As American baby boomers retire at the rate of 10,000 per day, millions more are waiting in line for their turn. The NFCC 2015 PACE Clients of the Year, Richard and Susan Ramirez, were among those approaching their goal. In order to reach the start of their golden years, they had to eliminate the growing $80,000 mountain of credit card debt that stood in the way. Time was of the essence and the task was difficult, but their determination led to a very happy debt-free ending. Mr. and Mrs. Ramirez were honored for their accomplishment during the NFCC Annual Leaders conference in Indianapolis, IN.
Their first step toward getting out of debt was to contact Consumer Credit Counseling Service of Orange County, where they enrolled in a debt management program, a product designed to help them pay off their credit card debt. “From the day I first met this couple, they understood their situation and committed themselves to meet the task at hand,” said Tim Enos, their NFCC® certified credit counselor. “They set a goal to get out of debt so they could retire, and they remained focused despite many setbacks.”
In the first week of speaking with Tim, Richard’s mother passed away and they were expected to help with funeral expenses. In July 2009, Susan was faced with what so many state workers had feared the most. She was placed on furlough for a year with a 20% reduction of salary. Six months later, Richard faced a 20% reduction of his salary. And then only two weeks after both salaries returned to full pay, Richard lost his job.
Difficult times require some painful decisions, and the Ramirez’s were not afraid to do what was necessary. “Our original plan was to work together until we turned 66,” said Susan Ramirez. “Then we could both start Social Security at that time, but you do what you need to do!”
Richard relied on unemployment benefits for two years, then applied for Social Security at the age of 62 instead of 66. With additional assistance from Consumer Credit Counseling Service of Orange County, they worked to reduce their mortgage payment, saving a few hundred dollars each month.
In the spring of 2011, Susan was diagnosed with breast cancer. Richard stood by her as she faced the challenge of surviving cancer. Through it all, they never gave up on their pledge to repay every dollar of the debt they owed. In the face of so many challenges, and although their mortgage payment had been reduced, it became increasingly difficult for Susan and Richard to afford the cost of home maintenance. Roof leaks, broken appliances, and a hot water heater needing replacement were the tipping point that led them to a decision they had never dreamed they would have to make. In December 2011, they sold their 3 bedroom 2-bath home and downsized to a 2-bedroom 1-bath rental, saving $1,000 per month. They also sold one of their two cars, relying on bikes and public transportation when necessary.
“Our counselor taught us that there are choices to make. That we need to plan for the rainy day and only spend what we can afford”, explained Susan. Their secret to success involved a change in lifestyle, replacing credit with cash while scaling back in almost every budget category. Richard and Susan were creative with low-cost vacations, money-saving efficient appliances, and their commitment to maintain a savings account for unexpected and variable expenses.
The best news is that they are now free of their debt and are moving into an affordable home closer to their son and his family. Susan and Richard can now have full confidence that their retirement funds will support their lifestyle, allowing them to enjoy their family without being a financial burden.
“We are so pleased that the Ramirez family were able to become debt free even while they incurred several obstacles,” said Cheryl Borden, president and CEO of Consumer Credit Counseling Service of Orange County. “Sue and Richard are an inspiration to everyone out there who are hesitant to face their financial woes head on. The first step is the biggest hurtle.”
Susan and Richard say the experience has taught them how to be debt free and still have a full life. Susan says that their new motto is “if we don’t have cash, we don’t get it now.” Even at times when she has the money, she always asks if it is something necessary. “Consumer Credit Counseling Service of Orange County has been a great support to us that we will not soon forget,” says Susan.
Bruce McClary is Vice President of Public Relations & External Affairs with the National Foundation for Credit Counseling.
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.