I was a welfare mom with $6000 in credit card debt. Living at poverty level made credit card use almost a necessity some months, yet I knew deep down inside it was wrong. I didn't want to be in debt, so I did something about it. Here's my story.

I started working full time when I was 16 years old, and continued to work after my first son was born when I was 23. When my baby was about six months old I found out about an opportunity to work from home.

I was hired as a data entry operator, and the company required us to purchase the computer which we were going to be working on. Mine actually had a hard drive in it, while most of the personal computers in 1987 had two floppy disk drives. The company purchased the computers and took payments from our checks. My first computer cost $1800.00. Looking back on it, I'm amazed at how much it cost. The hard drive was 640MB if I remember correctly. The work at home job went well for a couple of years until things started slowing down. The company offered a layoff package. If we took it, we would be allowed to sign up for unemployment benefits. I decided to take their offer and see what would happen.

I had no idea how dramatically my life would change from that decision. I ended up leaving my husband after five years of marriage, moving out of our home into an apartment. I was on unemployment, but had a difficult time finding a job. I applied for welfare and food stamps and was accepted. I was informed that I was eligible to stay on welfare for an undetermined amount of time because my oldest son had Down Syndrome.

My budget then was a simple budget, and also very tight. I had an old vehicle. I had no debt at all at this point.

One day a lady from across the street asked me if I could babysit her young daughter and preschool aged son. I could use the extra income, and I said I would be glad to. I can't believe what I did next. I went to Montgomery Wards and opened a charge account and proceeded to charge a VCR and 5 disc changer stereo system. Looking back on it, I am really shocked that I did that. The worst thing is the babysitting job didn't work out for more than a month, and there I was with that credit card debt. I actually would go to Wards when the balance was down by thirty or forty dollars and charge it back up again.

Then I needed glasses and I used the credit account through my bank. I charged that up to $500 without too much trouble. My car started breaking down and I had to charge one thing after another to fix it.

When my debt got to $6000, I was really starting to panic. I'd heard about a non-profit group that could help me consolidate my debt, and I contacted them. This was more than a decade ago, when you could really trust that the place you were signing up with was legitimate. Nowadays you have to be really careful who to trust. They were really great. I wrote down my budget and showed them what I could afford to pay. I could only spare $160 a month for my credit card payments. They like to have people pay off their debt within four years, but I just couldn't come up with the extra money so they gave me an extra four months. They were able to get my interest fees knocked down in half on several of my cards.

I had to make two promises: 1) cut up my cards and 2) not apply for credit during the time I was paying off my debt. I kept both promises and made every single payment.

About one year into paying off my credit card debt, my car's timing belt broke and the engine on my car jumped time. I was unable to pay for the $1000 repair. My mom helped me purchase another car within a couple of months, but it ended up that the person sold me a car that had serious issues. Within another couple of months, that car was also too expensive to repair. We ended up living without a car for three years. Luckily we lived in the city, and could ride our bikes to the store, and take city transit or a taxi when we had more than 5 miles to go.

At the same time, I was paying down a loan from my stepgrandparents. They had loaned me $9,900.00 to buy the mobile home in which we were living. When I asked them for the loan, at first I told them I only wanted to borrow $6000, because I had $3900 open on one of my credit cards. But then I thought I should just see if they would give me the full amount, because I was going to pay a lot of interest on the credit cards. I wrote up a contract and told them I would pay 3% interest. They really didn't want the interest, but I insisted. I wrote up a promissory note and had it notarized.

It took me 68 months to pay off the debt to my stepgrandparents. By February 2002, I was officially debt free.

It wasn't too long after that that we moved out to the country and bought some land and a manufactured home. Except for my $53,000 mortgage, I would continue to stay out of debt until November 2006.

It was a lot easier to get out of debt back then. I was a single mom with two children, and I was in complete charge of any money that came in. I look back on those days, and we were really pretty poor. My mom used to bring us a food box once a week from the local food bank, just so we could stay afloat. It really was a difficult thing to go through, and I would never want to be that poor again.

I feel really proud of myself when I look back on what I did all those years ago. It took me 48 months to pay off my credit card debt, and 68 months to pay off a $9900 loan. I know we will succeed again.

This post was included at the Carnival of Money Stories, Edition 61 on May 27, 2008.  Thank you Piggy Bank Blues for the hard work of hosting and including my post!