Money Stories:? There were very few things Eleni couldn’t handle. Her mother’s untimely death, the loss of a business, her husband’s injuries, and a special needs son. But managing consumer debt anxiety almost took her down. Then cancer called and changed everything. Adapted from an interview with Eleni Ross.
My financial education was the school of hard knocks…
I don?t remember ever receiving any education in personal finance in high school. I majored in Anthropology in college and frankly, I never thought of taking economics classes because I felt that they were tedious and boring. Everything I?ve learned about personal finance was through the school of hard knocks, just by going through it and screwing up.
I first became aware of personal finances and having a bank account when I was a senior in high school. I had my first job at the dime store in the town where I lived. They paid you in checks, so I had to open a bank account to cash them. After a while, I started getting offers for credit cards in the mail. I think my first credit cards were a Macy’s and a Chevron card.?By the time I entered college, I had a Visa. But I didn?t use it very much. I might buy a pair of shoes, and then pay it off when the bill came.?
I was still in college when my mom passed away.
My mom was diagnosed with colon cancer when I was 16 years old. And although she had radiation, it came back and moved to her liver. So, by the time I was college age, mom was undergoing chemotherapy every week. I didn?t want go away to college because I wanted to be there with Mom to support her. So I lived at home and drove to UC Berkeley everyday in a car my mom owned. She paid the insurance and I paid my own gas. I never worried about money then.
Mom left me a small trust and a paid off house…
I was still in college when my mom passed away. I remember that she died in June, right after finals. When Mom died, she left me the house and a bit of money in a trust. There wasn?t a lot of money, but there was enough for me to finish college. And the house was paid for. My uncle was the executor and he would just dole out a bit of money if I needed it.? This is why I didn?t really worry about money then, either.
…but I had no education in personal finance.
After returning to college the next semester, I met my future husband. We fell in love and began living together. He was an auto-mechanic and wasn?t making very much money at that time. After a few months, we actually started to run out of money. ?That’s when I started using credit cards to fill in the gaps.
We started using our credit cards as a type of income.
We started using our credit cards as a type of income. We?d use them to get gas, we?d use them to get groceries, and eventually, by the time I graduated from college, we were carrying some pretty big credit card balances.
After we got married, we decided we needed to fix the house. The house was in significant disrepair. The roof was leaking and the bathrooms and kitchen needed to be redone. We figured we could take a loan out on the house, do some repairs and upgrades, and get a little extra to pay off our credit card balances at the same time.
Our house became an ATM
We live in a very affluent area. Everyone around us drove expensive cars and had expensive toys. To be honest, that lifestyle sort of rubbed off on us. I think it was when we decided to buy a really expensive car that things started to get out of control. The payments on that car were about $500 a month, and the insurance was ridiculously high. But we didn?t really see it for what it was because, by then, we had learned how to take a line of credit on the house. This was in 1999, and it was the beginning of a long spiral.
We wanted to fit in with our environment. We wanted to be like everyone else…We were young and naive, and we just couldn’t see over the horizon. We couldn’t see what was coming.
Looking back, I can see how we began to use the house as an ATM. We?d rack up the credit card debt, and then we?d refinance again. We?d get a line of credit, pay off our car loan. We’d buy a new car and do it again. This became a pattern. But the reality is, we just didn?t need a fancy Mercedes Benz or a brand new BMW every few years.
Keeping up with the Joneses was a trap.
I believe now that we felt really pushed to keep up with the Joneses and be like everyone around us. But we just didn?t get that we didn?t have the money for that. Property values were skyrocketing at the time and it was super easy to get refinancing. Like many people during this time, we would use home appreciation value to justify these purchases. We were young and naive, and we just couldn’t see over the horizon. We couldn’t see what was coming.
Having our son changed everything.
For a while, things were ok. The payments weren?t astronomical and we were both working decent full-time jobs. I was working for an auto body shop when I got pregnant with our son.
Our son was born slightly autistic, and I didn?t want my son to be raised by babysitters. I wanted to be there with him everyday. So I decided to quit my job and go freelance as an independent auto-appraiser so I could raise my son myself. The downside was that my pay was no longer consistent. That’s when things started to get out of control.
I started using credit cards as an income patch to cover our monthly expenses when my pay came up short. I’d refinance the house again to try and manage the credit card balances. But this time, I actually kept it a secret from my husband. I was afraid to talk about our financial problems because I wanted him to feel that everything was ok. I didn?t want my husband to worry and I wanted to be able to raise my son myself.
I was afraid to talk about our financial problems because I wanted him to feel that everything was ok.?
But the truth is, it just wasn?t sustainable and I knew this. My income was inconsistent and the credit card interest rates were climbing through the roof. I was ashamed that couldn’t make it work, but not telling my husband was the biggest mistake I made. Not talking about money made everything worse.?
We looked for ways settle our debt…
Eventually, our financial situation forced me to give in and get a full-time job at a high end auto body shop. While I was making an excellent salary, it was an incredibly stressful position, and I had already screwed us with the high interest debt. So not only were we still struggling financially, I had a lot of debt anxiety and was totally stressed out everyday.
