us. We had lived there 2 1/2 years, always paying the rent on time, and I was a blubbering mess by the time I got off the phone. We had two dogs - how would we find a place to rent in our tiny rural town without getting rid of them? I took advantage of my summer off from classes and spent every day calling realtors and classified ads. After several weeks (and a few more phone calls from the landlord asking if we were ready to move out yet), it became apparent we weren’t going to find a place. We decided to find out if we could buy a home. Oh yes, with all our debt and irresponsible spending, we thought homeownership was a smart choice.

I called a mortgage company that was more than happy to prequalify us for a loan. They were only interested in our credit history for the 36 months prior, and they conveniently left all the debt out of the equation because it was in my name and I wasn’t working. Thank goodness I was smart enough to realize we were approved for more than we could afford, so we figured out a limit for ourselves and found a house. By August 2004, we owned a home. Our families (even my dad, who is my most trusted financial advisor) thought this was a great idea. I decided to take out a private student loan to consolidate our $10,000 in credit card debt, which my dad reluctantly cosigned for, to offset the increase in housing costs. I even made a half-assed attempt at a budget, and for the first few months we were doing well.

In February 2005, my grandmother died unexpectedly on my 22nd birthday. I was months away from finishing my bachelor’s degree. I watched helplessly as my entire family fell apart, each of us turning to our own (mostly unhealthy) coping skills to make sense of what had happened. Which for me meant ramping up the shopping. In my eyes, my grandmother was a true lady, an example of what I should be someday, and I decided this was a good time to pay tribute to her. Her house was always impeccably decorated, her jewelry and clothing perfectly coordinated…. I was going to be just like that. Unfortunately I was missing the part where my husband was a retired coal miner who made excellent financial decisions and could afford that kind of lifestyle.

Two weeks after I graduated, I started classes for my master’s degree. I spent every dime of my graduation money on new shoes, purses, and clothes for grad school. I bought a new laptop even though there was nothing wrong with my old one. When I needed to record a mock therapy session for a class, I bought a $400 camcorder instead of borrowing one. All the credit cards I had paid off were once again maxed out, and I increased my federal student loan borrowing each semester to pay them down.

In 2006, I graduated with a Master of Social Work and a 4.0 GPA, still one of the proudest moments of my life. As a teenage mother, I wasn’t supposed to make it that far. I had something to prove and I felt I had succeeded. Too bad the job market didn’t agree with me. While there were quite a few jobs available in 2006 (especially compared to right now!), I lacked the experience to get them. My undergrad and grad school internships didn’t count as work experience, which was something I had relied on.

Also in 2006, new banking guidelines raised the required minimum payments on credit cards. Our monthly minimums went from about $225 to over $500. Quickly, it became apparent that we couldn’t afford to pay our bills. For the first time, I had to choose which payments to make and which to skip. After several months of ignoring the ringing phone and asking my parents for money to buy groceries, we decided to file Chapter 7. I could write a whole post about the bankruptcy, and I might sometime, but I’ll just summarize by saying it was humiliating yet necessary. We were able to keep our home and my husband’s car, but all the unsecured debt went away. It was nice to be able to answer the phone again. Unfortunately, that stupid private student loan did NOT go away, though they did raise my interest rate to 15% once the bankruptcy hit my credit report.

A week after our court date, I got a job offer 50 miles from home. I had to buy a car, and of course I paid through the nose because of the bankruptcy. 18% interest on a used car should be against the law! But it’s not, and it wasn’t, so I paid. Our income more than doubled and we rewarded ourselves by eating out, buying more stuff, and reasoning that at least we weren’t using credit cards. We didn’t save a dime. It makes me sick to look back at all that waste and how much I could have saved in the beginning. Since it was new income, we never would have missed it. Yet I was too busy spending. I also got a few more credit cards to “rebuild my credit,” which are the cards you see me paying off right now. Five years later and I am still paying for stupid mistakes.

I won’t go into the details of the demise of my marriage, but I’ll say it started around the same time as the bankruptcy. There were a lot of problems, a lot of resentments and finger-pointing, and way too much stress. I made a few feeble attempts to control our spending, but my husband thwarted me every time. He pointed out constantly that all the pre-bankruptcy debts were in MY name, not his, and that I benefited most from the spending. I have to admit, the latter part is true. Just when I started rethinking things and trying to spend less, he decided it was his turn to spend more. Money was far from the biggest problem we had, but it sure didn’t make the other stuff any easier to deal with.

In 2009, I made the decision to divorce. Because I made more money, I felt guilty about leaving my ex with more than he could handle. I let him keep the house and almost everything in it, other than the dining room table I’d purchased with my very first paycheck. I took only my personal things and my son’s when I moved into my current home. I also took most of the debt. I made the very personal choice not to ask for child support, provided he keeps our son on his health insurance, because I knew I would spend way too much energy trying to collect money he wouldn’t have. Or loaning him money when his child support payments prevented him from paying his electric bill. A lot of people have expressed disagreement with this, but I try to be realistic. I don’t want to depend on something I know I’ll never get. I want to do this on my own.

So that brings us pretty much to my present-day financial struggles, which I’ll begin explaining in more detail now that the long backstory is out of the way. I promise I’m not always this long-winded. Most of the time, yes, but I’ll make an effort from now on.