OFB Interviews: Beating Bankruptcy

Mom of Two Precious Girls

We’re so honored to share this interview today with Mom of Two Precious Girls. I’ve never met her, but she’s been a reader and commenter of OFB since the beginning, and yet I never knew her complete story! And boy is it an incredible one.

If you’re having a hard time with finances and you need some motivation to help you push through, this interview shows that determination and hard work will pay off. We’ll let Mom of Two Precious Girls take it from here.

Tell us your story.

On January 7, 2008, my husband and I welcomed our first baby girl into the world. It was honestly the most amazing time of our lives. We were fascinated and enthralled by this little creature. We thought life was PERFECT. We had just bought a home 4 months earlier. We had jobs we enjoyed where we were each bringing in approximately the same salary. We had an emergency fund, retirement plans, and we were starting to think about saving for our little girls’ college education, at Yale, of course. (We are natives to Connecticut!) Nothing could stop us from achieving everything we wanted.

Within 3 weeks that all came tumbling down.

The family business my husband worked for was bought out by a company in Rhode Island. They told my husband they had a place for him, but it was in Rhode Island. They offered to help with the commuting cost, so he got up at 4:30 every morning and drove 90 miles north to go to work from 7:30 a.m. to 5:30 p.m. each day. Then he would drive 90 miles back — getting home at nearly 8:00 p.m. every night. Once I went back to work, this began to weigh heavily on our little family.

We decided the best thing would be for us to rent out our home and move to RI and rent something there. When we moved, I had no job and was searching and going on interviews, so our daughter was still in daycare. Then I couldn’t find a job that fit the schedule we needed, and the things that were promised to my husband at his job were not coming through. We also could not find a renter for our home (even if we had we were going to be out over $300 every month).

Our emergency fund began to shrink really quickly. We ended up heading back to CT where I could go back to work at my former company, and he would continue to commute until he could find something closer to home. We were a little beaten down but hopeful. Within a month, we were taken by surprise when I found out I was pregnant again. Our children would be 16 months apart! We were excited but worried about adding another child to the crazy schedule my husband was keeping. Well, that was solved soon because they laid him off. We were stunned, but he had never had trouble finding a job before.

Remember, this is now late 2008. The entire economy was about to crash. I tried to call my mortgage company immediately to see if we could refinance to better rates and maybe lower our mortgage payments. Wait, WHAT?! Our house value had dropped $50,000???? We can’t refinance? You can’t lower our rates? We did all we could to work with the mortgage company. They were not interested in assisting, no matter what programs there were or what kind of paperwork we sent, or how many times we sent it!

My husband searched for work for the next two years, taking odd jobs and part-time jobs, which means unemployment really wasn’t an option. We had our girls in daycare part time so he could work a little and hunt, but it was useless. We couldn’t afford our home anymore. We packed everything we owned into a U-Haul trailer and moved 900 miles south. Our family of four had to move in with my mother. We were in our 30’s with two children, living with our parents. It was humiliating.

We had to file bankruptcy…we had no way of paying what we owed. More humiliation. My husband had to take a job making HALF of his prior income. More humiliation. I had to commute 3 hours every day in Atlanta traffic. Misery. It was hard and it took its toll. My husband felt like a failure, and I felt frightened all the time, but felt guilty telling him because I didn’t want to make him feel worse. We were bickering all the time or not speaking to each other at all.

We always love a good turnaround story, and yours is exceptional. What made it all possible?

We finally started to talk through our feelings. We finally started to get angry at our situation, instead of each other. We started really cutting back on our costs and taking advantage of living rent free. We got a shoebox and started putting every extra penny into it: selling things we didn’t need, counting the money together every weekend while binge watching Breaking Bad, dreaming of getting out of my mom’s house!

About 8 months later, that box had a LOT of cash in it. We found spending cash was painful and we LOVED counting it! My husband had moved up quickly in his company, and I had gotten a nice promotion and we just kept putting money in that box. We finally had enough to look for a rental. Our only fear: would someone take a chance on us? We were lucky to find landlords who were willing to take us on. We have lived in that rental since 2011 and have been very happy. We’re still putting away all we can. We have come a long way. Last week we put in an offer to purchase a house! I can’t believe we made it here! We have a long way to go on our financial journey through life. However, it feels like we are getting back to being normal. We are saving for retirement and college, socking away money in our HSA, and even making a few investments here and there.

How do you approach your finances as a couple?

My husband still has very little interest in the money stuff. In his home, the moment he began working his dad controlled all of his money. He would give him an allowance, write out the checks for his bills, and put the rest in savings. My husband never even saw his bank statements.

He turned everything over to me when we moved in together for the first time! However, I do involve him to the extent he will let me. I put together the initial numbers with what I know about upcoming bills, expenses, or events. Then I ask him about any travel or business expenses we may need to float and any other things he expects to need in the upcoming month. I take all that into consideration and create the first draft of the budget. I will have him look it over and we discuss any questions/feedback, and then we discuss any disagreements (which is hardly ever). Then we finalize things and I move forward with taking care of the logistics!

What were your biggest lessons learned through your experience?

I think we learned that sometimes there are things out of our control. Bad things happen to the best of us. We learned about preparing for the worst while hoping for the best. We also learned how to be a team to work through things together. Our marriage isn’t sunshine and rainbows but we survived one of the most life-altering situations because we did it together.

What budgeting tools (apps, spreadsheets, strategies, etc.) are you using?