I decided to hire one of those sketchy credit settlement companies because I just couldn?t refinance the house anymore.
I also decided to hire one of those sketchy credit card settlement companies to handle the credit card debt because I just couldn?t handle it anymore. The stress of the job, the debt anxiety, and the threatening phone calls from collectors – it was taking a toll on me. When the credit settlement company told me to stop making payments on my credit card bills and pay them instead, the phone calls finally stopped, but my credit score went into the toilet.
… and we started a business.
Meanwhile, my husband decided to start his own auto repair business. We knew things would be tight at first, but we had a good business plan. There were some months in the beginning where he didn?t bring in any money at all, and our mortgage began to fall behind. I became scared that the bank was going to foreclose on our house.
This was in 2008, right when the subprime mortgage crisis was exploding, and, of course, I had a crappy subprime mortgage. On top of that, we discovered that our business partner was not only ignoring the bills, but was also actually stealing money from the business! We had to hire an attorney and kick him out. This definitely set us back.?
Finally, my husband’s hard work paid off and the business started to pick up.
For the next two years we were hurting badly. I remember my son even had holes in his shoes. I hated my job, but I was stuck there because we had nothing else. I began to experience constant anxiety. Everything was slowly falling behind but we hung in there. Finally, my husband?s hard work paid off and the business started to pick up. Things were going really well. At last I felt that everything was going to be ok.
A car came out of nowhere.
In 2010, just when our luck was turning, my husband was struck by a car making an illegal U-turn. The car hit his motorcycle and broke his foot. He couldn?t put any weight on his foot. He had to put his leg on a chair and try to finish the cars he had in the shop. He also had to hire someone to help him. As a result, he couldn?t take in any more new business.
Just when we thought we were starting to pull out of financial hell, my husband?s injury brought us right back down. We decided we would have to close the business after all, and when the business lease came up for renewal, we let it go.
Just when we thought we were starting to pull out of financial hell, my husband?s injury brought us right back down again.
Eventually, my husband?s foot recovered and he got a job at a shop as an auto mechanic. But the injury to my husband?s foot had weakened his strength due to inactivity. And shortly thereafter, he blew two discs in his back at work. He was in incredible pain and had to go on disability again. We were back in the struggle to try and cover our mortgage.
Close to the brink: the threat of losing our home.
This is when I tried to do loan modifications with my mortgage company. First I was told that we made too much money. Then they?d say I didn?t make enough money. I thought that my husband?s disability might make a difference, but the bank always came up with a different excuse as to why they couldn?t approve us. I think I tried to modify the loan about 6 times during this period.
Our subprime mortgage had originally been with Wachovia, but it changed hands about 3 times within in a year or so, eventually ending up at Wells Fargo. It seemed that I just couldn?t get anywhere with it. It was crazy. I was always asking, ?Who am I paying now?? By this time it was 2011. And we were finally warned of foreclose.
By now it was 2011. And we were finally warned of foreclose.
Still, I kept looking for ways out. Our son?s school district had a great program for special needs kids. He even had an aid that attended all of his classes with him to keep him on task. I didn?t want to disrupt his life. I needed to keep my son in that school district. So, even though there was equity in the house that could have dug us out if we sold, I refused to give up trying to save it.
It was Christmas 2011 when I received the phone call that turned everything upside down. My routine annual physical and mammogram resulted in a phone call. I was told I needed to return for an ultrasound, then again for a biopsy. Two days after Christmas, the hospital called me at work, and all I heard was, ?Bla, bla, bla, you have cancer.?
I remember locking myself in the bathroom at work and completely falling apart. Everything stopped. In that moment, sobbing uncontrollably, I just didn?t care about money anymore. I couldn’t even think. I had to have my husband pick me up from work because I was too upset to drive home.?
Two days after Christmas, they called me at work, and all I heard was, ?Bla, bla, bla, you have cancer.?
How cancer saved my life.
Ironically, I still say that cancer saved my life. By the time I got that phone call, I had gained 70 pounds, was stressed out of mind, and my blood pressure was through the roof. If cancer didn’t stop me, something worse may have.?The constant pressure to chase the dollar, to move money around to cover this and that liability, the overwhelming debt anxiety, was slowly killing me. But when I got cancer, all of this just stopped. It was a wake up call. I just let the debt anxiety go.
Because my husband was also on disability for his back at the same time, he was able to stay home and support me through the cancer, which helped me tremendously. It turned out that although I had to have a mastectomy, I didn?t need radiation or chemo. I actually recovered from the cancer in 5 months, and I am still cancer free today.
When I got cancer, all of this just stopped. It was a wake up call. I just let the debt anxiety go.
Learning to let go.
After I had fully recovered, the thought of returning to that high-stress job overwhelmed with me anxiety. This time, I just wasn’t having it. I told my company I wasn?t ready to come back, and they insisted that I get a doctor to justify the extension.
