Katie, a GreenPath client from mid-Michigan, talks about how she didn't know where to turn with her debt. She discusses how she reached out to GreenPath Financial Wellness, as well as her plans for the future.
In 2008, Katie's credit card debt started to snowball. Despite that, she continued to receive offers of zero percent interest rates and opened new accounts to shuffle the debt around, hoping that she could get ahead of her debt.
That same year, Katie found herself a single mom and had hope that she would be able to continue her lifestyle. She had received annual pay increases at work, but a year later the pay increases stopped.
Katie knew she was in over her head when she opened a credit card bill indicating that it would take 25 years to pay off the balance if she made the minimum monthly payment. “I even had a few statements that said I would never pay them off,” she said.
“I wanted to be thinking about planning for retirement, not about paying off my debt."
Shortly after that, Katie read a story about a couple that got out of debt with help from GreenPath. Previously, she took advice from a personal finance website and tried to settle with the credit card companies on her own, but she got nowhere.
After reading about GreenPath, she made an appointment for a face-to-face counseling session in GreenPath’s Saginaw, Michigan office. She brought her mortgage statement, pay stubs and credit card bills. Initially, she felt ashamed about being so deep in debt. She learned she was close to bankruptcy, but the GreenPath counselor said that they could work together to get her back on track.
“When Katie and I sat down, we discussed her situation, and where she was struggling financially,” said Tamekia Bell, Katie’s GreenPath counselor. “We put together a budget and she decided to use our GreenPath debt management program.”
GreenPath’s plan required Katie to adjust her spending and find ways to bring in more income. She picked up part-time work, but suffered a short-term setback when she had to use her emergency savings to pay for a new hot water heater. She stopped shopping online, borrowed books from the library and made do with her work clothes.
Her two biggest adjustments were paying cash for gasoline and not using her store credit cards. In the past, she would max out her gas cards and spend $200-$300 on new work clothes without thinking twice.
Today, she is more than one-third of the way through her five-year plan, and feels much smarter when it comes to budgeting. Creditor calls have stopped and she is confident that she will be out of debt in a few short years.
“GreenPath has given me peace of mind,” said Katie. “They were able to open the door for me in getting out of debt in five years, versus 25 or 30 years."