We use kind of a crazy mix of tools and budgeting methods. I think the first breakthrough we had was reading The Total Money Makeover. It helped me to see myself in a different way and to understand money through my EMOTIONS about it. I started to examine what categories I found difficult to maintain a budget with and started using the cash envelope system for those categories. However, knowing myself, I asked for cash for my birthday one year and scoured Etsy for a really cute system I could use to make that process more enjoyable!

Then in 2013 after reading a lot of personal finance blogs, I found the brilliant idea of budgeting on last month’s income. THIS was the biggest key to getting things going in the right direction. Previously, we both received small base salaries and monthly bonuses that were unpredictable. When we decided to start budgeting on the prior month’s income I went back and averaged our net take-home for the prior 6 months and came up with a baseline for our monthly budget. Then we hoarded every bit of extra money and within 2 months we had enough (amazing what goals can do, too!).

We have been doing this for almost two years, and it has really changed things. We figure out what needs to be paid in the upcoming month with a spreadsheet that I created loosely based on the zero-sum budgeting method of giving every dollar a job, and pull out the cash for the categories we choose. Then we send all of our savings and sinking funds to our CapitalOne 360 accounts. On the1st of the month I just pay everything else. It provides so much freedom and time throughout the month, and bills are never forgotten. The best part of this method is that we are able to put our savings goals at the forefront. We are not just hoping there are a few pennies left to save.

Any final words?

Honestly, I wish I had found the personal finance community and authors like Dave Ramsey BEFORE we filed bankruptcy. I think I would have handled things differently. I would have been more forceful with our mortgage lender and fought tooth and nail to avoid bankruptcy. Getting over that “Scarlet B” hanging over me has been quite an emotional rollercoaster. I can’t go backwards, though. So I will just keep doing everything I can to learn as much as I can to keep our family moving in the right financial direction.


Talk about a determined woman! We are so inspired by these interviews, and we’re so happy to get to share them with all of you. If you have any high fives, fist bumps, or thoughts for Mom of Two Precious Girls, feel free to leave them in the comments below.

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  • Reply Alli December 4, 2015 at 8:04 am

    We are about to move in with my in laws, too. We realized we can no longer justify where we are now living and there are far more job opportunities for us where they live. We are praying (hard) that we break even on our house. But even if we do, we have a massive amount of debt looming over us and I’m terrified that if losing our jobs while on our own, bankruptcy will be our only option. The total money makeover was also our wake up call and we decided to suck it up and be embarrassed to live with parents for a while for the chance of financial stability long term. Thank you for sharing your story! It makes me feel better knowing there is hope that this move will get us back on our feet.

  • Reply Cate M. December 4, 2015 at 9:39 am

    I have been fighting my husband to get him to attend a local Financial Peace University class with me because we don’t talk about our money. Whenever I try he just shuts down because it’s such a depressing topic. I crave and need a budget; I need to know what my limits are. He handles the bills because he has OCD but when I ask him to save the statements or sit down and go over things with me he says he will but never does.
    His biggest argument is “Why spend $93 when we are trying to SAVE money?” What would you tell him after using the Dave Ramsey methods and are they worth the $93?

    Any tips for getting my husband to work with me?!

    • Reply MomofTwoPreciousGirls December 4, 2015 at 12:48 pm

      Cate, we didn’t attend FPU and he doesn’t really follow Dave. I read Total Money Makeover myself (I won a copy in a contest) and it made me evaluate ME. You can’t change your husband, per se, but you should be able to communicate about money. I don’t really think the class is necessary either! (Sorry Dave fans!) What I learned in reading was how to frame conversations so that it didn’t feel like an attack. In our case my husband felt very self conscious because of something he had no control over. He took my fear as a failure on his part. One night we just laid it all out. I told him I needed him to hear me from a new perspective and let him know that I was not angry or disappointed with HIM. It was our circumstances that I was angry about. I was angry at the outside world! Once he could stop internalizing it we told the world we were moving forward!

      Your conversation with your husband should be about how YOU are feeling, not about how he makes you feel. Framing it around you helps him realize you are on the same team. You should know what is happening with your finances (this is true regardless of who makes the money or who makes more money). Tell him you are afraid of not knowing. Ask him what he expects you to do if something happens to him? Tell him you would be lost and have no idea what to do. My guess is he thinks by keeping things to himself he is protecting you from the stress. Let him know you can appreciate that, but it leaves feeling left out and fearful. Good luck!

  • Reply Tara December 4, 2015 at 10:36 am

    It’s great to hear such a rock-bottom story that resulted in everyone sticking together! When we were house shopping recently, we saw a nice house that we found out was foreclosed because the couple had bought at the height of the recession, the wife quit working after having a baby, and things seemed to spiral out of control from there until they eventually divorced and lost the house (overly talkative neighbor told us the whole backstory when we were checking out the house). Money can destroy marriages and I think the best thing about your story is that you both survived, marriage and love intact.

    I agree that budgeting based on previous income is the way to go. Husband and I are doing that now and it really is the only way for us to ensure we stay within our means AND put money in our savings!

    Congrats on the turnaround. 🙂

    • Reply MomofTwoPreciousGirls December 4, 2015 at 12:56 pm


      It was stressful on us and I think much of that was all the bad was happening when we should have been SO happy with our two little girls coming into the world. Those times should have been wonderful, but there was always a shadow over everything. We both came from divorced families, so we know what that does to kids. When I look back now I realize they actually came at the perfect time. I don’t know if we would have pushed so hard together if those two weren’t counting on us.

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