When I talked to the doctor about my anxiety, the doctor told me to take antidepressants and get back to work. But I didn?t want to take antidepressants. So, I started seeing a psychologist instead. I told my psychologist, ?I just don?t want to do this anymore!? He responded, ?Then, don?t.? So, I went in and quit my job.
The doctor told me to take antidepressants and get back to work.?
Now, I knew this was a risk. But I had talked to my husband about it, and he was very supportive of my decision to quit that job. I had been living with debt anxiety and trying to save our house for years. But cancer made me realize, ?You know what? You only get one life!?
I hadn?t been spending enough time with my family and everything felt wrong. What’s more, I started noticing this in other people’s lives as well. I could see that there were a lot of people in our area who drove fancy cars and seemed to have tons of money – ?but who were absolutely miserable. Joneses or not, I knew I didn’t want any part of this anymore.
At this point, I was at constant risk of foreclosure, had no job, no income, no credit, a husband on disability, a special needs child…and only one boob! We finally surrendered and filed a Chapter 13 bankruptcy so we could at least save the house. We were able to make the Chapter 13 payments for awhile and were temporarily saved from foreclosure. But one month, we just didn?t have the money and we missed a payment. The Chapter 13 protection was dropped, and the foreclosure game began again.
I could see that there were a lot of people in our area who drove fancy cars and seemed to have tons of money – ?but who were absolutely miserable. Joneses or not, I knew I didn’t want any part of this anymore.
A silver lining through the struggle
A few months later, my husband?s back recovered and he was able to get back to work. At the same time, I also found a job with a much better work/life balance. I was making about 30% less in salary, but I had full benefits again and a company car, so it sort of made up for it.
While we were now finally both making a steady incomes again, I was still constantly filing for loan modifications to delay foreclosure. I think overall I must have made around 12 attempts over 3 years to modify the loan to save the house.?The truth is, the bank simply wouldn?t let us make payments. I told them I just wanted to reset the mortgage and start paying, but they just wouldn?t take our money. It was maddening. They wouldn?t let us put it on the back end. They demanded all the back payments in full. Something like $75,000. We just didn?t have it.
For the entire year of 2013, we lived like squatters in our own house. We never knew when the rug would be pulled out from underneath us, but it just never happened. There was nothing we could do, but wait and find out. And the waiting was brutal.?
They were going to auction the house in 90 days.
Then, in 2014, we came home one day, and there was the foreclosure notice posted right on our front door. Our biggest fear, realized. They were going to auction the house in 90 days. We had to make a move. We contacted a real estate agent we knew to help us sell the house before it was auctioned, because we didn?t know what else we could do.
How we finally saved our house
The real estate agent told me to try for one more loan modification to buy us more time to sell the house by pushing the foreclosure date. Of course, I wasn?t expecting anything, I was just going through the motions again. But when I got the phone call from the loan modification officer, he said,?Congratulations, you?ve been approved!? I was absolutely floored. Just when I’d finally accepted that I’d have to let go of the house, it was saved.
I got the phone call from the loan modification officer, he said,?Congratulations, you?ve been approved!?
What I?ve learned
Though we?ve managed to save the house, the payments are outrageous. But my son is almost out of high school. We will eventually downsize and move to a less expensive area. I’ve learned some valuable lessons throughout this journey.
I now realize that I’ve always looked at credit as available income. And it?s absolutely not.
The biggest lesson I?ve learned was to live without credit. If I can?t afford something today, I just don?t buy it. I now realize that somehow I?d always looked at credit as available income. And it?s absolutely not.
1. Things are not important.
I?ve also learned not to care what kind of car I drive, or whether I am able to buy the things that the people around me buy. Things are not important. Getting cancer and surviving wiped all of that nonsense away. All that is important is my health, my family, and that we are going to be ok no matter what because we are together.
2. People need to talk about money problems.
Everybody has money problems. Even people with money have money problems. But people don?t talk about it. You could even say that people with more money have even more money problems.?
3. Some decisions are in your control. Some are not.
People don?t want to talk about money because they?re ashamed. But they shouldn?t be because, well, shit happens. You make some bad decisions. Things come up. Situations change. And some things you just can?t control.?
You can?t control getting cancer. You can?t control having an autistic child. You can?t control a Prius making a U-turn around a blind corner when you?re coming around on your motorcycle.? But you can control whether or not you buy an expensive car just to try to fit in. And this is the stuff we need to talk about.
4. Take control of your money before a crisis hits.
Unfortunately, for many of us, we are somewhat blind to our financial mistakes until a crisis hits.?
Unfortunately, for many of us, we are somewhat blind to our financial mistakes until a crisis hits. We go along, trying to keep up with the world, living overextended lives and trying to manage our debt anxiety. We need to get over this money shame because, seriously, I believe it has the power to ruin your life.
5. Gratitude is powerful. Realize how lucky you are.
Today, I am not ashamed to share my story, because I hope that others can learn from it. I didn’t know anything about personal finance before I began this journey. Now I do. But everything that has happened to me has made me realize how lucky I am – to have my health, to have my family, to have my life. Those are the important things. And they have nothing to do with what kind of car I drive.
– Eleni Ross
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