I’m a walking poster child for how to not manage money and handle credit.  I’ve been irresponsible most of my adult life with money but was lucky enough to always have someone bail me out of every financial mess I got into until 2 1/2 years ago when bankruptcy was not only “knocking on my door” but had come inside to stare me in the face.

I finally grew up, took responsibility for my actions, and started making changes.  Today, even though I still have debt, I no longer use credit cards, live on a budget, and bankruptcy is no longer a looming threat (it’s not even living in my zip code).

I’ve wondered what made such a complete mess-up when it came to money.   I could be a whiny baby and blame my parents but they tried to teach me how to be frugal and fiscally responsible and they weren’t people who just talked the talk.  They took out a loan for 1 vehicle in their entire lives.  Every other one they paid for in cash.  They have never paid a single penny in interest on a credit card and never once as a kid did I have to wonder where my next meal was coming from.  If there were times when money was tight in our house I never knew it.  I always had what I needed and more.

Yet once I turned 18, got a job, and was on my own I started using credit cards like they were “free money” and always had an excuse of why I was always overspending.  And I mean it when I say had excuses and “good reasons.”  I was the queen of explaining away why I had spent money I didn’t have.

My husband worked hard and did his best to provide for us (and still does).   And to be an outsider looking at our family today you wouldn’t probably think we ever had money problems.  My husband and I managed to raise our kids with all of them having everything they needed and more (yes, they were spoiled with material things which was completely my fault and not my husband’s).  We built a new house along the way (over 3,000 square feet which was much more than we needed but I was always about bigger and better so my husband did his best to give it to me.)  I went back to school, got my bachelor’s degree once my kids got into high school and then found a job that I enjoyed.

Then, 4 years ago, even though  I still didn’t have my spending under control we were still financially stable enough that I could quit my job to be at home and take care of my Mom who had gotten seriously ill (I’m the only living child and was traveling extensively for my job so I felt the need to be closer to home – and it’s something I have not regretted for one second).

Then, within the span of 2 years,  one of our children defaulted on student loans we had co-signed on to the tune of $20,000 thousand dollar, my husband’s work vehicle had to be replaced, a home business we had started and invested quite a bit of money into didn’t work out, our college daughter’s vehicle quit running and since she didn’t have any money we bought her another one, another one of our children experienced financial difficulties so we loaned/gave him several thousand dollars, and I still hadn’t stopped spending money like it was growing on a tree in our backyard.

On top of that we had a big mortgage payment for that big house I had to have.

Suddenly, instead of being able to pay all our bills each month (well, at least the minimum payments) we now had a whole lot of month left at the end of our money.

So we consolidated and took out a home equity loan.  It took a $75,000 loan to pay off our son’s student loans, pay for the 2 vehicles we had to buy, pay off the debts of our failed home business and pay off our credit cards.

You would think that at this point I would have gotten scared and would have stopped spending but I didn’t.  It took another $3,000 before my husband came to me and said we either had to make changes or declare bankruptcy and if we didn’t make changes right away we would no longer have a choice because bankruptcy would be our only option.

He gave me a book to read – one a co-worker had given him when he confided to her how worried he was about finances.  The book got me to open my eyes and realize what I had been doing.   (I’m not going to recommend you read it.  I’m going to tell you to read it.  It’s The Total Money Makeover by Dave Ramsey).

I finally agreed to sit down with my husband and face the amount of debt we had -close to $300,000 (including our mortgage) and to start making changes.

Today we still owe $160,000 on our mortgage and $26,300 on our home equity loan.  We have $0 credit card debt and $0 car loan debt.  In 2 1/2 years we’ve paid off $100,000 in debt.  By the end of 2009 we plan to have our home equity loan completely paid off and our mortgage under $150,000 despite my husband just receiving word yesterday at work that his compensation will be changing which will mean less income.

I’ve done some really stupid things – lots of them – and I have nobody to blame but myself.  But, I’ve also changed and have started doing a lot of things right.  And while I used to be a walking poster child for how to not manage money today it’s just the opposite.  Family and friends now ask for financial advice and tips because they know how much things have changed at our house.

Why have I told you all this?  Well, whether or not you wanted to hear my story, I wanted you to know that I’m not just some faceless person banging away on my computer telling you how to get out of debt without any real knowledge of how to do it.  No, I don’t have a degree in “finance” unless going to the “school of having to learn about managing money the hard way” counts.

I’m not a “financial expert” who has never experienced financial difficulties but yet pretends to know exactly how to do it (there are plenty of people out there like that).    I’ve been to the brink of financial disaster and am recovering from it.  There’s the saying of “what doesn’t kill you makes you stronger” and that definitely is how I feel about my debt.  I’ve faced it (one of the hardest things I’ve ever done) and have changed it.