Five years ago, Manhattan resident Franny Bostick and her husband, Jim, were drowning in debt. They had good-paying, stable jobs, but it had been too easy to pull out the plastic and buy bigger and better things they really didn't need.
Bostick found herself staying up late trying to figure out which bill to pay and which one could wait until the next paycheck. They had 13 credit cards, and each month they were making the minimum required payment.
"The debt accumulated over 15 years," she said. "I knew we were in trouble when I had to use credit cards to pay utilities and groceries. But I had it in my head I could fix it."
"I would pay a bill and think we were OK, and then the car broke down and then there were medical bills," she said. "I knew about credit counseling, but it took a year to get there."
Bostick, who has worked for 33 years as a manager in the Custodial and Dining Service Department at Kansas State University, said she heard about Housing and Credit Counseling Inc. from a co-worker. She did a search for HCCI on the Internet and was pleased to see it was a local nonprofit agency.
Bostick called HCCI, which provides counseling and education about budgeting, credit, debt repayment, renter-landlord issues and homeownership opportunities, and set up an appointment.
"It was embarrassing to walk in there with a big fat file of credit bills," she said.
After looking over the bills, an HCCI employee told Bostick that she and her husband, who was a supervisor in the maintenance department at K-State, could file for bankruptcy.
"But we felt we ran up the bills and we needed to pay it back," she said.
Bostick said she didn't actually know how much money she and her husband owed on their credit cards.
"I had them write down the amount, and they put it in a file that was sent home with me," she said. "It took two or three weeks before I could look at it. We owed more than $118,000."
The Bosticks and their HCCI counselor began the hard work of coming up with a debt management plan that would allow the couple to pay their debt off in five years. To reach that goal, the Bosticks would have to pay $2,500 each month to HCCI, which then would pay their overdue credit card bills.
Their household expense for mortgage, car payment, utilities, groceries and gasoline was another $2,500, making their total out-of-pocket payments about $5,000 a month, or $60,000 a year for the next five years.
"Even with two jobs, we were $400 in the hole (each month)," she said.
To close that income gap, Bostick began working as a part-time substitute custodian for Manhattan-Ogden Unified School District 383 and started an Avon business. The money she earned selling cosmetics was used for Christmas gifts and special occasions, such as eating out.
Page 2 of 3 - Her husband, who had been diagnosed with early stage Alzheimer's, retired and took a part-time job delivering auto parts. His Social Security check also went toward the debt management plan.
The Bosticks discontinued cable television service, switched to a pay-as-you-go telephone plan, stopped eating out and taking trips and quit buying things they didn't need.
"I learned the difference between a want and a need," she said.
Bostick said it was important to her to continue tithing at their church. After discussing their financial situation with their pastor, the couple gave what they could and progressively donated more as their bills were paid off.
Three years into their debt management plan, Bostick earned a promotion at K-State and was able to quit her part-time job with the school district.
During the five-year period, the Bosticks never missed a payment to HCCI. They even managed to save a little bit of money each month. In the final year of the debt management plan, their car broke down, but they had $1,000 in savings to cover the repairs.
"The last payment to HCCI was August 2011," she said.
All but one of the Bosticks' credit cards qualified to be paid off through the debt management plan. Once they were square with HCCI, the couple was able to pay off the final credit card balance within five months.
"We went six years without a credit card," she said, adding she recently obtained a cash-back credit card. "I feel sick to my stomach when I hand it to someone. I use it as a debit card, and if there is no money in the checking account, I don't use it."
The National Foundation for Credit Counseling recognized the Bosticks for their efforts to get out of debt by selecting them as its National Client of the Year for 2012 and honoring them at a ceremony in October in Charlotte, N.C.
Since then, Bostick has been interviewed about how they freed themselves of credit card debt by MSNBC, US News and World Report, The Motley Fool, Money Talks News, MSN Money, Avon magazine and area radio stations and newspapers.
"I want people to learn from our mistakes and to know that help and hope is available," she said.
Bob Mackey, president and CEO of HCCI, said the Bosticks are like many Americans who find themselves buried in debt.
"This happens more often than it should," Mackey said. "These were good people who worked hard and paid their bills on time, but they had never followed a budget and they used credit cards too freely rather than saving to buy the things they wanted."
Bostick said she plans to retire from her job at K-State on Dec. 12, but she will occasionally return to provide training for the Dining and Housing Division and continue selling Avon products. She and her husband are saving to take their two grandchildren to Disneyworld.
Page 3 of 3 - And what happened to those 13 credit cards carrying their debt?
"I cut them up and put them in a baggie, and they are where I see them every time I pay a bill," she said.