What would you do if you had about $40,000 in debt and no job?
Now, imagine if, added to unemployment, you and your spouse both battled chronic health conditions.
It’s tough out there for many Americans — and Abigail Perry and her husband, Tim, know that better than most.
When they found themselves with tens of thousands of dollars in student loan, credit card, and dental debt, they weren’t sure what to do. Abigail was on disability, and Tim had lost his job and was collecting unemployment.
Even in those circumstances, though, Abigail didn’t give up. She and her husband managed to pay off their debt in three years. Here’s how they did it under challenging circumstances — and how you can, too.
A string of medical issues
At age 19, Abigail almost died from Guillain-Barre syndrome, a rare neurological disease. The aftermath left her struggling with depression and chronic fatigue. In 2006, after trying to deal with the problem for nearly a decade, Abigail finally began receiving Social Security Disability Insurance checks.
That was the year she met her husband. At the time, Tim had $20,000 in student loan debt and a host of medical bills — including dental debt amounting to $12,000.
However, the conditions the Perrys were affected by weren’t severe enough to qualify them for Total and Permanent Disability Student Loan Forgiveness. And even though they had less than the $39,400 in education debt that affects the average student, their other debt more than made up the difference.
Two years later, in 2008, the two were ready to get married. They considered how to best tackle their debt and prepare for their modest nuptials. The wedding was set for June. In May, Tim was laid off. Suddenly, Abigail and Tim had no work income. Between student loans, medical bills, and credit cards, they had close to $40,000 in debt.
How would they pay all that off, especially when both were battling medical issues and neither of them could get work?
Ignoring ‘standard’ financial advice
In a perfect world, Abigail pointed out, you hear all about how to start a small emergency fund and the importance of stopping all credit card use as you demolish debt.
“There are monthly budgets and clever tactics,” Abigail said. “But none of them worked for us. How do you manage a traditional budget with two sick people who have unexpected costs?”
Rather than following the popular creeds, Abigail instead accepted that her situation was imperfect and that they would never be successful by trying to force themselves to follow what everyone else said they should do.
“We didn’t quit using credit cards and we didn’t set up an emergency fund,” Abigail said. “We knew we’d just deplete any emergency fund immediately with the next specialist visit so it was pointless.”
But that didn’t stop them from looking for a way to make it work.
Weekly budgeting on a fixed income
Rather than trying to budget for a whole month at a time, the Perrys focused on budgeting for each week.
“Even though we didn’t have much money coming in, we did know how much we’d have in any given month,” Abigail said.
She started a small side gig, but her disability didn’t allow her to grow it as fast as she wished. Between Abigail’s side hustle, the disability checks, and Tim’s unemployment checks, their income was right around $3,100 each month.
However, Tim’s high-risk insurance cost them $500 per month and their rent was $700. Right off the bat, those two fixed expenses reduced their discretionary income to $1,900 per month.
“Each week, I allocated a lump sum for what we had to live on, including groceries and other bills,” Abigail said. “Everything else went to debt repayment.”
Abigail kept the money in the bank and used a debit card for most expenses. They paid down debt as they could. However, larger obligations — such as doctor copays that sometimes amounted to more than $200 a month — went on the credit cards.
“It sounds weird, but we were making headway on our debt, even with using the cards for some costs,” Abigail said. “Because everything that didn’t go toward living went toward debt repayment, we were able to get ahead of the situation.”
Getting help and fighting over Slurpees
Even with the strict weekly budget, though, the Perrys relied on help from others. “My mom would drop off things she knew we couldn’t buy for ourselves,” Abigail said.
Additionally, her mother allowed them the use of her car. “That was huge,” Abigail continued. “We couldn’t afford to buy and maintain a car at the time, so getting around with my mom’s car mattered a lot.”
Sometimes, the Perrys lived so close to the bone that they fought over tiny expenses. One sore point was the Slurpee Tim bought after each visit to the doctor.
“We had epic fights about small sums,” Abigail said. “That $1.70 adds up and makes a huge impact when you have so little. You feel like you need to save every penny.”
These fights strained the relationship, but ultimately the couple stayed on track. They saw that their sacrifices and their payments were reducing their balances and it kept them motivated.
In the end, by putting a little more than $1,000 a month toward their debt, they were able to pay it all off in slightly more than three years.
A better quality of life
Today, the Perrys have a much better quality of life. After paying off their debt, Abigail found a job that allows her to work from home. Her boss is understanding of her condition and is flexible. Tim’s unemployment ran out years ago, but his medical issues still prevent him from work, so he’s on disability.
“We’re not wealthy by any means, but things are so much better now,” Abigail said. “We have a higher income and we have no debt except our mortgage.”
“We ultimately had to turn to the emergency savings account we’d been building up, but it was worth it,” Abigail said. “We’re going to drive that car as long as possible.”
Not only are the Perrys on much firmer financial footing today, but they’re also in a position to help others in small ways. Tim’s parents recently lost their home and have moved into the guesthouse on the Perrys’ property.
“It was really hard for a while,” Abigail said. “But things are vastly better now. My earning is significantly higher, we’re comfortable, and we’re able to help others. That’s success right there.”
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