Quickly Into Debt And Slowly Out Of It: Molly's Story

It seemed to Molly that her debt just materialized out of nowhere, but when she began taking Financial Coaching sessions, she learned that it had actually been created slowly like a rolling snow ball as it collects more and more snow. When she first turned to Credit Counselling Services, she was worried that they would judge her about the fact that her total debt exceeded her yearly income, but they did not. Instead, they showed her how she got into this financial trouble, and they helped her dig her way out of it.

Before Molly started attending Financial Coaching sessions, she had to admit that she did not realize what a drastic impact the interest rates had on her debt. She could have sat down and worked out the math if she had really tried, but to be honest, she just never realized how important it was. When she turned to Credit Counselling Services they should her some math formulas about interest that really made her head spin.

She started using credit cards after her daughter was born. Before her daughter was born, she had been working full time, but she enjoyed the maternity leave so much that when it was over, she decided to cut her hours in half. Unfortunately, her industry did not allow her to work part time so she was forced to find another job. Ironically, she had been working in the collections industry. Although she spent her days calling people about their delinquent debts, she did not realize the drastic impact debt could have on a person’s life.

When she finally found a part-time job, it was in the retail industry. She was working half the hours, but she was making less than a quarter of the money she was used to making. Her husband, of course, agreed that they could live on a little less money so that Molly could spend more time with the baby. They decided that he would pay for all the bills, and she would pay for the groceries out of her paycheck. However, she was always a little short each month, and she did not want to ask him for extra money.

She started charging one hundred dollars per month on one of her credit cards. She felt like it was okay since it was only groceries. When the bill came, she would pay twenty-five dollars per month. Thus, each month, she accumulated Seventy-five dollars in debt. By the end of the first year, she had accumulated a balance of over $900. After she missed one monthly payment, her interest rate sky rocketed to almost thirty percent. On a balance of $1,000, that interest rate equated to nearly $300 per year in interest charges. She was still making twenty five dollar payments every month which barely covered the interest.

By: Randshan Saldin

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A year later, Molly decided to call Credit Counselling Services. She talked to one of their Financial Coaching experts. They showed her how to get her debt under control, they worked with her creditors to lower her interest rates. It took her longer to get out of debt than it took her to get into it, but she would have never been able to manage it without their assistance.